StepChange Debt Charity is a specialist not - for- profit provider of debt advice and debt solutions supporting people across the UK. In 2025, over 160,000 people completed a full debt advice through our online and telephone service.
We welcomed the opportunity to feed into this consultation on the implementation of a Consumer Outcomes framework. While we see some potential in this move, we emphasised that this should not come at the expense of valuable prescriptive rules and that we do not see regulatory principles/outcomes as a substitute for prescription. Instead, they are often both important and mutually reinforcing because:
- Prescription is often essential to give substance and intention to high level principles, particularly where risks of harm and poor outcomes, and levels of consumer vulnerability, are higher.
- Prescriptive rules are the basis for customers to challenge supplier practices, and consumer advice depends on this transparency and clarity.
- Similarly, as an advice provider, clear expectations for suppliers in some areas like support with arrears are essential to be able to advise clients and achieve good debt advice and solution outcomes.
- There is a history of firms arbitrating gaps or ambiguities in high level rules where prescription has been crucial to stop harm to customers, most recently in regard to mandatory PPMs.
- Prescription can alleviate burdens on suppliers that are otherwise uncertain as to Ofgem’s expectations.
- Monitoring outcomes requires reasonably specific expectations, and without those expectations outcomes-based regulation risks becoming an absence of effective regulation.
Notably, the Consumer Duty has not ended the need for the Financial Conduct Authority’s (FCA’s) more detailed handbook and, while the FCA identified some areas to simplify the handbook post-Consumer Duty, in practice the Duty has complemented rather than replaced most rules. We believe that is the right approach.
In contrast to the Consumer Duty, Ofgem has not yet proposed a high-level principle to guide firms. Higher level principles are important because they shape supplier culture, values and norms and guide interpretation of more specific outcomes.
With all this in mind, we said that key factors Ofgem should consider in look to update its regulatory framework are:
- The importance of clear high-level duties and principles to shape supplier culture with which specific outcomes, license conditions and guidance are aligned. Here we are concerned that the proposed seven outcomes will not operate coherently without a higher level principle, and recommend Ofgem goes further than its proposal for ‘an overarching licence requirement for suppliers to have regard to the overall customer impact’ and implements a consumer principle in the energy market.
- The importance of an effective approach to consumer vulnerability. While we recognise the rationale for simplifying the initial 24 outcomes, removing a vulnerability outcome and instead relying on treating vulnerability as a cross-cutting issue risks being ineffective and downgrading an issue that is central to the need for a more effective regulatory framework. We would like to see Ofgem embed the extra care needed for consumers in vulnerable circumstances as a central tenet of the outcomes framework.
- Setting clear expectations of suppliers in both monitoring outcomes and acting to address problems and improve outcomes: here, we recommended that Ofgem introduce a requirement on suppliers to produce an annual report setting out findings from outcomes monitoring and an action plan.
- That regulation is necessary because the interests of suppliers and consumers are not always aligned: that means a degree of prescription and effective monitoring and enforcement will always be essential aspects of energy regulation.
- That when regulation is effective, principles-based and prescriptive rules are not alternatives but complement one another.
- The operational resources and capacity building required to enable effective monitoring, supervision and enforcement in an outcomes-focused setup.
Finally, a fundamental barrier to good outcomes is widespread energy unaffordability. We support Ofgem’s consumer protection focus, which can help prevent and mitigate harm and improve outcomes in the current context, but a long-term solution to deliver affordability for customers at risk of fuel poverty is essential alongside this work. Ofgem must continue to work closely with Government on this pressing challenge.