Ofgem is forced to pay consultants millions of pounds to solve the collapse of gas and electricity providers after households had to pay a £3bn bill when companies went bankrupt.
- The regulator has spent £32m on consultants since 31 companies collapsed last year
- Contracts have been awarded to consultancies such as Baringa and KPMG
The UK energy regulator is being forced to pay consultants millions of pounds to help clear up the mess left behind by the collapse of gas and electricity providers.
Domestic customers had to pay a bill of almost £3bn when 31 companies went bankrupt during 2021 and 2022, through a levy added to all bills.
Since the start of the crisis, Ofgem has spent £32m on consultants, according to Tussell, a firm that tracks government contracts.
Baringa recently secured a six-month deal worth £330,000 to help with provider of last resort (SoLR) payments, costs incurred by providers who step in when another company goes bankrupt.
The regulator has awarded at least 13 other contracts, including KPMG, which earned nearly £2.5m for five contracts.
Since the start of the crisis, Ofgem has spent £32m on consultants, according to Tussell, a firm that tracks government contracts.
These SoLR claims will total around £2.7bn, the National Audit Office said. The cost of the failure of Bulb, the largest of the bankrupt power providers, is still unclear and will add to that.
An executive from a large energy company told The Mail On Sunday: “Ofgem clearly do not have the staff to sort out the mess they have created.”
An Ofgem spokesman said: ‘The scale of the gas crisis meant Ofgem (needed) to bring in experts quickly. Hiring external experts has allowed us to add skills for a limited period.’
