LONDON, April 30, 2026, 13:01 BST
- Britain is moving to hand Ofgem new consumer-law enforcement powers, plus the ability to block bonuses for energy executives found violating regulations.
- These adjustments are arriving at a time when household bills are still a hot political issue—the energy price cap sits at £1,641 per year for an average dual-fuel direct-debit customer.
- Industry groups say the review doesn’t fully address concerns about Ofgem’s culture, pace, or when legislation might actually land.
The UK government is moving forward with a sweeping revamp of Ofgem, aiming to hand the energy regulator the authority to enforce consumer law itself and stop executives from picking up bonuses if their companies break the rules. It’s the most significant shake-up of Ofgem’s remit since its 2000 inception. Officials hope the final plan can restore trust after the regulator was slammed for slow action during the energy price surge.
Timing is key here. Even with the price cap dropping 7% for April-June, UK households remain on the hook for hefty bills. The cap, which governs default-tariff unit rates and standing charges, now puts a typical direct-debit dual-fuel customer’s annual cost at £1,641, according to Ofgem.
Ministers are pressing the regulator to keep pace as the market grows more complex. What was once mainly about supply has become a web—solar panels, battery storage, smart meters, heat pumps, EV charging, finance products—all now in the mix. Those additions have opened up gaps for customers dealing with companies that fall outside the old gas and power licenses.
The review puts the government in charge of defining the strategic “what” via a new Strategy and Policy Statement tailored for Ofgem—a document laying out the regulator’s marching orders. Ofgem figures out the “how,” coordinating with the Department for Energy Security and Net Zero and the National Energy System Operator to sort out overlapping responsibilities. Gov
Ofgem’s major shift centers on direct consumer law enforcement—so, the regulator could move against companies mistreating customers without first heading to court. The overhaul also includes putting more responsibility on top executives, expanding the authority to freeze or recover bonuses, and extending the regulator’s reach to parent or group companies if their actions lead to rule-breaking by a regulated unit.
Energy Secretary Ed Miliband described the bonus steps as “tough and fair.” Martin McCluskey, who serves as minister for energy consumers, put it this way: the goal is “customers are put first.” Gov
Ofgem interim chief Tim Jarvis said the regulator is facing a fast-evolving energy landscape in Great Britain and “needs to be able to keep pace.” Jarvis said the review aims to foster a “stable, reliable environment” for market players. Ofgem
Consumer groups largely backed the move, though with caveats. Gillian Cooper, director of energy at Citizens Advice, pressed Ofgem to impose “real consequences for falling short” on suppliers. She also flagged the need for better advice, stronger advocacy, and quicker dispute resolution for customers. Gov
The changes would align Ofgem more closely with other UK regulators. According to CMS, the draft enforcement toolkit echoes updates seen at the Competition and Markets Authority and the Financial Conduct Authority. The proposed pay clawback takes its lead from Ofwat’s authority over water sector execs, but, CMS noted, the plan doesn’t go as far as a full senior managers regime like the FCA operates.
Industry skepticism lingers over the package’s reach. Dhara Vyas, chief executive at Energy UK, said the review “falls short of the radical reform” required, and pointed to Ofgem’s use of its existing powers as the real issue—not a lack of authority. Energy UK
That’s the central risk here. Most major powers need primary legislation, but the government has just committed to legislating “when parliamentary time allows.” The final report calls for Ofgem to release progress updates at the 12- and 24-month marks. Gov
Inside government, responsibilities are shifting too. Oversight for home-upgrade programs—covering things like rooftop solar, energy storage, and heat pumps—would move from Ofgem to the forthcoming Warm Homes Agency. Ofgem’s brief would narrow to economic regulation and protecting consumers.
For those paying the bills, this doesn’t mean immediate relief. The current price is still capped, tied to wholesale prices, network charges, and policy fees. Ofgem’s review is focused on speeding up penalties for misconduct, making compensation reach customers faster, and encouraging investment—all while making sure costs don’t outpace what consumers can bear.
