Helping residents navigate the perfect storm

Housing providers are doing all they can to protect their residents from financial hardship, particularly those deemed most at risk. But as energy prices remain high and the cost-of-living continues to soar, many are experiencing a perfect storm of unprecedented difficulties. For those who already had their incomes negatively impacted by the pandemic, things are even harder, and harder still for heat network residents who remain unprotected by the energy price cap offered to other residents under the Energy Prices Guarantee. Ofgem and Heat Trust define customers in vulnerable situations as anyone “significantly less able to protect themselves or their interests in the energy market and/or significantly more likely to suffer detriment than a typical heat customer.” What could be regarded as ‘typical’ is changing, and more people than ever are susceptible to falling into debt and less able to recover from it. Given the numbers of residents affected, measures such as emergency can no longer provide the same level of relief as they did before. As more residents fall into arrears, housing providers are absorbing the increasing costs of unpaid energy bills. But cash reserves are increasingly exhausted, while people’s money struggles are still multiplying. On top of this, many preferential fixed-rate wholesale energy tariffs have either finished or are nearing their end. This brings the prospect of massive price increases when these commercial contracts will be renegotiated. The picture looks bleak. Debt is an increasing concern for housing associations, which typically cater for a higher proportion of vulnerable households than an expected 5% of each scheme. This is evident when comparing two similar heat network sites for which Insite Energy provides metering and billing: one housing association, and one privately-owned scheme. The housing association scheme currently has nearly four times as much debt as the private development. The debt for the private scheme is consistent year-on-year and is largely explained by residents simply forgetting to organise payments. The housing association residents, meanwhile, simply cannot afford to pay. Technology troubles The challenges don’t stop with residents’ ability to pay today’s energy prices. Many developments with older, less effective technology are facing a host of problems: Old-style credit billing methods leave residents with no way of tracking how much energy they’re consuming day-to-day. Energy bills and maintenance costs are being pushed even higher by underperformance caused by decrepit and inefficient heating systems. Outdated customer contact systems are making it hard for people to get in touch when needed. While paying for system upgrades is likely to be far down the list of priorities in the face of an ever-increasing debt burden, doing so can help to alleviate costs in the long run. For example, while PAYG heat metering has historically been viewed with caution, its potential to help drive down consumption and debt, as residents can access real-time information about their energy consumption, makes it an increasingly popular solution. Mental-health impact Inevitably, the stress of being unable to pay bills is taking a toll on residents. Since the pandemic began, and throughout the energy crisis which has followed, our customer service team has seen a sharp rise in people with mental health problems among those raising concerns about their energy bill. Anxiety over being able to pay bills can lead to people experiencing more mental health issues and more anxiety. To help alleviate this, we’ve been working closely with clients to draft responses to both their affected residents and the debt-advisory services they use, to address these issues. Tackling vulnerability We follow the Heat Trust’s best practice guidance, which requires registered participants to hold a Priority Services Register (PSR) and offer certain additional services to those customers identified. Over the past three years, that has included extended emergency credit limits, and flexibility around timeframes for how long repayments can take. In every case, it’s important to communicate with both the housing provider and the resident concerned to determine the most appropriate solutions. In doing so, we aim to alleviate the anxiety vulnerable residents are feeling, while still ensuring clients won’t need to keep swallowing costs. Showing support When times are hard for customers, high quality support is imperative. As a metering and billing service provider, we have no control over energy prices. However, we’re doing all we can to provide a sympathetic, well-informed, and accessible listening ear when people reach out to us for help. We do everything we can to make it easy and quick for people to reach us by offering multiple contact routes, and maintaining exceptionally long opening hours. We also regularly attend resident meetings in person to hear people’s concerns and show visible support. There are no simple answers to the energy and cost-of-living crisis, and we are still a long way from the light at the end of the tunnel. Proactive preventative action and open communication will be key to helping residents through the difficult times ahead, particularly when it comes to the most vulnerable. Byline: Anthony Coates-Smith, Managing Director of heat network metering and billing specialist, Insite Energy

Helping residents navigate the perfect storm

Given the numbers of residents affected, measures such as emergency can no longer provide the same level of relief as they did before

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