Citizens Advice response to Ofgem's open letter to updating the Consumer Vulnerability Strategy
Citizens Advice welcomes Ofgem’s plan to update their Consumer Vulnerability Strategy this year. We have been working closely with Ofgem as they develop this work, and have shared the insight in this letter 490 KB with them over previous months.
We have strongly supported Ofgem’s delivery of the existing strategy. This has embedded a definition of vulnerability that takes account of the dynamic changes in people’s lives and personal circumstances. It has led to a series of positive policy changes, such as reformed Priority Services Registers and changes that tackle the cost of prepayment meter installation.
But there is still much more to be done to ensure the market is as inclusive and accessible as possible, with appropriate protections for those who need more support. This strategy update will provide Ofgem with the opportunity to set out plans to address the continuing challenges people in vulnerable situations face on a day to day basis in the energy market.
It will also need to prepare for the new ways in which consumers may be vulnerable in the future market, and how to take full advantage of smart data and technology to help tackle vulnerability. We expect that energy network companies will play an increasing role in improving the support and service for consumers in vulnerable circumstances. Last year we published a collection of essays on how RIIO-2 could deliver this improved service.
We’ve identified five key challenges that Ofgem, government and the energy sector need to tackle in the coming years, in order to better support consumers in vulnerable situations (with more detail available on each of these below):
Bringing help closer to consumers who need it
Radically improving the prepay experience
Providing universal protection and a seamless customer journey
Creating an inclusive market
Preventing vulnerability in future markets
We were pleased to see many of the issues we are concerned about were also identified in the recent Commission for Customers in Vulnerable Circumstances report.
The National Audit Office recently recommended that regulator’s high level intended consumer outcomes are ‘underpinned by detailed indicators or targets’ that can be used to measure performance in protecting the interests of consumers. We agree, and argue that Ofgem should set ambitious targets as part of its new strategy. These should include ending the self-disconnection of households with prepayment meters, reducing the number of customers in arrears without an arrangement to repay, and reducing the level of debt repayments set by suppliers (particularly small and medium suppliers).
Some of the challenges we’ve identified cannot be tackled by Ofgem and energy market participants alone. We welcome Ofgem’s recognition that a key part of the strategy will be to work across boundaries with other regulators and the government, which has a key role to play in ensuring people can afford their energy supply.
As the statutory consumer advocate, Citizens Advice also has an important role to play. The energy market is rapidly changing, and it is essential that consumers are at the heart of these changes. Citizens Advice is committed to working with Ofgem and the government to remove obstacles for customers in vulnerable situations, and ensure extra protections exist to support people who need it most. Energy remains an essential for life service: increased choice and opportunities to engage with the energy market (supply, products, data and services) must be underpinned by a secure and affordable energy supply.
We look forward to continuing to engage with Ofgem as they develop what we hope will be a bold and ambitious vision for how to improve outcomes for consumers in vulnerable circumstances.