Committee publication · Estimate memoranda · 29 April 2026
Ofgem Main Estimate Memorandum 2026-27
Summary
Ofgem's Main Estimate for 2026-27 requests £13.8 million in net Resource DEL and £16.5 million in Capital DEL. Resource spending fell 71% from the previous year's supplementary estimate, primarily due to £30 million in legal provisions not recurring. Capital DEL rose 228% to fund a potential lease event under IFRS 16. Net budgets remain unchanged from the Spending Review settlement.
Key findings
- Resource DEL net spending of £13.8m represents a £33.7m (71%) reduction from 2025-26 supplementary estimate, driven mainly by non-recurring £30m legal provision
- Capital DEL increased by £11.5m (228%) to £16.5m to support lease capitalisation under IFRS 16, with final terms expected summer 2026
- Green Gas Support Scheme expenditure expected to increase to £91.0m but fully offset by higher Green Levy income; scheme is demand-led
- Administration costs totalled £13.8m, down £25.8m from 2025-26 final budget but up £5.0m from 2025-26 main estimate due to depreciation funding
- Depreciation charge of £21.3m reflects increased amortisation of intangible assets and higher lease depreciation charges
Tone
ProceduralTopics
public-financeenergy-regulationnet-zero
Key actors
Gas and Electricity Markets Authority, Ofgem, Department for Energy Security and Net Zero, Tim Jarvis, HM Treasury
Notable line
“Ofgem's principal objective is to protect the interests of existing and future consumers.”
Key Quotes
“Ofgem's principal objective is to protect the interests of existing and future consumers.”
“Resource DEL has reduced by £33.7 million compared with the 2025 – 26 Supplementary Estimate.”
“Capital DEL has increased by £11.5m compared with last year, reflecting funding agreed at Spending Review 2025 to support potential lease event which will require capitalisation in line with IFRS”
“A key component of Ofgem's strategy is constantly reviewing and prioritising work. This ensures that resources are deployed on activities that are most closely aligned to the Forward Work Programme and supports strategic objectives.”
Source · parliament.uk record ↗