Time is money: the constraints of poverty

The Fair By Design team attended the joint New Statesman/Energy UK event on transforming energy services for customers in vulnerable circumstances, with friends and colleagues from National Energy Action, Alan Whitehead, a Shadow Minister for Energy and Climate Change, and Joanna Elson from the Money Advice Trust.

Of particular interest to us were the wise words of Audrey Gallacher, Director of Policy of Energy UK. While noting that recognising vulnerability, from the perspective of a call centre operative, might be through training or empathetically listening during a customer call, also pointed out how difficult it is for any organisation or body to recognise issues around mental health or financial distress.

She pointed out some research from 2018 Citizens Advice that hit home, worth quoting at length:

Of the 140,000 households that self-disconnected — when prepay energy customers lose supply of energy to their home due to a lack of funds on the meter — because they couldn’t afford to cover their energy costs:
50% had someone with a mental health condition
33% contained a young child
87% were in receipt of benefit
[Citizens Advice] is concerned by findings which show that just 9% people who self-disconnected because they could not afford to contacted their supplier to discuss the issue.

It’s very easy to suggest that the simple solution to people’s energy problems is to switch supplier. But there is a low number of people among those on prepayment meters, who have had to go without heating, who for one reason or another do not call their supplier to discuss the issue. This is a huge concern. But it is not a game of cat and mouse. If alarm bells are ringing the firm in question should be more proactive.

Waiting for consumers themselves to make the first call would be ideal, sure, but knowing what we know, about even being able to afford a phone call to a firm, or having the confidence to do so, the firm itself has a duty. A duty of care.

Of course, there is a time issue for consumers. Sometimes the extremely busy lifestyles of people (we’ve all heard stories of people holding two or three jobs at one time) struggling to make ends meet renders it difficult to find time to put in that phone call to firms — especially to tell someone on the other end of the phone that budgets are tight.

With poverty, time is of the essence. And there are often practical constraints of time.

Other interesting aspects of the event included hearing about the “tease and squeeze” tactics of some firms, the extra costs faced by energy customers when a one-year deal comes to an end. Also Joanna Elson’s well-made point about sector-level good practice, exemplifying Npower contributing fuel to Trussell Trust food banks so people can enjoy a hot meal if in a destitute situation.

Rebecca Newsom from Greenpeace raised a particularly interesting point about the commitment of the panel to ensure zero carbon homes. This is an issue close to the Fair By Design campaign. Energy efficient homes is both good for the environment and also ensures extra costs for heating a home are not born by a resident because of poor insulation. This is a driver of fuel poverty and an extra burden for those households paying more for their fuel — a big issue for those concerned about the Poverty Premium.

For more information on those extra costs, see our roadmap document