On 10 June 2026, the National Audit Office (NAO) published a report examining the work carried out by Ofwat, Ofgem and Ofcom to ensure that residential water, energy and broadband customers of receive good consumer outcomes. The NAO particularly focussed on the experiences of vulnerable customers in these sectors. Given NAO scrutiny is important to public bodies, this work provides useful insight into what to expect in these sectors and more broadly – for example in relation to enforcement by the CMA and in other sectors such as financial services. 

What are the key findings of the NAO report?

The report notes the actions taken by regulators to strengthen consumer protections following a NAO report published in 2019. This includes, for example, the introduction of the ‘customer focused licence condition’ (Condition G) by Ofwat and licence conditions implemented by Ofgem to facilitate communications between consumers and their energy supplier. The NAO considers however that several persistent (and in some cases growing) issues remain. These include:

• Rising consumer debt – £7.2 billon total debt owed by customer to energy and water companies as of March 2025.
• Limited awareness of available support – only 34 percent of eligible broadband customers and 39 percent of water customers were aware of social tariffs and whilst energy and water Priority Service Registers (PSR) are growing, many eligible customers are not registered.
• Communication barriers – vulnerable customers face additional barriers in accessing services, understanding bills or contacting companies and whilst PSRs are required under water and energy licence conditions, companies have failed to provide consistency in registration and identification of these consumers.
• Lack of consumer satisfaction – particularly among vulnerable consumers, with financially vulnerable broadband customers reporting satisfaction 4 percentage points lower than the 2024 average and vulnerable energy consumers reporting satisfaction 10 percentage points lower than energy customers overall. Customers who are identified for support, through inclusion on the relevant PSRs, report higher satisfaction.
• Lack of outcome-based performance metrics – none of the regulators have aligned their own performance measurement with consumers’ actual experience and outcomes, carrying the risk that regulators judge themselves by activity, rather than whether consumer outcomes improve.
• Weak complaints signposting – regulators are failing to point consumers to the correct complaints body, with only 55 percent of eligible energy complaints being correctly sent to the Energy Ombudsman in 2025. 

Recommendations and forward look

The report sets out that, subject to some exceptions, each regulator must in the next six months outline how it intends to implement recommendations, in the following categories:

1. customer experience and communication, including ensuring that consumers are being effectively signposted to the relevant ombudsman in the event of an unresolved complaint;
2. responding to challenges for consumers in financially vulnerable circumstances, including raising awareness of social tariffs;
3. addressing communication barriers, by introducing consistent customer registration; and
4. aligning performance with customer outcomes. 

The report notes the current period of change in water and energy regulation, and expects that the recommendations made in the report be carried forward into any new regulatory regime. 

Reflections

The report notes examples of formal enforcement investigations taken forwards by each regulator. Many of these are well-publicised and involve headline grabbing financial penalties and settlements which have been said to be motivated to protect consumers. 

Clearly robust enforcement action is an important part of a regulator’s toolkit in any sector. However, the NAO’s observations about the lack of outcome-based performance metrics for regulators are telling and provide a useful lens through which to examine the value of enforcement action.

Penalty levels do not correlate to delivering positive consumer outcomes: bigger penalties are not necessarily better. This is particularly the case in light of unclear rules and standards, and the complex challenges faced by companies in many regulated sectors. Only time will tell whether the NAO’s report leads to a rethink among regulator’s priorities to focus more closely on outcomes rather than those headlines.