Authority guidance on the allocation of redress funds

Publication date
24th August 2017
Information type
Policy area

We have appointed the Energy Saving Trust (EST) as the independent Service Provider to manage and allocate voluntary redress funds.

Companies may volunteer to pay a sum of money to appropriate charities, trusts or organisations in lieu of, or in addition to a financial penalty for breaches of licence conditions. Companies may also volunteer these payments to remedy any harm to consumers, in addition to compensation to those directly affected, where Ofgem has not conducted a formal investigation.

This appointment follows our decision to engage an expert third party organisation, following a consultation on the proposal in summer 2016. EST will follow the Guidance document below when carrying out this service, and we may update this Guidance from time to time at the Authority’s discretion.

Our decision to engage an expert third party, and the associated Guidance below, are to ensure the voluntary redress funding is well targeted, and is allocated in the best way to maximise the long-term positive impact of voluntary redress payments for energy consumers across Great Britain, and in particular those in vulnerable circumstances.

The contract will run for an initial 2-year period, which may be extended by up to 4 years.

In January 2018 we decided to lower the amount of voluntary redress funding required for EST to begin allocating funds from £500,000 to £250,000. That amount was achieved in February 2018 and EST will award funding for the first round of applications from July 2018. Further information on eligibility for the scheme, and how to apply, can be found on EST’s website.