Britain's regulators must do more to shield consumers from rip-off bills, spending watchdog warns
Britain’s main market regulators must do much more to prove that they can protect consumers amid concerns they appear “detached” from people’s problems, the official spending watchdog has said.
The National Audit Office (NAO) said it could not determine whether Ofwat, Ofgem, Ofcom and the Financial Conduct Authority are doing enough to help consumers or whether they are offering protection to those who need it.
It pointed out that ministers, parliament and and others have “expressed concerns” about water, energy, communications and financial services firms' performance – prompting doubts over the “effectiveness” of their regulators.
In a new report, the watchdog says the bodies were all set up to protect the interests of consumers by promoting competition and encouraging fair prices.
But it says one of the key problems that consumers bring to regulators across all four sectors is dealing with debt from bills and credit repayments against a backdrop of rising prices.
“Regulators have also not been specific enough in defining the overall outcomes they want to achieve for consumers,” the NAO said.
“For instance, they have high-level aims such as high quality, good value services, but do not set sector-wide targets or other success measures to define what these mean in practical terms, such as what level and distribution of prices or service reliability they would consider good or bad.”
The regulators are urged to distinguish between their own performance and that of the market they watch over so that they understand what influence their actions are having.
“The performance of a market or sector does not always reflect how regulators have performed because it is also influenced by other factors such as consumer behaviour or government policy,” they add.
NAO chief Amyas Morse said: “Regulators need to do more to show the concrete results they are aiming to achieve for consumers.
“I understand that there is a difficult balance to be struck between long- and short-term outcomes, between the needs of businesses and the interests of consumers.
“But at present the regulators’ results can come across as somewhat academic and detached from peoples’ practical concerns and pressures.”
Labour's Shadow Business Secretary, Rebecca Long Bailey, said: “This confirms what households struggling with extortionate bills have known for a long time: regulators have a limited ability to protect customer interests.
“This is partly due to a lack of regulatory teeth, and partly due to the inherent contradictions in pitting the needs of bill payers against those of private companies looking to maximise profits.
“Labour would fundamentally reform our regulatory system, for example, by absorbing Ofwat into Defra to create a National Water Agency.”