The National Audit Office (NAO) has revealed that millions of households are missing out on financial support for essential services such as water, energy, and broadband, as household debt to utility firms climbs to over £7 billion.
Low Awareness of Social Tariffs
According to the NAO report, only one-third of eligible broadband customers and 39% of water customers who are struggling to pay their bills are aware of social tariffs. These tariffs are designed to assist vulnerable individuals or those on low incomes, helping them manage their debt more effectively.
Regulatory Gaps Identified
The report examined how Ofcom, Ofwat, and Ofgem support consumers in vulnerable circumstances and whether people can access the help they need. It concluded that regulators are not aligning their performance measurements with actual consumer experiences and outcomes. While Ofgem and Ofwat have seen an increase in registrations for priority services registers (PSR), consumer awareness remains low. Ofcom does not routinely monitor the uptake or awareness of support for broadband customers.
Sharp Increase in Energy Debt
The watchdog noted a marked increase in household energy debt following Russia's invasion of Ukraine, with debt levels rising by 118% since 2021. However, energy customers on supportive repayment plans owed around £1,000 less than those without such plans, according to the NAO findings.
Progress and Recommendations
The NAO acknowledged that regulators have strengthened protections since its last report in 2019, introducing new rules on how companies treat customers and taking enforcement action. However, it stressed that regulators must now adapt to keep pace with consumer needs. Customers still struggle to contact their providers and are not always aware of available support, such as social tariffs and repayment plans.
The NAO recommends that regulators increase awareness of available help, tackle drivers of rising debt like inaccurate billing and delays when moving home, and remove barriers to switching tariffs. It also calls for improved identification and support for vulnerable consumers, as well as better data-sharing across sectors.
Expert Reactions
Gareth Davies, head of the NAO, stated: "Regulators have made progress to support consumers, but they're not keeping up with the pressure now facing millions of households. With debt rising sharply, it's more important than ever to make regulation work so that people know what support is available and can contact essential providers when they need to."
Sir Geoffrey Clifton-Brown, chairman of the Public Accounts Committee, commented: "Price volatility is now the norm across much of the energy sector, and consumers are at the sharp end of this. Debt to energy companies has more than doubled since 2021, yet far too many households are still not receiving or are even aware of support to manage rising costs. Regulators have a critical role to play, but today's NAO report shows regulation is still failing consumers across water, energy, and broadband."
Regulators Respond
An Ofwat spokeswoman said: "We know there is more progress that needs to be made to drive better outcomes for consumers, particularly those experiencing vulnerability and during supply incidents. Protecting consumers who need extra help remains a key priority for Ofwat, and we continue to work with Defra to improve outcomes for customers in this period of reform of the water sector."
Ofgem added: "Energy debt remains a major challenge, and we are taking action to reset how it is managed. We continue to work with Government on a targeted Debt Relief Scheme to address historical debt, alongside reforming the process people follow when they move house and set up energy accounts to avoid debt building up. We are also challenging suppliers to do more, including prioritising accurate billing and early engagement to offer fair, affordable repayment plans."
