Essential services, Essential oversight: What’s a statutory consumer advocate, and why do they matter?

When people think of Citizens Advice, they most often think of our incredible network of frontline advisers helping people to find a way forward at the most challenging times in their lives. And we definitely are that. But we’re also the statutory consumer advocate for the energy and post markets. We have a role advocating for consumers on issues which cut across essential markets.

But what does this mean and why is it important?

The short answer is that statutory consumer advocates are a vital part of a well functioning essential market, acting as a counterbalance to well-resourced industry voices and an early warning system for emerging consumer problems. We also ensure that consumers have a seat at the table, and their voice is heard, when important decisions are made.

There’s a huge imbalance of knowledge, power and resources in essential markets

As consumers of essential services (like energy, water and telecoms services) we generally don’t really care about the ins and outs of how the market works and the legal and regulatory framework which sits behind it. And we shouldn’t have to. We just want to receive a reliable service at a fair price, for any problems to be resolved quickly and with minimum hassle, and to receive compensation when we’ve been inconvenienced or left out of pocket.

Sounds simple enough, and it should be. But unfortunately all too often this isn’t the case. While companies which provide essential services don’t intentionally go out of their way to rip their customers off.

They also don’t provide the service out of the goodness of their hearts — they exist to make a profit for their shareholders. So they’re incentivised to cut costs wherever possible, charge as much as their customer base is willing to pay, and ensure that their customers pay their full bill on time, even when they can’t afford to. This can lead to huge amounts of consumer harm and people in vulnerable circumstances are often affected most. That’s when people turn to our frontline services for help.

Isn’t the regulator supposed to protect consumers from badly behaving companies?

All essential services markets have regulators. And it’s their job to put rules in place to ensure that the market operates effectively. Some of these rules are there to protect consumers, others to promote effective competition and ensure a level playing field for companies operating in the market.

However, regulators aren’t well equipped to quickly spot emerging and existing causes of consumer harm. They don’t have the vast amount of real time front line data we do, and are often overwhelmed with the number of different priorities they’re juggling. Sometimes they’re just not looking hard enough.

Even when they do accept there’s a problem, new regulations can take many months or even years to put in place.

Rules are pretty much pointless unless they’re enforced, and in our experience regulators can often be far too slow and weak when it comes to cracking down on rule breaking.

For example, over the course of several months in 2022 we provided Ofgem, the energy regulator, with strong evidence that people were suffering significant harm because the rules around the force-fitting of prepayment meters were no longer fit for purpose. However, the regulator failed to take meaningful action until we went public with our findings, which were widely covered in the press and in parliament, and The Times published the shocking findings of their undercover investigation. The delay in cracking down on energy suppliers led to many more consumers being forced onto prepayment meters they couldn’t afford to top up, and spending the winter living in the cold and dark as a result.

It can also be far too easy for well-resourced and powerful industry voices to influence regulation in their favour. As well as being able to exert huge amounts of influence over the regulatory making process, firms can also force favourable changes to regulations after the fact through an appeals system heavily weighted in their favour.

Finally, essential markets are very complex, and regulations can be technical and near impossible for your average consumer to understand and engage with, even if they wanted to. This tips the balance of power further towards companies.

This is where the statutory consumer advocate comes in…

As the consumer advocate for energy, post, and cross-sector we’re given funding and special powers to champion the interests of consumers in these markets, providing a counterbalance to the powerful industry lobby.

We do this in a wide range of ways, from spotting and highlighting trends in our frontline data and commissioned research to persuade the regulator and government to take action, to fighting the consumer’s corner at technical meetings about complex regulatory changes.

Our funding comes from a levy on the companies operating in these markets. Ultimately these costs will be passed through to consumer bills, but we provide excellent value for money. Although it’s still far from a fair fight, we’re still able to have a huge impact for consumers. Just a few examples of what we’ve achieved for consumers over the last year include:

• We identified that the Energy Price Cap was applying some data that was only relevant for non-prepayment consumers to all consumers. Ofgem then amended its methodology leading to a reduction in the cap. The savings to households from this single intervention were more than what it would costs for us to act as a statutory advocate for 30 years. This shows the enormous power (as well as value for money) of having a consumer voice
• The price of a first class stamp is now almost 100% more than it cost just 5 years ago, increasing 3 times more quickly than second class stamps. Without the second class price cap, consumers might have been hit by similar hikes for second class post. We provided evidence to Ofcom on the impact this would have on consumers and campaigned to keep the cap. Ofcom has now proposed the cap will stay in place for the next 5 years, protecting affordable access to postal services for consumers

Consumer advocacy needs strengthening in some vital markets

Financial services, mobile phones and broadband are without doubt essential services — it’s more or less impossible to live life without them. But consumer advocacy in these markets looks very different than in energy, post, transport and water. In telecoms and financial services consumers are represented by a part time expert panels, the Financial Services Consumer Panel and the Communications Consumer Panel. These panels have a limited budget to carry out research with consumers and provide largely behind the scenes advice to the regulators on consumer issues. They do add value, but are no replacement for a fully independent, full-time consumer advocate which has the resources, powers and frontline experience to be the vocal, influential voice consumers really need.

This Government has recognised the need for influential consumer advocates by appointing Citizens Advice as the statutory consumer advocate for heat networks — a role we will take up from April 2025. It has also recognised the need for stronger consumer advocacy in telecoms — in 2019 it consulted on a proposal to introduce a statutory consumer advocate for telecoms, but no real progress has been made since.

There are few things which could have more of an immediate positive impact for consumers than closing the consumer advocacy gap in telecoms and financial services. We’re calling on all political parties to make this a priority following the next election, whichever party ends up in power.

This blog is part of a series by Citizens Advice, “Essential Services, Essential Oversight” looking at the role of regulators and exploring ideas which aim to put the consumer at the heart of markets.