The public spending watchdog has questioned the effectiveness of regulators which have a statutory duty to protect consumers’ interests.

The National Audit Office (NAO) said its examination of the four major regulators – those covering the water, energy, telecommunications and financial services sectors – showed they understood “significant difficulties” facing customers but could not show their work was making a real difference.

Its report said the most common consumer problem facing Ofwat, Ofgem, Ofcom and the Financial Conduct Authority (FCA) was handling debt from bills and credit repayments.

The study highlighted real-term price increases of 28% in gas and 37% in electricity since 2007.

Other issues, the NAO said, included the UK’s £4.1bn so-called ‘loyalty penalty’ facing customers who fail to switch providers for key services including household energy and mobile phones.

It noted 15% of broadband customers still had reason to complain about their service last year.

Action taken in support of consumers by the four in recent times has included Ofgem’s cap on standard variable tariffs and a review of broadband pricing by Ofcom.

:: Energy price cap ‘unravels’ as £117 added to bills

The FCA is targeting overdraft fees charged by banks.

The report said: “The four regulators have developed a good understanding of these consumer issues through their own research, insight and working with stakeholders.

“However, government, parliament and other stakeholders have expressed concerns about whether these sectors are working as well as they can for consumers, raising questions about the effectiveness of the regulators.”

The NAO said the four must do more to measure their performance and demonstrate concrete results, recommending a common set of standards and greater co-operation in areas such as affordability and problem debt.

NAO head Amyas Morse said: “I understand that there is a difficult balance to be struck between long and short-term outcomes, between the needs of businesses and the interests of consumers, but at present the regulators’ results can come across as somewhat academic and detached from people’s practical concerns and pressures.”

An Ofgem spokesman responded: “We agree with the NAO that regulators need to effectively measure their impact to help deliver the best possible outcomes for consumers.

“Ofgem has already made progress in this area; last year, for example, we published our first Consumer Impact Report measuring how much our regulatory decisions were expected to benefit consumers and we also publish annual reports on the state of the energy market and on the situation of vulnerable consumers.”

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