Energy offline – The growing digital divide

Dr Matthew Scott, Research and Policy Officer at NEA writes about digital literacy. 

In his classic 1979 definition of poverty, Peter Townsend proposed that individuals, families, and groups can be said to be in poverty when they lack the resources to access the amenities and services that are widely available in society. A recent report from Ofcom states that more than 1 in 10 adults do not use the internet, and the Office for National Statistics (ONS) estimates that 5 million people in the UK have never used the internet in their lives. Digital exclusion refers to being unable to physically access the internet and/or have a high enough level of motivation or digital literacy to use it effectively and appropriately. Digital exclusion matters because of the way it increasingly shapes access to essential services that are critical to the alleviation of poverty, including fuel poverty. Over the past decade, ways of accessing the amenities and services that people need have migrated online; we now live in a digital society, and people who are excluded from the digital world are simultaneously often excluded from essential services and support.

The energy industry has mirrored this digital shift, with the consequence that millions of customers cannot access the best deals or often miss out on key services. Those without internet access or limited digital skills are more likely to miss out on the cheapest deals and are less likely to be able to access services such as the Priority Services Register (PSR), Warm Home Discount (WHD) and other financial or energy-related services. NEA estimates this could be costing consumers up to £485 per year, over £150 more than the average fuel poverty gap in England.[i]  In extreme cases, these increased costs can lead to an increased risk of living in fuel poverty and harmful energy rationing practices.

These issues have been exacerbated as a result of the ongoing Covid-19 crisis. NEA recently announced a Call for Evidence (CfE) to investigate the impacts of the crisis on vulnerable and fuel poor households, to which we received 73 responses from charities, local authorities, energy suppliers, distribution companies, and other organisations across the breadth of the UK.[ii] Digital exclusion was a common theme throughout responses. Most notably, respondents highlighted that the enforced cessation of face-to-face contact was severely hampering the support they were able to offer. For digitally excluded households, home visits or drop-in sessions are often a crucial artery of support, advice, and information, but for the vast majority of respondents to our CfE their services had entirely transferred to telephone and email. This has caused major problems, two of the most severe we are going to highlight.

Firstly, charities in particular told us about the difficulties they faced in securing ‘Authority to Act’ representation rights for digitally excluded households. One respondent told us that:

It has been far more difficult to obtain consent to advocate due to energy company waiting times and the process of not being with the customer directly.”

Some organisations had attempted to get round this by organising conference calls with energy suppliers and inviting clients to participate, but if a client does not have the internet or is not confident with video calls this is evidently not an option. In such cases, as one respondent relayed:

We are sending paper copies of Authority to Act forms out to digitally excluded clients and having to wait for its return, or sending out an electronic copy, which relies on the client having a printer, to print out, sign, take a photo or scan the document, then return to us by email (or by post).”

The delays caused by such a protracted process were often described by respondents as insurmountable, especially in urgent situations, and even in situations where consent was secured, respondents described a secondary raft of problems around obtaining images or scans of necessary bills or other paper documents from digitally excluded households.

Secondly, respondents highlighted what could be called the digital bias of Covid-19 information provision, and the detrimental impact this continues to have on digitally excluded households. Gov.uk and supplier websites were frequently described by respondents as difficult to navigate, with information on support described as difficult to identify among the ‘business as usual’ content and difficult to understand. For example, one respondent told us that:

“The Gov.uk website can be difficult to navigate, particularly for those claimants who have no experience of the platform. There is a significant variation in the support provided by the energy companies, some are extremely supportive given the customers circumstances and others not so.”

 

Respondents accordingly described how households with internet access but with limited digital skills, and who may need urgent benefits advice or are worried about accumulating energy debt, struggled to get the information they needed online. For these households and households with no internet at all, the telephone becomes the last lifeline of lockdown support. However, respondents told us how call waiting times, the use of automated attendants, and the ways people are encouraged to use web or email platforms to find information are making it especially difficult for digitally excluded customers to access support over the phone:

“Companies are promoting the discussion to be by email, or webchat, not telephone. Clients are then asked to sign into [their] account and this may be the issue, they cannot. If there is a number, clients do not always speak to someone.  Clients are becoming frustrated that they cannot speak to advisers.”

In these cases the onus to contact arguably needs to shift from customer to supplier, and among the barriers highlighted in our CfE we also heard examples of creative and innovative practice, especially regarding energy suppliers and distribution networks collaborating with community groups to better identify digitally excluded customers.

With the colder months only a few months away, what can we learn from this testimony? Energy suppliers have a duty to treat all of their customers fairly. If so, it is important that those offering support find ways to communicate this to a larger audience. It is not enough just to put information online. Other means of communication, such as letters, calls, and adverts (e.g. on TV and radio) are available and should be used with particular consideration of digitally excluded households and others living in vulnerable circumstances. Suppliers could also take steps to proactively identify and contact digitally excluded households, for example by identifying those who are on Standard Variable Tariffs, who have not switched energy supplier or tariff in a number of years, who opt for paper billing, who pay their bills quarterly rather than monthly, who do not have a registered contact email address, and/or who live in a (likely rural) area with poor or no broadband coverage.

Simultaneously, the Government need to ensure support services such as the WHD and the new Green Homes Grant (GHG) are not beyond the reach of digitally excluded households. The GHG must not become an online scramble for a finite number of vouchers – more like the release of tickets for Glastonbury than a properly targeted scheme – and it must instead be designed in a way that is accessible and simple for low-income, fuel poor and vulnerable households. As NEA has previously suggested, using existing powers within the Digital Economy Act could also help at least an extra 0.6 million, and possibly more than 1.5 million more households, receive WHD, especially in cases where they miss out on this support each year either because they are unaware of it or because they fail in their applications due to the limited annual budget. Lastly, Authority to Act mechanisms must be enforced and able to be activated quickly in virtual settings. These steps are especially vital because of the possibility of Covid-19 rebounding in winter temperatures, as has recently been suggested by evidence published by the Government’s SAGE Committee and a report by the Academy of Medical Sciences.

All of this means that as government continues to reopen society, steps need to be taken to ensure that if a second lockdown is needed we are well prepared to provide digitally excluded households with the resources to access the support and services that they will require. For obvious reasons, Townsend’s initial sixty-strong list of deprivation indicators did not include digital literacy or internet access, but as we know now those in the lowest income groups are far more likely to face digital exclusion than others, they would likely be near the top now were he to update it. Digital exclusion is one of the numerous fissures in society that has widened and deepened as a result of the Covid-19 crisis, and if this fissure is not closed before winter the likely impacts will be hugely detrimental and, ultimately, deadly for digitally excluded households.

[i] This figure is calculated based on the value of the Warm Home Discount (£140), Ofgem’s estimate of the average saving of switching away from a default tariff to a cheaper deal (£305), and the discount offered by some suppliers for opting for paperless billing (£40), although it is commendable that many suppliers have now acted to remove the paper billing premium.

[ii] A full analysis of the outcomes of the CfE will be presented in NEA’s Annual Fuel Poverty Monitor later in the year.

 

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