OFGEM Restructuring Requires Engagement Alteration

On 11 July 2019 Ofgem published its strategic narrative for 2019-2023. In this document Ofgem reiterated its commitment to competition and consumers. However, it also signposted a change in the way it would operate going forward. The energy industry has to be mindful of these changes and have a strategy for addressing them. If it fails to do so it may be caught flatfooted by future regulatory changes, without knowing who to express its concerns to.

OFGEM is changing the way it works

Ofgem is proposing to fundamentally shift the way in which it is organised. This may require the sector having to shift its method of interacting with the regulator. In its strategic plan Ofgem states that ‘Ofgem has traditionally worked like many other bureaucracies, with a hierarchical structure, formal lines of authority, and a fairly rigid division of labour among people with expert training in their fields…This traditional way of working can lead to inefficiencies, a slower response to changing business and industry needs and a less stimulating working environment for staff.’[1] It advocates ‘a more agile way of working, which is more project-based and less durable in structure, with teams forming and reforming more often.’[2]

Established lines of communication may need to change

With a new organisational make up, which focuses on Ofgem concentrating resource as required, industry may find it needs to be more nimble to identify relevant stakeholders. If Ofgem delivers on its commitment to ‘operate in a more decentralised way and with more autonomy, sharing knowledge and joint internal decision-making,’[3] then industry may need to get used to engaging with wider webs of influence within Ofgem. Only by doing so will it be able to keep aware of who it needs to know to ensure policymaking is properly informed. Should Ofgem change to the extent that decision making power becomes both more diffuse and circumstance dependent, businesses will need to maintain high levels of engagement to know they are dealing with the right person.

Engagement is needed now to get ahead of the game

Ofgem is planning to publish further detail on its change plan.[4] Industry would be well advised to engage while that process is ongoing to ensure it understands what is coming and when. At the very least, doing so will help businesses remain equipped to address regulatory risks that surface now and in future. Without engaging companies could be leaving themselves vulnerable, as well as unaware of who to turn to in the event of adverse circumstances.

Brevia Consulting provides straightforward political advice and support to business and organisations.

Discover how Brevia can help you and your organisation by contacting the Brevia Energy Team on 020 7091 1650 or contact@brevia.co.uk


[1] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

[2] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

[3] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.25, link

[4] Ofgem, Our strategic narrative for 2019-23, 11 July 2019, p.8, link

LATEST NEWS

Energy

What the Energy Security Strategy tells us about the Government’s current priorities

After several weeks of reported delays, disagreements and leaks, the Government has finally published its Energy Security Strategy. Crucially, the Strategy provides us with an insight into the main influences and influencers of this Government. With the next general election a mere two years away, the Prime Minister appears to be moving away from the climate focus seen at COP26. Instead focusing on internal party politics and maintaining support within the Conservative . Below, Brevia has unpacked some of the telling signs of what is currently influencing Government direction on energy policy.

Read More »
Brevia

Russia’s invasion of Ukraine will impact UK energy policy

The Russian invasion of Ukraine has changed the world. The ways it has done so are yet to be fully understood. Many of our post Cold War assumptions have been upended: Germany has abandoned its longstanding policy of maintaining a limited armed forces to commit €100 billion to defence spending; Switzerland has departed from its historical neutrality to apply sanctions to Russia; Finland is now openly discussing NATO membership and things we had assumed would never happen continue to do so on a daily basis. Set against the human tragedy that is unfolding in Ukraine, these events can seem small or insignificant in comparison. Nonetheless, they are likely to have enduring consequences for everyone in Europe. Particularly when it comes to how Europe, including the UK, powers itself.

Read More »
General

What did the White Paper tell us about the Levelling Up Agenda?

Last week, the Government published its long-awaited Levelling Up White Paper. The White Paper goes some way to answering the vexed question of ‘What is levelling up?’, by setting out twelve missions the Government hopes to accomplish by 2030. In addition, the Paper sets out a framework for extending devolution in England which could increase the transparency of the process. However, new funding commitments are thin on the ground, and critics suggest the Government has not provided enough money for Levelling Up to succeed.

Read More »
  • Get in touch to arrange your free monitoring trial.