UK energy firms call for regulator Ofgem to be overhauled

"The industry's trade association, Energy UK, has called for the watchdog to be stripped of some of its responsibilities after overseeing a dramatic increase in red tape that it claims has reduced growth and pushed up costs for households. In a report, the trade group noted that despite the government's plan to reduce the cost of regulation by 25% by the end of this parliament, Ofgem's headcount had been allowed to increase by 120% over the past 10 years while its budget grew by 200%."

"The trade group, which represents the views of Britain's biggest energy companies, has called on the government to strip the regulator of many of its duties and to limit its focus on economic regulation of network companies and other energy infrastructure. Instead, it proposes handing the responsibility for protecting consumers to the Competition and Markets Authority (CMA), and the delivery of energy schemes to other suitable organisations."

"The group's indictment of the energy regulator for Great Britain comes amid deepening dissatisfaction with the government's energy policies, and just days after sector bosses told MPs that the approach would lead to a steep hike in gas and electricity bills by the end of the decade. A government review of Ofgem's role by Ed Miliband, the energy secretary, began last December and recommendations for change are expected shortly."

Energy UK called for a radical overhaul of Ofgem, arguing expanded regulation and red tape have reduced growth and increased household energy costs. The group reported Ofgem headcount rose 120% and its budget grew 200% over the past decade while the energy sector workforce increased only 8%. Energy UK urged narrowing Ofgem's remit to economic regulation of networks and infrastructure, transferring consumer protection to the Competition and Markets Authority, and assigning delivery of energy schemes to other organisations. Calls for reform intensified following moves to create a new water regulator and a government review of Ofgem begun in December.

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