Hey everyone,
Over the last couple of years, I’ve been asking Ofgem every other month for updates on their British Gas investigation and basically get a blanket response of “we cannot talk about ongoing investigations”, so this time I tried a new tactic, I sent a Freedom of Information request. The details (questions and answers) are at the bottom of this article, but first here’s the background.
Why are Ofgem investigating British Gas?
Way back in January 2023 (yep, almost 3 years ago now) it was revealed that agents of British Gas were forcibly entering the homes of vulnerable consumers and installing prepayment meters. They had warrants and even had the police supporting them, but what they were doing was illegal.
To be clear, it was perfectly legal for energy suppliers to forcibly enter a home and install prepayment meters, but the rules stated they couldn’t do it to vulnerable households – that’s those with residents over the age of 75, under the age of two, or households with residents that suffer from certain disabilities or diseases.
At the time Ofgem put a blanket ban on involuntary fitting of prepayment meters over the entire market, which lasted for about a year. During that year, Ofgem put in place stricter rules (which seemed stupid to me – they weren’t following the rules already, why would you think they’d follow different rules) and they began a series of investigations. Over the last couple of years, Ofgem opened and closed various investigations into some of the energy suppliers who were breaking rules when involuntarily fitting prepayment meters in people’s homes. After two years, Ofgem eventually issued a redress scheme for customers that were impacted – you can read more about that here: https://www.ofgem.gov.uk/news/compensation-installing-prepayment-meters-without-permission.
Right after this all came out in the news, Ofgem opened an investigation into British Gas’s role in this prepayment meter scandal. I believe the investigation started in the back end of January, maybe early February, 2023, putting us just three months away from this being an active investigation for three years.
What did Ofgem say in the Freedom of Information Request?
Below, in italics, are the questions I sent and the answers I received. If you prefer a shorter summary, scroll further down and I summarise it.
Thank you for your email of 3 October in which you requested the following information:
“Could you provide answers or comments on the following questions please:
1. What is the current status of Ofgem’s investigation into British Gas’s role in the prepayment meter scandal?
2. How many British Gas customers are estimated to have been affected by forced prepayment meter installations?
3. How will this investigation and any potential penalties ensure greater protection for vulnerable customers in the future?
4. If it is found that British Gas have breached the terms of their SLCs, how will Ofgem ensure British Gas do not commit similar or other breaches in future?
5. Why has this investigation taken 32 months so far without any updates from Ofgem?
6. How much has this investigation cost Ofgem, and therefore consumers, so far?
7. What is the total expected cost of this investigation?
8. When is this investigation expected to conclude?
9. What penalties or enforcement actions could British Gas face if found in breach of regulations?
In addition to any answers or comments you’re able to provide on the above, I’m requesting, as a Freedom of Information request, all documentation and information you can provide on the investigation into British Gas for the potential breach of Standard License Conditions 0, 13.1 (a) and (d), 23, 26, 27, 27A, 28, 28B.1 and 32.”
We have considered the elements of your request that asks for recorded information held be Ofgem under the Freedom of Information Act 2000 (“FOIA”), and we have decided we can disclose some, but not all, of the information to you.
We address parts 1 and 3-9 of your request in turn below and, where we do not hold some of the information requested, we have confirmed this to be the case. This includes information that is dependent on the outcome of the investigation, which is not yet concluded.
The information requested at (2) of your request is refused under Sections 31 and 44 of FOIA. Your request in the second part of your request for ‘all documentation and information’ relating to the current investigation into potential breaches of licence conditions, beyond that provided in the Disclosure section below, is refused under Sections 31, 42 and 44 of FOIA. Please see the Exemption section below for more details of the exemptions applied.
Disclosure
- What is the current status of Ofgem’s investigation into British Gas’s role in the prepayment meter scandal?
The British Gas PPM Enforcement investigation is in progress. Details of the investigation are published here:
British Gas – PPM Installation Investigation | Ofgem
The Terms of Reference of the investigation are published here:
Ofgem approach to investigation into British Gas Trading Ltd’s compliance with Standard Licence Conditions (SLC) – SLC 0, 13.1 (a) and (d), 27, 28 and 28B.1 of the Gas and Electricity Supply Licences announced on 2nd February 2023 | Ofgem - How many British Gas customers are estimated to have been affected by forced prepayment meter installations?
Ofgem refused to answer this question, stating “The information requested at (2) of your request is refused under Sections 31 and 44 of FOIA. “ - How will this investigation and any potential penalties ensure greater protection for vulnerable customers in the future?
We do not hold this information.
To advise and assist you, Ofgem may impose a penalty/consumer redress order if it makes findings of non-compliance. As stated on our website, “the opening of this investigation does not imply that we have made any findings about non-compliance by British Gas.” For general information about the steps Ofgem takes and the factors it considers when setting penalties, please refer to our Statement of Policy with respect to Financial Penalties and Consumer Redress | Ofgem, available on our website. - If it is found that British Gas have breached the terms of their SLCs, how will Ofgem ensure British Gas do not commit similar or other breaches in future?
