Ofgem Compliance and Enforcement Conference 2017

Publication date
10th October 2017
Information type
Policy area

Summary Note

We held our annual Compliance and Enforcement conference on 6 September 2017. Topics included lessons from Ofgem’s compliance and enforcement work over the past year, and a forward look to our future approach to compliance and enforcement, including a discussion on proposed revisions to Ofgem’s Enforcement Guidelines.

Along with our lessons learned presentation and a talk on comparisons with enforcement action in other regulated sectors, both of which are in the attached slides, there was a panel discussion on achieving better outcomes for consumers in the energy sector. Panel members included Jo Upward (Platform and The Institute of Customer Service), Gillian Cooper (Citizens Advice) and Patrick New (Ecotricity). The panellists highlighted some of the opportunities and challenges that the changes in demographics and the development of technology bring in terms of providing a better service for consumers, including ‘personalising’ contact with consumers. We discussed whether there is space for a ‘low frills’ model of supplier in the energy industry; the panel thought this could be acceptable, as long as it were made clear and that consumers' needs were met. However, Ofgem considers the sector has a long way to go in developing the service levels and trust that consumers want, so the focus should be on improving customer service.

The afternoon session opened with a presentation on our future approach to compliance and enforcement. We have introduced a new risk-based engagement approach to monitoring and engaging with energy suppliers on compliance. We also clarified how we will prioritise investigations in our revised enforcement guidelines. This presentation was followed by table discussions (the questions can be found in the slide pack). Common themes and suggestions from the table discussions were as follows:

Question 1: Ofgem’s Objectives – Generally participants agreed with the objectives. Further feedback included better availability/signposting of guidance with more guidance in general, especially with the move to principles-based regulation. Tables discussed ‘credible deterrence’ with a general feeling that fines/payments are not as effective as the impact on reputation. There was an interesting suggestion of introducing ‘Community Service’ type measures for companies found in breach by requiring them to take positive actions for consumers.

Questions 2: Self reporting – Participants would welcome greater clarity on Ofgem’s self-reporting process including: the timing of self-reporting, the materiality threshold for when issues are serious enough to warrant self-reporting, what information is required to be included in self-reporting and what are the most appropriate contact channels. Some participants thought that there could be a better understanding of how cases will be treated after self-reporting.

Question 3: Case prioritisation – Participants reported that the revised prioritisation criteria could be useful for internal compliance teams and Ofgem should continue to be consistent when assessing seriousness of breach and the impacts on consumers.

Question 4: Transparency – Participants welcomed the increased contact with Ofgem in the compliance space over the last 12 months. Suggestions for further improvement included the potential for case studies to highlight when cases stay with compliance instead of going down the enforcement route and regular updates on policy and enforcement issues.

Presentations from the day can be found in the slide pack and speech below.