Energy suppliers should be mandated to provide emergency credit to customers with pre-payment meters (PPM), a former Npower vulnerability chief has said.
Matt Cole, chair of the Fuel Bank Foundation charity, who previously served as Npower’s head of policy and customer vulnerability, says his charity is seeing more people seeking help who would have never previously needed assistance due to the coronavirus pandemic.
Cole said that while the traditional largest energy companies all have levels of emergency credit, a lot of the newer market entrants do not offer this service.
Speaking to Utility Week, he said: “I think it’d be useful, especially with Covid-19 at the moment, to know that there is kind of a fallback, so if you are ill or you can’t get out to the shop to top up or whether you’ve run out of money, you have got that guaranteed amount at the press of a button.
“It gives you a bit of respite for a week or two, until things get sorted. At the moment it’s a voluntary thing, suppliers aren’t obliged to provide emergency credit, some people do and some people don’t and there will be commercial reasons for that.”
Cole said the latest estimates of how much such a scheme would cost range from £8-10 million, but that the modelling for this was conducted pre-coronavirus and so the current figure is likely to be much higher.
He added: “It feels like we maybe need to sweep away some of the old rules and think about what people need today. I’m not advocating that we have a huge emergency credit level which may exist for the rest of eternity, it is something we should revise and refine. I would argue maybe a smaller amount in the summer and a higher amount in winter is probably more appropriate because it matches people’s consumption patterns.”
Furthermore, Cole said it is often difficult to provide detailed advice to customers as it involves knowing the intricacies of around 60 energy suppliers on the market and what their policies are regarding vulnerability.
He continued: “I think a national mandated scheme would be really great because then it gives a simple message across the UK, that everybody’s got access to emergency credit if they need it because they are pre-pay. And I think that will make it easier for people to understand what support is out there.”
Cole believes any such mandated scheme will need the backing of government which will need to step in and compensate suppliers for the cost they incur where customers do not pay back emergency credit quickly.
“I imagine it absolutely needs government funding to make it happen. Because I think if not, a lot of suppliers would actually struggle to economically deliver it.
“The cost of effectively giving people free electricity and gas would be prohibitive. It’s about not being idealistic and say, let’s just make it happen, instead what’s the enabler to make it happen?”