Smarter Regulation: Strengthening the economic regulation of energy, water and telecoms sectors.

Thank you for the opportunity to comment on your consultation proposals to strengthen the economic regulation of energy, water and telecoms. We have comments in relation to the sections on competition, supporting consumers as well as duties and functions.

Trust Alliance Group was formed in 2022 and comprises several businesses that were previously part of Ombudsman Services, including the Energy Ombudsman and Communications Ombudsman, approved by Ofgem and Ofcom respectively. Within Trust Alliance Group we also have Flexible Resolution Services (which operates a private parking appeals service), Lumin (a software development company) and The Internet Commission.

Competition

Proposal 5: For Ofcom to review whether existing monitoring is sufficiently capturing competition issues in the sector.

Proposal 6: In energy and water, regulators should consider introducing greater use of comparative metrics to promote greater competition on performance between companies.

We think that competition should be reviewed regularly to understand whether it is delivering better outcomes for consumers. There may be a range of metrics that can be used to provide a fuller picture of how the market is working for consumers, which should include information from a range of industry stakeholders and data and insights from Alternative Dispute Resolution (ADR) on consumer and microbusiness disputes.

Supporting consumers

Proposal 7: The government will coordinate and work collaboratively with regulators, industry and devolved administrations to explore the creation of a single, multi-sector Priority Services Register.

Proposal 8: For the UK Regulators Network (UKRN) to convene work with regulators, industry and the government to ensure greater consistency in how affordability support and bill changes are communicated, within and across sectors, looking at both household and business customers.

Q23: What are your views on the creation of a single, multi-sector Priority Services Register?

We support the creation of a single, multi-sector Priority Services Register (PSR). It makes sense for consumers to be able to tell a utility provider once, or any other organisation only once and have that information shared across essential services. It would make sense for a PSR to go beyond the utility sector such as the emergency services.

Q24: What are the best data sources of vulnerability that the PSR should use? Who should be able to input data?

Any organisations who may be part of a consumer journey should be able to input data. This will include advocacy bodies such as Citizens Advice, energy suppliers, heat networks, or communication providers and Ombudsman or dispute resolution schemes. Ombudsman and disputes resolution schemes are also in a position to understand and identify whether vulnerability has been recorded and factored into supplier interactions.

Q25: What vulnerabilities and services should the PSR cater for?

We know that vulnerability can take many forms and be transient or permanent. The PSR should allow for a range of vulnerabilities to be included and importantly it should record what support the consumer actually needs as a result. Even consumers with the same vulnerability may need different levels of support or adjustments.

Q26: How can existing affordability support be better communicated to increase consumer awareness?

We think it is right to work across regulators, the industry and government to ensure greater consistency around how affordability support is communicated. Communication around affordability support needs to take into account which channels work best for different consumer needs and where consumers are likely to go for information. As a Group, we have a strategic objective of maximising reach to enable more consumers to access our services. So far, the research we have undertaken suggests lower usage by non-British white and ethnic groups, younger age groups and those in lower socio-economic groups. The result is that we will be investigating a range of different channels and approaches to increase awareness. In addition, most disputes for the Energy Ombudsman are around billing - we believe this highlights how important it is for consumers to understand their bills and therefore the measures we need to employ to explain their bills to them when there is a dispute and explain where affordability support is available.

Duties and functions

Proposal 10: The government led by sponsor departments, will work with regulators to conduct a thorough review of duties, with a view to rationalise duties and enable regulators to focus more on economic duties and functions.

Q30: The government’s provisional view is that regulators’ economic core duties are: fostering economic growth; ensuring effective competition, delivering net zero and protecting the environment and protecting consumers. Are these the correct set of core economic duties regulators should be focused on?

We think it’s right to review regulator duties and functions and to look at whether the regulatory landscape works as whole; that it is fit for today and the future. We agree with the core economic duties - ensuring effective competition that drives value for consumers, that it works for industry stakeholders as well as delivering on net zero ambitions and ensuring that consumers are protected.

We think a regulatory framework works well when it is committed to achieving specific outcomes, and is clear on how those are defined and will be measured. Alongside clear plans and metrics, we also think regulators have an opportunity to engage and work closely with stakeholders to understand the impact of particular regulatory interventions and use data, insight and information, such as complaints data across each sector to help them better understand which mechanisms and levers to pull to foster economic growth while delivering value and protecting consumers.