how many utility companies do we need???

Pincher

The auction needn't be upfront fee, they can bid a fixed sum and a percentage of profit, or shares in the company, which in itself issues dividend. This actually creates an incentive for the regulator to scrutinise the accounts, as fat cat bonuses reduce the license fee.

The licensing panel obviously need to award licenses based on more than just license fee anyway. There are financial soundness, proper person, technical capability, capacity, business plan, etc.

The important thing is the ability to revoke a license. The auction idea was to get the government interested in it.

BenNevis

Your basic idea sounds great but I feel that if you were the energy minister putting it forward to your ministerial permanent secretary “Sir Humphrey”, he might remark that adopting a policy along those lines would be very “brave” to the point of being “courageous”. He might add comments something on the following lines in red.

Pincher wrote: »

The auction needn't be upfront fee; they can bid a fixed sum and a percentage of profit, or shares in the company, which in itself issues dividend. All this extra money going to the government will mean that energy companies will have to charge the public significantly more. If the public see this as a hidden tax they will blame you Minister.

This actually creates an incentive for the regulator to scrutinise the accounts, as fat cat bonuses reduce the license fee. Ofgem already have a firm of forensic accountants going through this process as we speak.

The licensing panel obviously need to award licenses based on more than just license fee anyway. There are financial soundness, proper person, technical capability, capacity, business plan, etc. Another quango Minister?

The important thing is the ability to revoke a license. The auction idea was to get the government interested in it. Ofgem already has the power to impose fines of up to 10% of turnover. It may even have the power to revoke a licence but that should only be a very last resort that hopefully would never be used in practice.

Pincher

Currently:

1. The utilities fob off customers
2. Ofgem tries very hard not to see customer abuse, so they don't have to do anything.

The tracking system will make it possible for external bodies to see clearly the missed appointments, incompetence and delays, which the suffering customer knows perfectly well, but nobody will listen.
BBC Watchdog will. They just have to publish the number of outstanding complaints, and average resolution time over the last month, quarter and year, which should be showing on the Ofgem website, updated once a month.



Forensic accountants! So regular auditors are just for show, are they? If you say to the auditors: find £10 million in hidden profit, so Ofgem gets £2 million and you get £1 million in audit fees, they will find it in a week. They already know where it's hidden, because their colleague next door hid it in the first place. It's just too obvious to call you back in five minutes with a bill for £1 million.

Hidden tax! This means George Osborne can cancel the 5% VAT on gas and electricity, and get elected as the next prime minister. Take in one hand, Give with the other, love it. Come on, George, you back stabbing tattle teller, this is your chance.

BenNevis

As you have not answered my suggested objections to your idea of a huge energy licence fee I assume you’ve dropped it.;)

On the “Complaints Tracking” front, records are already kept that name and shame the energy companies which have the most complaints. Last time I looked, npower was the worst but that was a while ago. If you centralise every complaint under the wing of a special bureaucracy it will need an entire office block of highly paid staff to administer it. The cost will be huge. It would be better to keep Consumer Focus.

I suspect there is massive difference between a standard audit and a forensic audit, and I suspect that you know that full well despite what you have written.:D

As for the “hidden tax” aspect, are you seriously suggesting that cancelling the 5% VAT is a realistic solution to this snag in your basic idea?

Pincher

Hidden Tax = what you call a huge energy licence fee.
Hence "Take in one hand, Give with the other"

I was just saying George Osborne can cancel the 5% VAT to curry favour with the electorate, which will be an incentive to IMPLEMENT the "huge energy license fee". Not dropping it, just using it as bait so George will bite.

I'm not sure if you have ever used the eBay Dispute Resolution system. The ombudsman doesn't look at ongoing complaints. It's mostly a Recorded Delivery mechanism where the e-mails are simply logged, just like posts on MSE. It's only when the customer has given the seller sufficient time and opportunity to fix the problem, can the customer escalate for arbitration. But when they do escalate, everything is already logged and the ombudsman can make a very quick decision. It takes probably the same amount of computing power as the MSE website.

I think you are talking about a start from scratch Ofgem complaints procedure designed to bog down the customer with the burden of providing reams of documents to prove his case. Only the most persistent customers make it that far.

