The recent Utilities Week Consumer Vulnerability & Debt Conference in Birmingham looked to address the pressing issues of rising fuel poverty and vulnerability, particularly in the context of the ongoing energy transition. Impact Research (Guto Hunkin and Maliyana Limbu) went along to find out more.
This is the first of a two-part blog, focussed on vulnerability and support services (see here for the second part of the blog, which is focussed on communications: Our key take outs Part 2)
1. Defining Vulnerability
As a starting point, what do we mean by ‘vulnerable’? After all, not all vulnerable customers may consider themselves to be ‘vulnerable’ – a key point when choosing engagement terminology, as James Hawthorn of Ofwat explained. Ofwat’s definition of vulnerability is anyone who doesn’t have a “opportunity to access and receive an inclusive service which may have a detrimental impact on their health, wellbeing or finances”. This may be due to “personal characteristics, overall life situation or due to broader market and economic factors”.
It’s also worth considering Scope’s definition of disability and how it may be broadened to other vulnerabilities. Kristina Barrick and Christine Tate explained that Scope uses a ‘social model of disability’, whereby people are disabled by the barriers put up by society, whether they are physical, digital or attitudinal barriers. A similar model could be applied to vulnerability, so that the vulnerable are those who are underserved by society.
On the issue of defining vulnerability, this is an area which Impact Research has been very engaged in – we often conduct research which are targeted at vulnerable customers. Indeed, at the Energy Innovation Summit in Liverpool, David Pearmain, Director of Advanced Methods at Impact presented findings of a project which segmented customers according to vulnerability and identified their specific needs.
IMPLICATION: We cannot oversimplify ‘vulnerability’ – there are several considerations which may make a person vulnerable. It is important that we understand those circumstances and understand the unique needs of people in different circumstances, whether in service delivery or in the tailoring of engagement
2. Escalating fuel poverty and vulnerability
A common theme at the conference was the increase in fuel poverty and vulnerability. The Rt Hon Caroline Flint (Committee on Fuel Poverty) talked about how up until 2021, energy prices had remained steady, but since then the proportion of households spending 10% or more on energy has increased from 21% to 30%. Jemma Baker of Ofgem also talked about the long-term consequences and worrying trends in fuel poverty. Dhara Vyas of Energy UK agreed, stating that “the needs are off the scale”. And the issue isn’t confined to energy; as Emily Bulman of Ofwat pointed out, 57% of households struggle to pay their water bills, compared with 34% in 2021 – a staggering 68% increase.
All of which can have momentous consequences on the vulnerable. Scope showed a video of how fuel poverty forced one person to switch off their heating and hoist which they relied upon for their care. More real-life impacts were shown by Kerry Potter of SGN, who along with other Gas Distribution Networks (GDNs) have partnered with Marie Curie. A terminally ill person’s energy cost can rise by 75% after diagnosis – for the terminally ill, reducing energy use can result in emotional impacts (e.g. discomfort during a person’s last stages of life, and worries about the affordability of bills and leaving a family with a legacy of debt) and physical impacts (e.g. increased likelihood of admission and readmission to hospital and even a premature death).
3. Increased demand for support
With fuel and water poverty on the increase, it’s of little surprise that there is a growth in registration for support from utilities. Emily Bulman explained that the number of customers on social tariffs has increased by 20% since 2021-22 (and up 50% compared to 2020-21), while the proportion of customers on a Priority Service Register (PSR) has increased from 5.7% in 2021-22 to 8% in 2022-23.
However, there remains more to be done to increase awareness of PSR and other support services. Scope talked about customers not knowing who to turn to for support, thus resulting in a build-up of debt; in this respect, Scope can help signpost disabled people to relevant support services. To address low awareness of PSR among the terminally ill, Kerry Potter highlighted how GDNs have introduced “Energy Support Officers” to Marie Curie, and are raising awareness of fuel poverty issues and support services among Marie Curie’s nursing staff.
Similarly, several research findings from Impact show that PSR awareness is low and there is general frustration and confusion from both customers and supporting organisations around the disjointed efforts to support the vulnerable.
IMPLICATION: Fuel poverty has increased significantly and will have long lasting effects, especially on certain groups of vulnerable customers. Utilities need to ensure that support services, such as the PSR and social tariffs are readily available, well-known and easy to access.
4. Collaboration and data sharing
Several speakers spoke about there being a need for greater collaboration between utilities to create more unity across individual PSRs (which are sometimes disjointed and lack coordination). As Jemma Baker of Ofgem stated; “No one body can solve this, we can only solve it together”. She called for greater data sharing and a central database for customers who register for support – a wish that was repeated by speakers throughout the day.
Dr Christopher Fitch (of Money Advice Trust) and Scope called on a simplification of processes for consumers. A video showed how some vulnerable customers feel too exhausted to go through a series of hoops and hurdles to register numerous times for support. Others may avoid contact as they feel uncomfortable with social interactions. Similarly, Scope showed evidence of how disabled people are less likely to contact service providers due to them feeling emotionally drained, anxious and demoralised about interactions with utilities. Simplifying the process through alignment of services and greater data sharing, and introducing ‘tell us once’ services, would encourage greater take up of services and give back valuable time and energy for drained and exhausted vulnerable customers.
However, there are efforts underway to address this. Emily Bulman of Ofwat talked about data sharing between water companies and electricity networks. Helen Sharp-Patterson of Northumbrian Water demonstrated one example, called the Support for All partnership project; a pilot project which will create a single cross-sector PSR platform (across water, gas and electricity) in two regions. If the pilot is successful, then it is hoped that it could be rolled out across all other regions.
Similarly, Project Spotlight by UKPN is a new initiative focused on utilising advanced data and machine learning to effectively identify customers who should be on the PSR, those in fuel poverty and those who are at risk of being left behind by the energy transition. This is done by tapping into data from a range of sectors like telecommunications and finance to not identify specific customer segments but to hopefully transform assistance to be more precise and tailored.
Steve Donovan from OVO Energy also shared their current PSR+ system focused on providing holistic support when customers sign up for the PSR. In collaboration with Sonex Financial and Scope, the PSR+ supports customers with medical equipment, health conditions, mental health issues and communication needs as they understand that vulnerability to energy does not exist in a silo. Initial data is positive with an 18% increase in first-call resolution, a 7% increase in customer satisfaction (CSAT) and a 14% uplift in advisor confidence.
IMPLICATIONS: To increase the take-up of support services such as PSRs, utilities need to collaborate and coordinate their services through greater data sharing. Furthermore, simplifying the registration process though a ‘tell us once’ service will reduce the number of times a customer needs to register for support.
Next:
To read the second part of this two-part blog, and learn about communications and water tariffs, please click here: Our key take outs Part 2
For more information on the issues discussed in this blog, please contact Impact to discuss how we help utilities in their efforts to support vulnerable customers, to evaluate initiatives such as social tariffs, and to test the effectiveness of their communications.