The Sun’s front page today accuses Age UK of “accepting [a] £6m-a-year bung from E.On” in return “for pushing expensive tariffs to the elderly”.
In Taking the OAP: Age UK recommends EXPENSIVE power to pensioners after accepting £6m-a-year bung from E.ON, it claimed that the charity promoted a more expensive fuel deal with energy supplier E.On to older people, “£245 more than on the firm’s cheapest 2015 rate”. It added that, with around 152,000 customers using the deal, there was “a total overspend of £37 million in a year”.
In return “the energy giant has been paying Age UK at least £6 million a year in return, around £41 for every person who signed up”.
The Sun was careful to point out that the payments “are not illegal” but that The Sun’s journalists found them “tucked away in Age UK’s annual accounts”.
The Government’s Energy Secretary Amber Rudd has responded by asking energy regulator Ofgem to investigate the claims.
Business Secretary Sajid Javid said to The Sun: “Businesses caught cheating customers should have the book thrown at them. If there’s wrongdoing here, we will not fail to act.”
Age UK rejects the claims
Age UK has rejected the criticism. It said that it had always encouraged older people to compare deals and look for better ones. It did not dispute the figures, but The Sun’s interpretation of them.
Age UK issued a statement saying:
“We strongly reject the allegations and interpretation of figures.
“The Age UK Fixed 2 Year tariff offers a good deal and was the market leading 2 year tariff when launched in January. For example, the Age UK Fixed two Year tariff(1) is over £100 cheaper than that E.ON Standard Variable tariff (2) and is cheaper than other variable tariffs.
“When customers contact us they are offered a choice of all four E.ON tariffs and many choose the one year tariff or variable option, however many prefer the reassurance of a fixed tariff for two years. We have no exit fees so customers can move anytime if they find a different deal. This means they can pick a tariff that best suits their needs. E.ON also offers a free Price Alerts system that lets customers know of potentially better deals as soon as they’re available.
“The long term Commercial partnership includes a typical commission to Age UK of £10 for each customer. Financial support beyond this is not linked to customer numbers.
“The past two years have seen much volatility in the energy market and with E.ON’s support we have managed to maintain our level of charitable work over this time. This reflects the strength of the 14 year relationship.”
E.On also rejected the criticisms, arguing that The Sun was comparing two different types of tariffs.
— Nick Sutton (@suttonnick) February 3, 2016
The investigation by The Sun raises the long-running theme of how charities raise funds the public and in particular from people with vulnerabilities, not that older people are by default vulnerable people.
It is the first newspaper criticism of charities in the past year to focus on a corporate fundraising partnership. Other methods of fundraising that have been criticised have included direct mail, telephone fundraising, legacy fundraising, and major donor prospect research.
The Sun’s story also raised the on-going criticism by some of the salaries of some charities’ Chief Executives. It described Age UK’s CEO Tom Wright as “Scandal fat cat 1”. It says he earns a salary package of “more than £180,000”.
“The Marlborough-educated 53-year-old owns a £1.2 million luxury cottage near Hook, Hampshire.
“Wright and wife Charlotte bought the property in 2002 for £700,000, and it has since rocketed 70 per cent in value”.
It included a photo of the property’s entrance. It did not mention that he and his wife bought the property seven years before he started working for Age UK.
The Sun’s People Power
The Sun is running its third fuel bill cost campaign in partnership with fuel price negotiation site The Big Deal. It features this beneath its criticism of Age UK and E.On, but makes it clear that it will not profit:
“The Sun will make no money. The share we were offered — £10 — will go to a charity that helps old people. The Big Deal will take £30 — £20 to cover costs”.
Fundraising Standards Board to investigate
Andrew Hind, Chair of the Fundraising Standards Board (FRSB), said:
“We have contacted Age UK with regards to claims made about its commercial arrangements with E.ON. While the terms of the energy deal lie firmly under Ofgem’s jurisdiction, our focus will be to assess whether the charity has breached any aspect of the Code of Fundraising Practice and we will work closely with Age UK and Ofgem to establish this.”
Update 4 February 2016 12.09
Age UK’s updated statement is published above. This story initially featured the charity’s original statement which was:
“We strongly reject the allegations and interpretation of figures in this article.
“Age UK has worked with E.ON for the past 14 years, openly and above board, and they have been generous supporters of our charity over and above the number of customers on the tariff. We launched the most competitive, fixed two year energy tariff available anywhere on the market on 20th January this year, with no exit fees.
“Energy prices change all the time and we have always advised older people to look out for new good deals and we will continue to do so.”
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