Committee publication · Estimate memoranda · 11 February 2026
Ofgem Supplementary Estimate Memorandum 2025-26
Summary
Ofgem's supplementary estimate for 2025-26 requests £47.5m in net Resource spending and £5.1m in Capital spending. The increase of £24.8m (109%) from the Main Estimate is primarily driven by a £30m legal provision for uncertain future costs from 2025-26 decisions, partially offset by £6m additional income from the Green Gas Levy. Capital spending rose by £0.8m due to increased estates and IFRS16 costs.
Key findings
- Resource DEL increased by £24.8m (109%) since Main Estimate, primarily due to £30m legal provision for potential future costs with uncertain timing and amounts
- Green Gas Levy income increased by £6m, partially offsetting the legal provision cost increase
- Capital DEL increased by £0.8m due to estates and IFRS16 cost increases
- Administration costs rose by £30.8m (352%) largely reflecting the legal provision for future costs
- Corporate systems replacement and operating model revision are progressing to enable future efficiencies
Tone
ProceduralTopics
Key actors
Ofgem (Office of Gas and Electricity Markets), Gas and Electricity Markets Authority, Department for Energy Security and Net Zero (DESNZ), Jonathan Brearley (Accounting Officer), House of Commons Scrutiny Unit, HM Treasury
Notable line
“Legal provisions are uncertain by nature. Their classification as Resource DEL budget, and inclusion only at Supplementary Estimates, leads to variances with original budgets.”
Key Quotes
“Ofgem's principal objective is to protect the interests of existing and future consumers.”
“Net Resource DEL has increased by £24.8 million (109%) since the Main Estimate. This increase is primarily because of the inclusion of a provision of £30.0 million for potential future legal costs”
“Legal provisions are uncertain by nature. Their classification as Resource DEL budget, and inclusion only at Supplementary Estimates, leads to variances with original budgets.”
“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”
Source · parliament.uk record ↗