Response to the Debt Relief scheme statutory consultation

1. National Energy Action strongly supports Ofgem’s proposal for a Debt Relief Scheme (DRS) as an urgent and proportionate intervention, consistent with the regulator’s principal objective and vulnerability duty, and aligned with the Consumer Vulnerability Strategy. The scheme will deliver immediate and visible relief to households holding crisis-period arrears and incentivise re-engagement between customers and suppliers through low-barrier routes. It cannot, alone, resolve the wider affordability challenge or prevent future debt accumulation. Lessons from the design, delivery and evaluation of the scheme should inform enduring solutions, including government-led affordability and debt interventions.
2. We also welcome the comprehensive engagement that has taken place throughout Ofgem’s DRS and wider debt strategy process, including the December 2024 policy consultation, the August 2025 working paper, and this statutory consultation. The statutory consultation documents set out a clearer and more workable framework than early iterations, with improved clarity on eligibility and engagement. A timely, low-barrier intervention is necessary given the scale of arrears and the documented increase in domestic energy debt, reported by Ofgem to have reached approximately £4.43 billion by June 2025.

Summary of recommendations

• Proceed with Phase 1 delivery as early as practicable, subject to enabling data sharing legislation, and maintain momentum into Phase 2 with enhanced income and expenditure assessments.
• Keep engagement routes low barrier and measurable. Confirm debt advice referral as a valid alternative where repayment plan fairness is disputed.
• Allow defined discretion to clear sub-threshold arrears for households on means-tested benefits where this prevents reconnection barriers or standing charge accrual.
• Confirm removal of assumed customer contributions from reimbursement and avoid reintroducing conditionality that could exclude households in deepest hardship in Phase 2.
• Publish robust monitoring and distributional data to inform Phase 2 and any future affordability and debt interventions.