Throughout the pandemic there have been repeated warnings that the real impact on utilities was yet to come.
Commentators reached for the thesaurus to find new ways to metaphorise this looming cloud/tsunami/avalanche/wall of debt. All eyes were on the eventual withdrawal of the furlough scheme and with every extension of this deadline came a reminder of the impact it would have.
However, recent conversations within the industry and vulnerability experts have been peppered with signs of some (very) cautious optimism. These match the equally tentative ripples of optimism from economists as the UK has started to rebuild at a quicker than expected rate. The hospitality and (non-essential) retail sectors, who shouldered the worst of the Covid impacts, have somehow survived and are now frantically attempting to scale back up, including an unprecedented recruitment drive. Amazon, the Covid winner by a knockout, has just announced it is taking on 10,000 new workers in the UK.
Even sad news is in some ways a good sign, such as the announcement by debt charity StepChange that it is cutting jobs because the expected surge in cases never materialised. In fact, the number of people supported by the charity in 2020 was down by a third on the previous year, with no sign that the situation will change in 2021.
So, whisper it, were our worst fears actually unfounded? Has government support, the success on vaccines, the caution of the public and the resilience of business stemmed that flow of debt?
Matt Cole, of the Fuel Bank Foundation, agrees that the worst-case scenario has not transpired but warns against complacency. He says high numbers are still turning to the foundation for help and often these are people who have never found themselves in this situation.
He says: “I would still urge utilities to be ready for this winter, where we could still see a perfect storm of factors impacting on customers’ ability to pay. We have to be alive to that very real prospect. There’s a need for a heightened sense of preparedness.”
He believes utilities have played a vital role in mitigating some of the worst financial impacts of Covid but cautions “we can’t go back to old ways of working”.
Several industry players have reassured me recently that this will not be the case. Covid was a wake-up call to ensure vulnerability strategies are fit for purpose and can flex to identify and incorporate new definitions of the term.
One said: “We have been able to make more progress than we ever would have thought possible in such a short space of time. If we do eventually see that big uptick in demand for support, we’re ready for it – or at least as ready as we can be.”