Ofgem ‘launches investigation into care provider energy cost hike of up to 500%’

This follows concerns over deemed contract rates, security deposits, standing charges and non-compliance with the Energy Bill Relief Scheme

Big Zero Report 2022

The UK’s energy regulator is reportedly investigating social care providers for breaches of its regulations after they reported energy cost increases of up to 500%.

Care England, the largest representative body for care providers in the country, has informed Ofgem that suppliers are charging rates for heating bills that have surged by 500% in the last year, which cannot be justified by falling gas market prices.

A third of care homes in England have reportedly considered closing due to “financially crippling” running costs.

In its most recent report, Care England found that the cost of utilities is becoming an increasingly demanding cost pressure, with 60% of providers citing rising utility costs as a significant factor in 2022.

Ofgem has acknowledged that some suppliers may be charging rates to small companies that are not in line with current market conditions.

Care England and disability charity Hft suggest the government should provide ongoing support for energy costs similar to the Energy Bill Relief Scheme until 31st March and eliminate the 5% VAT surcharge on energy bills until prices stabilise around 2021 levels.

Professor Martin Green OBE, Chief Executive of Care England, said: “The rises in wholesale electricity and gas prices have had a profound effect on businesses and individuals across the country and the adult social care sector has been in the eye of the storm, with some providers experiencing over 500% increases.

“As energy costs, security deposits and risk premia have increased, so has the care sector’s financial instability.”

An Ofgem spokesperson told ELN: “Ofgem is committed to protecting all consumers, both domestic and non-domestic.

“We have received reports that business consumers are not being treated fairly and we take these concerns very seriously. We are investigating these reports and are taking action to ensure suppliers comply with our rules.

“We’ve made a call for input on the state of the non-domestic energy retail market to help us identify the main challenges currently being faced by both consumers and suppliers in this area.

“We’ve received responses on a range of issues, and there is still time for people to give their views before the deadline for input on Friday 31st March 2023.

“The call for input forms part of our ongoing review into the non-domestic energy retail market. All responses we receive as part of the Call will be fully reviewed and help inform our next steps. We aim to publish our findings and consult on our proposed next steps in early summer 2023 and conclude by the end of the year.”

A government spokesperson told ELN: “We know this has been a difficult time for families and the organisations which support them.

“That’s why we’ve been providing charities and other non-domestic energy users with an unprecedented package of support, enabling some to pay around half of predicted wholesale energy costs this winter.

“We’ve pledged further energy support from April onwards through our Energy Bills Discount Scheme.”

Network with hundreds of businesses and public sector organisations taking bigger steps to net zero. Book your FREE ticket to the Big Zero Show 2023 now. 

If you enjoyed this story you can sign up to our weekly email for Energy Live News – and if you’re interested in hearing more about the journey to net zero by 2050, you can also sign up to the future Net Zero newsletter. 

Latest Podcast