Rising retail and wholesale energy prices combined with cuts to Universal Credit and rising inflation mean that for some vulnerable consumers it’s going to be a cold winter.

Boris Johnson may be confident that surging gas prices will not lead to a winter of hardship this year, but at Utility Week’s Consumer Vulnerability and Debt conference earlier this month they were eyed as the latest in a potent combination of factors brewing up a “perfect storm” of consumer affordability challenges in the months ahead, as one speaker put it.

The withdrawal of government support schemes which have sheltered many households from the worst financial impacts of the pandemic is imminent. This, mixed with a rise in the energy price cap and now unprecedented spikes in wholesale energy costs – alongside upticks in other basic domestic costs such as food – all suggest utilities will see deepening problems around financial vulnerability across their customer bases this winter, our expert speakers agreed.

Furthermore, it’s going to be hard to predict who is most at risk of sudden financial hardship. Across the UK today we know that there are masses of individuals and households whose good credit and payment histories mask a hand-to-mouth existence with no buffer in savings. As Anita Dougall, chief executive of event sponsor Sagacity Solutions pointed out, more than 50 per cent of UK adults currently have insufficient savings to allow them to handle a surprise bill of more than £300 pounds.

And as financial troubles settle in, utilities are also bracing themselves to deal with mounting issues in other forms of customer vulnerability, including mental health challenges and physical health impacts as more consumers face choices between heating and eating or stringently ration their consumption of essential services.

Utility Week’s two-day conference explored the manifold ways in which utilities are squaring up to this daunting environment and trying to equip themselves to help customers while also protecting cash flows and balance sheets as much as possible. The first day of the event covered policy and regulatory issues, which speakers felt must be addressed if companies are to be in a robust and confident position to do the right thing for struggling customers. Then too, there was some lively debate around what good should look like in vulnerable customer strategies this winter, with some pointed comments made by the Institute of Customer Service’s Jo Causon about a lingering tendency for utilities to use the pressures of the pandemic as an excuse for repeated failures to provide appropriate customer support.

This said, the legacy of Covid for customer service strategy is still unfolding. Multiple speakers pointed out how a poor level of understanding about the seriousness and extent of challenges posed by long Covid mean that it’s hard to shape any meaningful plan for how to address the issues this may raise both for customers and employees who may be personally impacted or who will have to face chronic pressure in the workplace as they deal with higher volumes of emotive and complex customer interactions.

As the event progressed, the focus of speakers moved from strategy to practice, with insightful discussion of the ways in which new approaches to data sharing and technology applications can help utilities get ahead of vulnerability and debt challenges.

As ever, the potential positive impact of creating a shared, cross-sector vulnerability register raised its head, and there was news of real and tangible progress in shaping what such a register might look like from Thames Water and UK Power Networks.

Such demonstrations of the feasibility of vulnerable customer data sharing are critical, it was agreed. For while pioneers in this area are adamant that data can be shared efficiently and in legally and ethically robust ways, an audience poll indicated that many still perceive there to be major challenges involved, most notably in relation to legal and regulatory issues, but also in relation to operational and process barriers, all of which put dampeners on the confidence and enthusiasm of companies to take bold data sharing steps.

As the event drew to a close, the resounding call to action from speakers was for utilities to unite to overcome uncertainties and doubts about how to help customers more efficiently and effectively – with knock-on positive outcomes for the organisational resilience.

“Collaboration must be our watchword,” said one speaker, and current economic and market conditions may finally provide the driver to make it happen with pace and clarity of purpose.

Leveraging technology to tackle debt

In a breakout session sponsored by AI specialist Inawisdom, speakers and delegates shared views on the potential for technology to help utilities and their customers tackle debt challenges.

Customer service leader Andy Clowes spoke about the focus South East Water has recently placed on expanding payment options and how it is trying to address issues around economies of scale for these new technologies via strategic technology partnerships. Meanwhile, ­Inawisdom’s Dimitrios Gontzes described how it’s work with Northumbrian Water has supported leaps forward in the company’s ability to identify emerging affordability issues for individual customers and forecast its debt exposure accurately – and resource itself to mitigate this – months into the future.

The need to bring greater personalisation into consumer debt pathways was a key theme for both speakers, but they also identified a range of challenges – echoes in audience engagement – which can make it hard for utilities to achieve this. Below are listed some of the key obstacles to personalised, technology enabled debt management identified by speakers and delegates

Lack of high quality, well-structured data.

• Low ability to integrate data sets (especially third party data) and generate focused intelligence.

• Fear of overreaching ethical grounds for data use.

• Creating sound business cases for technology investment.

• Achieving economies of scale for technologies which will only help niche segments.

• Lack of in-house skills to ensure technology investments are optimised.