Care England has called on Ofgem to take immediate action to protect care homes from hidden energy costs.

The care home provider body was among eight leading associations to sign an open letter to the energy watchdog, which organised by not-for-profit energy consultancy Box Power CIC, highlighting how their members were being taken advantage of by unscrupulous brokers.

In one example, the energy consultancy found a commission fee of £12,000 had been easily applied to a £49,000 contract for one of 16 care homes operated by a provider for up to 1,200 residents.

While legislation for greater transparency has already been introduced for very small businesses, who are known as micro-businesses, under Supplier Licence Conditions, Box Power CIC and the other signatories said the regulator has ‘abandoned’ other firms and organisations.

The letter states: “We do not agree that larger businesses are able to look after their own interests, that just because this is a long-standing arrangement that it should continue or that Ofgem are best placed looking at issues affecting microbusinesses only.” 

Corin Dalby, chief executive of Box Power CIC, vowed to bypass Ofgem and seek help from the government if the regulator fails to act.

“For there to be trust, there must be transparency,” he said. “They [the signatories] shouldn’t have to argue for support from the organisation created to protect all consumers. Rogue brokers are adding excessive commissions and all the while it is the end user who is paying for it.

“Transparency should be a given, so whatever the level of commission the business is fully aware and in agreement.

“Not only that but now businesses are incurring even higher energy prices, some brokers are adding even higher fees because they think they can get away with it.  This is an extra burden on businesses at exactly the point they can least afford it. We refuse to stand by and allow this to continue and will do all we can to ensure this is brought to a stop.”

An Ofgem spokesperson said: “We have listened loud and clear to calls to protect businesses of all sizes from sharp practice by energy brokers. We acknowledge their strong arguments about creating a level playing field with protections we’ve put in place for microbusinesses. 

“We have finalised the most detailed ever review of the national non-domestic energy market, covering the private and public and third sectors.

“We are setting out a comprehensive package this week tackling poor behaviour by energy suppliers toward exactly the customers who underpin our economy and society. This will include immediate actions we can take within our existing rules and where we might need stronger powers.”