Watchdog that let energy bills soar blasted for £1.7m staff bonus spree
A WATCHDOG which has landed 15 million energy customers with price rises has rewarded hundreds of staff with “huge” bonuses.
Energy giant E.ON yesterday became the first supplier to announce it was imposing an inflation-busting 10 per cent price hike in April.
The leap – adding an average £117 a year – comes days after under-fire Ofgem, whose job it is to protect customers, increased price caps on energy bills after bowing to industry pressure.
Yet while households are reeling, it has emerged the tax-funded regulator has dished out £1.7million in staff bonuses since 2017 alone.
Between last April and the end of December Ofgem, whose boss earns more than the Prime Minister, paid a total of £867,285 in bonuses to 565 civil servants.
While payouts averaged £1,535 each, three got at least £15,000, according to figures gained from a Freedom of Information request.
Disarray
They came on top of the £842,170 in bonuses Ofgem paid to 722 workers in the past financial year.
Since 2010 the regulator, which employed about 800 staff last year, has dished out some £7million in bonuses.
Ofgem refused to reveal the criteria for the awards.
Rebecca Long-Bailey, the shadow business secretary, said: “With the energy supply market in disarray, and households facing a huge bill hike just months after the price cap came into effect, Ofgem has questions to answer over the timing and appropriateness of these bonuses.”
John O’Connell, chief executive of the TaxPayers’ Alliance, said: “It’s really not acceptable to be dishing out taxpayers’ money for huge bonuses while the watchdog has overseen some woefully ineffective policies. Bonuses should be a reward for success, not failure.”
Ofgem has been criticised for many years for failing to rein in greedy energy giants.
The regulator last week blamed soaring wholesale energy prices and policy costs for announcing a rise in its price cap for 11 million households on already costly standard variable tariffs.
It also upped the limit for four million customers on pre-payment meters, including many poor and vulnerable households, from April 1.
Other suppliers are expected to use the changes to jack up prices, adding £1.3billion to bills.
Ofgem’s announcement came just a month after a cap on standard variable tariffs came in.
The watchdog is headed by chief executive Dermot Nolan, who earned between £230,000 and £235,000 in the past financial year. That was down on the £240,000 to £245,000 he earned the previous year, which included an up to £20,000 bonus.
Conned
Theresa May, in comparison, is on a salary of just over £150,000 a year.
Ofgem’s former chairman, David Gray, earned up to £165,000 last year.
The regulator has been criticised for sanctioning a price rise while failing to get enough households to switch to cheaper energy deals.
Richard Neudegg, head of regulation at price comparison website uSwitch, said: “People will be forgiven for feeling they’ve been completely and utterly conned.”
An E.ON spokesperson said: “Ofgem’s energy market price cap review set out that price cap levels would increase, driven by rising wholesale and other costs.
“In line with that, we’ll be making changes to our standard variable tariff prices from April 1 and expect to see similar movements across the energy industry.”
Peter Earl, head of energy at Comparethemarket.com, said: “For the past few years, consumers were hit by price increases with concerning regularity.
“It seems the only change is that now the hikes are sanctioned by the energy regulator.”
Ofgem said all pay awards “are set in line with Cabinet Office guidance”.
It also claimed to have a “strong record on consumer protection which includes levying fines and redress on energy companies of more than £185million in the last five years”.
It continued: “Nobody at Ofgem can give themselves a bonus and pay awards.
“All of Ofgem’s senior management team are set by independent non-executive members of Ofgem’s board.”
‘Huge bonuses are not acceptable while Ofgem has overseen woefully ineffective policies’