With my tarcking system, we record speedily and efficiently handled complaints as well. Any one with experience of Service Level Agreements will know about metrics like response time and resolution time. If a company resolves 90% of complaints within two days, you can be sure the customer service function has been given decent resources and mandate to serve their customers.

Forensic accountants? No, It's just a word to make it sound serious. I had a mortgage broker who was always starting an INQUEST into why the lender wasn't responding. All that happened was nobody took any notice of him, including me in the end. The utilities have already reported fat profits, what do you expect to find?

BenNevis

In post 11 you said “….the 3G license auction was a good money spinner for the government”, and yes in fact it did yield around £22.5 billion. If a similar amount was obtained from the energy companies they would of necessity raise their prices to their customers to recover this outlay, and then we would have the public in effect paying a hidden (stealth) tax.

As to how much this would work out per customer, there are around 25 million homes in the UK. For simplicity let’s assume they all have gas and electricity. Then the cost (the stealth tax) works out at £900 per home.:eek:
That is a lot more than the 5% VAT you propose that the government removes. Any thoughts?

As for complaints, I think I am right in saying that energy companies have a set time to resolve a customer complaint failing which the customer can take it to the energy ombudsman (free). I really can’t see what’s wrong with that system.

As for forensic accountants, I don’t blame you for being sceptical but there do seem to be a lot of them about, so clearly they must be gaining a reputation for being effective at finding stuff that escapes the attention of an ordinary auditor. It will be interesting to see what Ofgem’s forensic accountants say when they have finished looking over the books of the energy companies, as to whether we are all being charged too much.:)

Sweey_as_a_nut

Problem is most people have got a memory like a fish.

Who remembers when the Conservatives privatized British Gas and British Electric companies, remember tell Sid, for people to buy shares. All those people who bought the shares expected to get a return for their investment, well that money they received was paid by people who did not buy shares. And so it's gone up and up. As the Conservatives knew those people who bought the shares sold them at a profit, big business bought them knowing that from then on they can up the price bit at a time.

Also no one can now take the 5% off your power bills, once the conservatives introduced VAT on Gas and Electric, remember they put it up to 17.5% and when Labour arrived they put it down as far as they could that's 5% it can't go lower it's to do with the European law.

The Conservatives love the situation we are know in, they can do things they have always wanted to do, privatize the health service is one....Well I could go on, but. Only to say when we switch power providers some of us receive bottles of wine ect who do you think pays for that.

mumbles_one

Pincher wrote: »

In principle, the more the merrier, because the uncompetitive players simply disappear. On the other hand, the 3G license auction was a good money spinner for the government. Why don't we limit the number of licenses, and strike off the worst performing company, whose slot can be auctioned off.
By performance, I don't mean financially.

I really like this idea of having a "football league" type of licensing . It could work and would cost practically nothing to try it. Better to try something new than just complaining and doing nothing. I have tried switching tariffs to get lower bills with no success .

BenNevis

mumbles_one wrote: »

I really like this idea of having a "football league" type of licensing.

How would you decide who are the best and worst performing companies? Price? Customer service?

If companies could lose their licences so easily what makes you think any of them would risk bidding for a licence in the first place?

It could work and would cost practically nothing to try it.

Why would it cost “practically nothing to try it”?

Better to try something new than just complaining and doing nothing.

Ever heard of “out of the frying pan and into the fire”?

I have tried switching tariffs to get lower bills with no success.

So trying something new for the sake of it got you nowhere then?

Surely its not the present system that isn’t working, its Ofgem.:)

mumbles_one

I just watched Ann Robinson on the BBC saying the same old "switching" is all that's needed to control the suppliers. It would work only if everyone leaves one supplier and shuts it down immediately. Why not have a system where the customers can choose on a daily basis who supplies their electricity. I can choose to go to Asda , Tesco , Sainsbury , Waitrose or local high street when I shop and I am not tied in to any contract. Lets get the Supermarkets to run the energy retail market and lets get some competition. The existing suppliers can generate the electricity but not retail it. Then the supermarkets could source from the cheapest supplier and compete against each other on an equal footing.