The financial performance for 2023-24 marked a significant milestone, reflecting our first full year of delivering the complete suite of Retail Energy Code (REC) services. Our 2023-24 budget was carefully designed to balance addressing immediate challenges and preparing for future needs as outlined in our approved strategy.
Following the statutory audit of our 2023-24 results, which concluded with a clean audit, we are pleased to announce a £9.8 million rebate. This rebate will be applied as a reduction to the invoices issued to funding parties in October 2024. The rebate underscores our commitment to financial responsibility, efficiency, and returning value to stakeholders.
The underspend results from diligent financial management, strategic project phasing, and effective oversight of service providers.
Key drivers of the underspend
- Change allowance management and prioritisation: £2.5m savings.
- Efficient procurement and service delivery for the MHHS programme: £1.3m savings.
- Non-utilisation of contingency allowance: £1.1m savings.
- Deferral and reprioritisation of non-urgent projects: £1.1m savings.
- Ensuring all non-REC parties using REC services were billed appropriately: £1.0m savings.
- Recovery of service credits through strong service provider management: £450k savings.
- Cost savings through specialist resource management: £400k savings.
- Aligning recruitment with the maturity of REC services and the organisation: £400k savings.
- Active credit control, minimising bad debts: £160k savings.
Use of contingency allowance
Despite these savings, we did utilise a portion of the contingency allowance in response to new regulatory requirements. This included implementing the new REC obligation to introduce Tariff Levelisation alongside developing and deploying the Reconciliation Operator scheme. Additionally, the contingency allowance supported an assessment of Ofgem’s proposal to transfer Central Registration Service (CRS) responsibility to RECCo.
Commitment to transparency
In May 2024, we reaffirmed our commitment to enhancing transparency in our budget process as part of a broader initiative to improve stakeholder communications. As part of this commitment, we promised to reduce charges when we foresee an underspend, and we are pleased to put this into practice with the rebate scheduled for October 2024.
Contact us
If you have any questions on the above, please do not hesitate to contact Brian O’Shea: brian@retailenergycode.co.uk