We do not hold this information.
Please note, however, that in 2023 Ofgem introduced new measures aimed at strengthening protections for customers in vulnerable situations, including these that deal specifically with prepayment meter (PPM) installations that are enforced under warrant or remotely switched without consent (all involuntary installations).
On 21 February 2023 Ofgem outlined next steps on forced PPM installations and, among other measures, announced the scope of the in-depth Market Compliance Review (MCR) into the issue of how PPMs are handled across the market. On 18 April 2023 we published a Code of Practice for the involuntary installation of prepayment meters (PPMs) that was confirmed on 13 September 2023[1]. - Why has this investigation taken 32 months so far without any updates from Ofgem?
This is one of the most complex and data-heavy investigations Ofgem has conducted. It is important that all evidence is examined and assessed thoroughly and fairly. As set out in Ofgem’s Enforcement Guidelines (see section 5.31), we aim to carry out investigations as efficiently and promptly as possible. However, the nature of the cases we investigate varies significantly in terms of type, complexity, and scale. - How much has this investigation cost Ofgem, and therefore consumers, so far?
We do not hold this information. - What is the total expected cost of this investigation?
We do not hold this information. - When is this investigation expected to conclude?
We do not hold this information. As referred to above, we aim to carry out our investigations as efficiently and promptly as possible. - What penalties or enforcement actions could British Gas face if found in breach of regulations?
The actions available to Ofgem are set out in legislation, our Enforcement Guidelines and Statement of Policy with respect to Financial Penalties and Consumer Redress.
We cannot comment further on a live investigation. As stated on our website, “the opening of this investigation does not imply that we have made any findings about non-compliance by British Gas.”
For general information about the steps Ofgem takes and the factors it considers when setting penalties/consumer redress orders, please refer to our Statement of Policy with respect to Financial Penalties and Consumer Redress | Ofgem.
Exemptions – Request 2
Information on the number of British Gas customers estimated to have been affected by forced prepayment meter installations is exempt from release under FOIA and the following exemptions are applied:
Section 44:
Section 105(1) of the Utilities Act 2000 states that information which has been obtained under or by virtue of the provisions of Part 1 of the Electricity Act 1989, and which relates to the affairs of any individual or any particular business shall not be disclosed during the lifetime of the individual or so long as the business continues to be carried on. The information requested was obtained by virtue of Ofgem’s statutory functions and relates to the affairs of British Gas.
As such, section 44(1)(a) FOIA applies: ‘the information is exempt information if its disclosure (otherwise than under this Act) by the public authority holding it (a) is prohibited by or under any enactment’.
Section 44 is an absolute exemption which means it is not subject to the public interest test.
Section 31:
The information requested relates to an ongoing investigation into British Gas, and its disclosure would, or would be likely to, reasonably prejudice Ofgem’s ability to carry out its regulatory and enforcement functions effectively and efficiently under section 31(1)(g), read together with section 32(2) (law enforcement) of the FOIA.
This exemption is subject to the public interest test. While there is a public interest in transparency and accountability, there is a stronger public interest in ensuring that investigations are not compromised and that enforcement processes are conducted effectively and efficiently.
Exemptions – Second part of your Request
Although your request for ‘all documentation and information you can provide on the investigation’ could be interpreted very broadly, we consider that information that is not published by Ofgem (e.g. at British Gas – PPM Installation Investigation | Ofgem) and relates to the ongoing investigation is exempt from release under FOIA
[1] Further details are available at Involuntary prepayment meter decision | Ofgem
Summarising what Ofgem said in their response to the Freedom Of Information Request
Okay, so here is what Ofgem have said:
- Investigations take time, this is a big one, they do not know how much longer it will take
- They do not know how much this massive investigation has cost – please bare in mind all Ofgem costs are put onto energy bills, so we’re the ones paying for this
- Ofgem have cannot comment on any likely enforcement action that they might take
- Ofgem cannot tell us how many customers have been impacted
- Basically – the FOI gave us no new information, no expectation of a conclusion or of recompense for impacted customers – it gave us nothing
There are a couple of links in the FOI request that take you to Ofgem webpages on the investigation, but they don’t really give any more interesting information either.
We’re coming up to three years since Ofgem started this investigation, the public are footing the bill for this investigation and yet, there is no outcome, no timeline, no budget for cost, no explanation of whether those costs will be passed onto the supplier or whether they will continue to at the expense of consumers.
This is a flaccid response from a flaccid regulator, but I will continue to follow up with them for information or at least a timeline.
If you have any questions or comments, please email me at Richard@TheRegulatorGuy.co.uk.
Thanks all,
Richard Winstone
The Regulator Guy.
