Ready for the future: why statutory advocacy and advice services need to be extended to the flexibility sector

The way we use and pay for energy is changing. To help balance the grid, more consumers will need to adjust when they use electricity — what the government calls ‘consumer-led flexibility’.

This could involve more consumers using smart time-of-use tariffs, where prices vary by the time of day. Or it could involve other products and services that reward households for shifting demand — for example, running appliances when there is plenty of renewable energy on the grid. Done well, consumer-led flexibility could offer real benefits: households can save money, and the system as a whole becomes cheaper and greener. But for this vision to work, consumers must be willing and able to engage.

As the statutory advocate for energy consumers, Citizens Advice welcomed the government’s recent consultation on a framework to increase engagement with consumer-led flexibility. They’re looking at a range of measures, including communications and advice functions for consumers.

To achieve increased consumer engagement with consumer-led flexibility, we think the government should extend statutory advocacy and advice to cover flexibility services. This would help by:

• building consumer confidence — helping people feel safe and empowered to try new flexible products and services
• providing high-quality support — ensuring advice is joined-up and easy to access so people can get the advice they need, when they need it rather than fragmented journeys from different services
• closing protection gaps — identifying and addressing emerging risks in consumer safeguards promptly

The role of the statutory advocate in the energy system

Citizens Advice is the statutory advocate and advice provider for energy consumers. That means 2 things. First, we deliver free, independent advice and information through the Consumer Service. Every energy bill and supplier website points people towards this service. Where consumers face particularly complex problems or vulnerability, we have referral routes to an Extra Help Unit for specialist casework.

Second, we use insights gathered from this advice work to represent consumers’ interests at the heart of the energy system, providing evidence to Ofgem and to the government. This real-time data helps us highlight the problems people are facing and push for policy changes that will make the biggest difference to consumers.

This model of statutory advocacy has been essential in the retail energy market, particularly during the cost-of-living crisis, where our work helped to bring about a ban on suppliers installing prepayment meters in vulnerable households. It will be just as essential as flexibility becomes a more mainstream part of how people use energy. Without statutory advice and advocacy to cover flexibility providers, the government risks leaving consumers under-protected in a market that is central to net zero.

Building consumer confidence

Consumer confidence will be key to the uptake of consumer-led flexibility. Right now, there are barriers to take-up: low levels of trust in the market, patchy smart meter performance, poor data sharing infrastructure and uncertainty around whether new products will actually deliver good outcomes.

Regulatory change is part of the answer. The introduction of a consumer duty in the supply licence and load control licence would give consumers the confidence that suppliers and flexibility service providers are focused on achieving positive consumer outcomes.

But consumers will also need accessible, impartial advice. Expanding the statutory advice service to cover flexibility would provide a single ‘front door’ for people who want to know what’s available, what’s safe, and what’s right for their circumstances. Because flexibility is so closely linked with affordability, choosing the right tariff, home upgrades and using new technologies, people will need advice which joins up these issues rather than treats them in isolation. Much of this overlaps with the existing remit of the statutory service.

Providing high quality support

Extending statutory advice and advocacy to cover flexibility services is the most efficient way to deliver an advice and information service without establishing a new organisation. Consumers already have a trusted route for advice on energy supply through the Consumer Service, and this has now been extended to heat network customers.

Setting up a separate, stand-alone service for flexibility would duplicate what already exists. It would risk confusing consumers, who may not know which service to contact depending on the type of company they’re dealing with. It would also be more expensive for the government, given creating new services is almost always more expensive than building on existing ones.

Citizens Advice already has referral arrangements with energy suppliers, Ombudsmans and Trading Standards. Increasing the scope of the service could utilise existing referral mechanisms to deliver a joined-up service that’s easier for consumers and more cost-effective for the government than reinventing the wheel.

Closing protection gaps

There’s an added risk in the flexibility market that protection gaps may emerge if statutory advice and advocacy does not cover flexibility service providers. Where flexibility services may be considered ‘optional’ in a way that basic supply is not, the interaction between the two can create real risks — particularly for vulnerable groups. A household with limited digital skills might find themselves locked into automated controls they don’t fully understand, with little ability to override them. Others might be exposed to unexpected costs if they adopt a product or service without clear advice on how it works.

Statutory advocacy acts as an early warning system. Because Citizens Advice has a direct view of the problems people face, we’re also able to spot emerging patterns of harm and raise them quickly with regulators and government. If flexibility develops without that safeguard, harmful practices could go unchecked.

Extending the statutory advice framework would ensure that all consumers, whether engaging with a supplier or a new type of service provider, have access to the same level of protection and advocacy.

Consumer-led flexibility will only deliver on its potential if consumers feel protected and empowered. Expanding statutory advocacy and advice will help to give consumers the confidence to engage, avoid duplication of services, and prevent protection gaps. The government should invest early in advice and advocacy to futureproof the market and instil confidence in consumers as the flexibility market grows.

To read our full response to the government’s consultation on consumer engagement with consumer-led flexibility, click here.