While the longest day of the year was only last week, the thoughts of everyone I speak to in the energy and water industries are increasingly turning to the coming winter – and whether it will bring the wave of financial hardship so many people have been predicting for so long.
This was the topic of a recent roundtable I chaired, hosted by consumer vulnerability specialists Auriga Services. The 27 leaders from energy, water, charities and government who attended were broadly agreed that there is a serious problem looming, but it’s currently being masked. That may be due to the furlough scheme and the extension of universal credit, it could be because consumers are using high-interest credit cards to pay for routine household items – storing up problems for later – or because the kind of consumers who are experiencing income shock due to the pandemic are not used to handling problem debts, don’t know how hard it is to get out of it, and wouldn’t know who to disclose to even if they understand how important it is. In all likelihood, it’s all of the above and more.
Fortunately, most of the energy and water companies I’ve been speaking to are well aware of the problem and are putting in place programmes to help those most in need this winter.
In my role as chair of Energy UK’s Vulnerability Commitment, for example, I’ve had a great many conversations with suppliers about the important work they are doing to identify customers in financial hardship and at risk of either getting into problem debt or – if they are pre-payment meter customers – self-disconnecting. Collaboration with charities and other third parties is definitely increasing – this is one of the key purposes of the Vulnerability Commitment and I’ve been delighted to see the effect it has been having.
I worry, though, that collaboration will only get us so far. Free-at-point-of-use debt advice services have nowhere near the capacity that we need to meet present levels of problem debt, and we are not seeing the investment in new services we need to close the gaps that the Wyman Review highlighted two years ago. In this area, as in data sharing, government support is needed to close the gap between where we are now and where we need to get to if we are going to help customers at risk get through this winter safely.
Steve Crabb is the former director of consumer vulnerability at Centrica and now chair of Energy UK’s Vulnerability Commitment and chair of SES Water’s Customer Scrutiny Panel.