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Evening Standard
Evening Standard
Business
Jonathan Prynn

Government launches major review of Ofgem to boost its role as consumer champion

The review was announced today by Minister for Energy Consumers, Miatta Fahnbulleh -

The role and powers of the energy regulator Ofgem are to be reviewed for the first time in a bid to make the watchdog a stronger consumer champion.

The Government unveiled the review today in what it described as “first step to repair Great Britain’s retail energy market.”

The process started today with a call for evidence from from energy users, consumer groups and industry and “will conclude at the end of February.“

Ofgem was founded in 2000 through the merger of two predecessor bodies, gas regulator Ofgas and electricity regulator Offer. They were set up in the 1980s when the UK’s energy industries were privatised, initially principally as economic regulators to stop private monopolies charging households rip-off prices for essential services.

But the government said that Ofgem’s credibility was damaged by the energy crisis of 2022, which sent prices rocketing to unprecedented levels and triggered the mass collapse of smaller suppliers that followed.

According to ministers this “exposed that the regulator is no longer fully equipped to protect consumers in today’s market.”

Reforms that will come under consideration in the new review include more support for consumers and protection of households from poor service, and “improving access to automatic compensation when things go wrong.”

Bad practice that have eroded trust included the scandal over the forced installation of pre-payment meters by British Gas in 2023.

The Government said the review “will ensure Ofgem is equipped to address these unacceptable outcomes for consumers, including the ability to order companies that are guilty of wrongdoing to refund or compensate customers directly. “

The review “will also consider how Ofgem can better drive the government’s missions for clean power and economic growth...”

Minister for Energy Consumers, Miatta Fahnbulleh said: “We have listened to people’s concerns and learned from the energy crisis. We will ensure that working people have access to the best possible support to choose more affordable, smarter, clean energy that is right for them.

“Energy bills are still too high, and that is why we worked with suppliers to announce £500 million of additional winter support. The review of Ofgem will set it up for the transition to net zero and establish it as a champion for households and businesses by fixing the broken energy market and putting consumers first.”

Jonathan Brearley, CEO of Ofgem, said: “Ofgem welcomes this review. A great deal has changed since our remit was set 25 years ago, and will continue to change as we move to new ways of generating and using energy.

“The energy crisis served as an important reminder to all that protecting consumers must remain the focus no matter what challenges we face, so that every household receives the service and support they rightly expect.

“We have already made significant reforms to stabilise the market, drive investment in our infrastructure, and begin to improve standards, however we know more can be done with more powers. We’re committed to keeping consumers at the heart of everything we do, and working together with government, industry, and consumer groups and charities to shape a future energy and retail market that delivers for everyone.”

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