Government policies are resulting in a Northern Poorhouse says GMB.
GMB, the union for staff in the energy sector, commented on Npower’s announcement that it would cut 2,400 jobs as part of its two year recovery programme. Npower has said that the job losses would come from both directly and indirectly employed staff. See notes to editors for Npower press release on job cuts.
The energy firm, which currently employs 11,500 people, has not yet announced which jobs will be cut, leaving GMB members facing an uncertain future. Employees operate at sites across England including Leeds, Swindon, Solihull and County Durham.
Npower’s recovery programme comes following a £26m fine in December from energy industry regulator Ofgem for sending customers late and inaccurate bills and for its poor handling of customer complaints. European parent company RWE have said that customer issues are likely to continue in 2016.
Eamon O’Hearn, GMB national officer, said “It is disappointing that hard-working members, many of whom have experienced significant disruption and uncertainty over the past 12 months, are set for yet more uncertainty over the next 12.
The company today failed to clarify where any job losses are likely to occur, meaning that members will go home tonight none the wiser.
Our members, in particular those in customer-facing roles, have been instrumental in helping the company turn around the retail business and we believe they deserve to know the full picture as soon as possible.
RWE’s German workforce would not be treated in this manner, and it is fuelling concerns that this announcement was leaked to satisfy city traders without any thought for the impact on the morale of dedicated members.
GMB hopes that this is not the case and believes the company now has an uphill battle to ensure that this perception isn't a reality.
It is clear government policies are resulting in a Northern Poorhouse.”
Notes to editors
Copy of Npower press release dated 8th March 2016
npower to start implementing two year recovery programme
· ·npower will make extensive cost savings to help turn around the significant losses made in 2015 and return the company to profitability.
· 11,500 people currently support npower, either as employees or through partners. This figure would be reduced by 2,400,through a mix of those who work directly and indirectly for npower.
· More effective customer service processes in domestic business.
npower has today announced that it will begin a two year recovery plan. The plan will deliver a robust business built upon four cornerstones - lower costs, simplicity, high quality customer service, and ready for the challenges of the future. As a result of implementing this plan we expect npower to have a reliable financial foundation that consistently produces the right results for shareholders and sustainable customer satisfaction.
npower takes its responsibilities to its employees seriously and will consult fully with affected employees and with unions over its proposals for the future of the business.
The four cornerstones of the recovery plan are:
Lower costs: npower will make extensive cost savings to help turn around the significant losses made in 2015 and return the company to profitability. This will be achieved by streamlining activities across the company, eliminating process failures in its customer service and billing systems, and rationalising the number of systems it uses. This will both improve the efficiency of its day to day operations and eliminate the cost of re-work. As a result, products and services will be delivered better for its customers and with a significantly smaller cost base than today.
npower is currently supported by a total of 11,500 direct and indirect employees and the proposals aim to reduce this by 2,400,through a mix of those who work directly and indirectly for npower.
Keeping it simple: npower is working on ways to simplify its business. The Company will remain focused on supplying energy to both domestic and business customers but will look to reduce, and in some cases stop, some of its energy services activities. To In order to provide customers with the services they need, it will look to work with external delivery partners. It will also continue the property consolidation programme started in 2013 to reduce its current 26 sites so that locations are grouped around three regional hubs.
Better service in its domestic business: npower has begun to put in place a number of key measures that will improve its ability to produce accurate and on time bills, and to deliver high quality service to its customers. A major set of improvements was made to the billing system last month. Steps are being taken to make it easier for advisors to serve customers well, for example by reducing the numbers of different screens they need to use. Key service processes are also being overhauled, including the home move process. Taken together, these will lead in time to a significantly improved customer experience with fewer complaints and lower costs as the need for rework and complaints handing decreases. These measures will also ensure that the performance targets agreed with the industry regulator Ofgem in December 2015 (1) are met, and in due course exceeded.
Signs of improvement are already being seen. In 2015, the company halved the rate of domestic complaints received per 100,000 customers, with 50% of this reduction coming in the last quarter alone. As Ofgem noted in December (2), in the last quarter of 2015, this put npower at number three among the large energy suppliers for complaints received per 100,000 customers - better than the industry average. By the end of January the reduction was greater still, with 75% fewer complaints being received than in January 2015 (3).
Ready for the future: The npower recovery programme is not only designed to improve its current customer and financial performance, but also to take advantage of future opportunities in the ever-changing energy market. In addition to preparing our business for delivering the benefit of the national Smart meter roll out, it will continue to invest in digital technology to make it easier for our customers to do business with us. Later this year npower will begin to roll out Britain’s first fully digital energy supplier ‘Powershop’. Powershop is a unique market offering that gives customers more control over how they buy their energy than ever before.