Energy firms face stricter tests after collapses

Energy companies will face more robust financial checks from January after a host of companies failed owing to a wholesale price surge, the regulator Ofgem has announced.

Bosses of firms will also undergo more stringent vetting.

More than 20, mostly small, suppliers have collapsed following a spike in wholesale gas prices.

Nearly four million other households have seen their supplier fail since the start of the pandemic.

The regulator also said it was consulting on the future set up of the energy price cap, designed to protect customers who have not switched. It has been pointed to as part of the problem by some failed companies.

"I am setting out clear action so that we have robust stress testing for suppliers so they can't pass inappropriate risk to consumers," said Ofgem chief executive Jonathan Brearley.

"I want to see more checks on staff in significant roles, and better use of data to help us regulate. We need a regime that can enable a sustainable market, to promote our transition to net zero.

"Our priority has been, and will always be, to act in the best interests of energy consumers. The months ahead will be difficult for many, and we are working with the government and energy companies to mitigate the impact as much as we can, particularly for the most vulnerable households."