Regulators failing in duty to help debt-stricken customers with utilities, MPs warn

An inquiry also found regulators did not have a “comprehensive view” of how much customers owe despite early identification of problems and intervention being considered key to limiting the impact of arrears.

With energy and water bills set to rise further, the prevalence of debt is set grow, the Public Accounts Committee (PAC) said, with payments owed to providers in the water and energy sectors alone hitting £7.2 billion in March 2025.

Ofgem, Ofwat and Ofcom, which regulate energy, water and internet services respectively, should focus more on encouraging companies to boost the take-up of discounted social tariffs and other support for consumers on lower incomes, the PAC said.

Currently just 6% of water customers in England and Wales, and less than 9% of eligible broadband customers, are on social tariffs when many millions more may be eligible.

Only 13% of energy and water customers have accessed support for people with additional needs in relation to communication, safety and access, despite up to half of all households estimated to be eligible.

The inquiry also found current company processes rely too heavily on vulnerable customers being “willing and able” to repeat personal information about their financial circumstances to providers, which they are “fearful” about doing.

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Customers who are required to navigate an “inaccessible landscape of confusing terminology” to establish their eligibility can increasingly become stuck in a cycle of trying to ask for help as companies turn to the use of AI chatbots, the inquiry found.

The PAC has called on regulators to demonstrate how they will make support more accessible, with a focus on a “tell us once” approach so customers avoid having to provide information about their personal circumstances to multiple suppliers.

PAC chairman Sir Geoffrey Clifton-Brown said: “Bills are increasing. Energy debt is correspondingly rising. We are in the midst of a continuing cost-of-living crisis, with little sign that the lookout globally will become any more forgiving for the vulnerable any time soon.

“Some of the economic and geopolitical drivers of this are unavoidable. There is nothing unavoidable about energy, water and broadband consumers being allowed to drift into debt through poor communication and co-ordination from and between suppliers, regulators and the Government.

“In such circumstances, with this report our committee is asking Ofgem, Ofwat and Ofcom if they are going to sit back and watch as consumers navigate a confusing and inaccessible landscape – or will they and Government work together to provide a united front for the public that could actually make a difference to rising hardship?

“How forceful are they willing to be in the use of their powers to make sure companies do everything possible to make sure people who need and are eligible for help, receive it? With their response to this report, we shall find out.”

Martin Lewis, the founder of MoneySavingExpert, who gave evidence to the inquiry, said many people are being let down in regulated industries that are supposed to protect them.

He added: “Firms seem to rely on tick-box exercises to help lower prices and ease burdens on the vulnerable – so they can say they’ve done them – but in a way that’s complex, confusing, under-communicated and leaves the burden on the struggling individual to help themselves.

“All in all, it means most people don’t get the help that’s available.

Mr Lewis described the committee’s recommendations as “a great start to in improving things”.

He added: “Of course, there’s more that could be done, including stopping mid-contract mobile and broadband price hikes and having a single water social tariff so it’s not a postcode lottery – but overall, this is a good outcome.”

An Ofgem spokesperson said: “A stronger grid will connect more home-grown renewable power, reduce costly constraints on the system and help shield consumers from volatile international gas prices.

“That’s why we’ve introduced reforms to speed up critical infrastructure projects, unblock connection queues and strengthen incentives on network companies to deliver efficiently and on time.

“Protecting consumers and driving down costs remains our priority. Funding is released in stages, costs are rigorously scrutinised and companies face financial penalties if they fail to deliver.

“We welcome the NAO’s recommendations and will continue working closely with Government, NESO and industry to improve transparency, strengthen oversight and ensure this investment delivers value for money.”

An Ofcom spokesperson said: “We will carefully consider the committee report, and will continue to work with Parliament, Government and other regulators on what more can be done to make sure vulnerable customers get the support they need from companies.

“While we haven’t been given powers to require telecoms providers to offer social tariffs, we’ve been pressing them hard to do so, which has led to dozens of companies providing them.

“We also can’t require telecoms firms to share customer data with other sectors, but we can see how a ‘Tell Us Once’ register could make things easier for customers.

“We’ve been using the powers we do have to hold companies to account. For example – in the last year, we’ve fined Virgin Media more than £50 million for making it difficult for customers to leave their contracts and not treating vulnerable customers fairly.”

An Ofwat spokesperson said: “We have been driving significant change on consumer protections in the water sector, particularly for those experiencing vulnerability.

“While we know there is more progress to be made, Ofwat has taken a proactive approach which has seen the number of households registering for the priority services register nearly triple over the last five years and a doubling of customers taking up companies support for social tariffs and help paying their bills.

“In 2024 we also introduced our customer-focused licence condition and vulnerability guidance, for which we are holding companies to account. In July, we used these new powers for the first time to secure a £30.5 million redress package from South East Water following the conclusion of three investigations which included a failure to adequately support their customers.

“Protecting consumers who need extra help remains a key priority for Ofwat, and we will continue to work with Defra and the Consumer Council for Water to improve outcomes for customers in this period of reform of the water sector.”