The UK’s energy companies are advocating for significant changes to the regulator Ofgem, citing concerns over rising domestic energy bills and the potential impact on economic growth. The industry trade association, Energy UK, argues that Ofgem has imposed excessive regulatory burdens, which they claim have hindered growth and increased costs for households.
A recent report from Energy UK highlights that while the government aims to reduce regulatory costs by 25% by the end of its current parliamentary session, Ofgem’s staffing has grown by 120% over the past decade, with its budget increasing by 200%. In contrast, the workforce within the energy sector has only expanded by 8% during the same timeframe. Ofgem serves as the energy regulator for Great Britain.
This critique of Ofgem coincides with rising dissatisfaction regarding the government’s energy policies. It follows statements from sector leaders to Members of Parliament that indicate significant increases in gas and electricity bills may occur by the end of the decade. Energy UK proposes that the government limit Ofgem’s responsibilities and transfer consumer protection duties to the Competition and Markets Authority (CMA), as well as delegating energy scheme delivery to other entities.
The push for reform of Ofgem has intensified after the government announced plans to create a new water regulator, aiming to address issues such as cost increases and pollution in that sector. A review of Ofgem’s role, initiated by Energy Secretary Ed Miliband in December, is expected to produce recommendations soon.
In response to these developments, an Ofgem spokesperson affirmed the organization’s commitment to collaborating with the industry, emphasizing the need to balance reducing regulatory burdens with maintaining consumer protection and sector confidence.
Source: https://www.theguardian.com/business/2025/oct/22/uk-energy-firms-call-for-regulator-ofgem-to-be-overhauled