National Energy Action (NEA) has warned existing debt issues within the water and energy sectors have been “badly exacerbated” by COVID-19.
In a policy paper, The Gathering Storm: Utility Debt and COVID-19, published on 9 June, it explained that a combination of reductions in income paired with increased usage of essential utilities, energy bill shocks due to lockdown preventing meter readings, and an inefficient housing stock, will lead to a greater propensity for debt, increased hardship and reduced spending power when the coronavirus crisis subsides.
It set out a series of immediate actions to take to address these issues, including calling for utility suppliers to proactively contact their most indebted vulnerable customers and highlighting the opportunity they have to access the shielded patients list to directly provide debt relief assistance and wider support. Ofgem should also look to strengthen the monitoring and support arrangements for those at risk of self-disconnection and ensure suppliers apply consistent “ability to pay” principles.
With the scale of the challenges customers are facing, NEA called for government to consider more fundamental reforms and support payment matching schemes, sustain the current uplifts in benefits and ensure that debt advice is properly funded as it can help to save lives.