National Energy Action (NEA) published its response to Ofgem's consultation on a framework for consumer standards and policy options to address priority customer service issues on 31 May 20231. The charity said Ofgem is looking at ways to improve standards of customer service in the sector, including improvements that can be made ahead of winter1.
NEA said it was pleased that Ofgem was asking for views on how to pragmatically improve levels of customer service in the energy supply sector, and that it believed access to customer service could be enhanced and its quality upgraded1. The charity set out its position on the form regulation should take:
"We make the case for more prescription in this area of regulation instead of solely relying on competition to provide positive outcomes for consumers."
Consumer Scotland published its own response to the same consultation on 2 June 20232. It recommended a balance between a principles-based approach and a prescription-based one, with clear rules, guidance and regulation in cases which may result in harm to consumer health, safety and wellbeing3. It supported a requirement for suppliers to have third-party agency direct lines and welcomed the stipulation of free phonelines for vulnerable consumers3.
Consumer Scotland's evidence covered contact ease and support for consumers struggling with bills. Its spring 2023 tracker data found that 46 per cent of consumers thought their supplier made it easy to contact them, down from 51 per cent in spring 2022, while 24 per cent said their supplier did not3. Fifty-six per cent thought the language used in their bills was easy to understand, with 20 per cent disagreeing, and only 42 per cent thought their supplier treated them fairly3. Consumer Scotland said its data suggested prepayment consumers are more likely to report poor consumer standards than those on direct debit3. It also said some energy customers in Scotland were being given the wrong advice on Warm Home Discount, now a separate scheme in Scotland requiring application for the Broader Group3.
On costs, Consumer Scotland said it was important to be clear that customer service standards are already factored into the price cap calculation, and that the costs of failing to meet them are effectively externalised by suppliers to the public and voluntary sectors3. It agreed with Ofgem's early view on reputational-based incentives for winter 2023 and incentive options for development over the longer term3.
Why it matters for households
Customer service standards determine how easily a household can reach its supplier about a bill, a meter reading or a payment problem, and how quickly a query is resolved. For a home managing tight finances, a phone line that is hard to reach can delay a payment arrangement or leave a debt problem unresolved. Consumer Scotland's evidence points to a link between poor service and consumers being unable to reach suppliers when they are struggling to afford their bills, which it said can lead to increasing debt, financial vulnerability and negative impacts on consumer wellbeing3. It also said poor service undermines trust in the energy sector and creates barriers to changes needed on the part of consumers to help the sector decarbonise3.
The consultation sits within the wider framework of Ofgem's role as the energy regulator and the process by which energy consultations shape policy. For households in Scotland, the response reflects devolved arrangements, including the separate Warm Home Discount scheme, which is covered in energy and buildings policy in Scotland. Where a complaint cannot be resolved with a supplier, the routes available are set out in energy complaints and redress.
What happens next
Ofgem's consultation on the framework closed before these responses were published; the dates of the consultation period and of any Ofgem decision following it have not been reported in the material available. NEA's response refers to improvements that can be made ahead of winter, and Consumer Scotland refers to reputational-based incentives for winter 2023 and incentive options for development over the longer term1. No timetable for implementing any new standards has been reported.
Sources3 cited
- NEA response to Ofgem’s consultation on a framework for consumer standards and policy options to address priority customer service issues - National Energy Action (NEA), nea.org.uk
- Ofgem's Consumer Standards Framework | Consumer Scotland, consumer.scot
- Ofgem's Consumer Standards Framework (HTML) | Consumer Scotland, consumer.scot