Scottish retailers flag up pre-pay and bad debt problems for cashflow

(by Karma Loveday)

Scotland’s licensed providers (LPs) have told the market operator, the Central Market Agency (CMA), of a series of structural challenges in the Scottish business retail market that are leaving them short of cash.

Among the key issues were: 

• Wholesale pre-payment requirements – many LPs described the requirement for two- and three- months pre-payment of wholesale charges as a barrier to entry to the Scottish market and an impediment to customer acquisition and business expansion.

• Obstacles to payment recovery – including difficult disconnection policy and costly wholesaler investigations of issues such as faulty meters. LPs urged that the smart meter rollout in Scotland be configured to better support payment recovery, by including difficult-to-access meters (those often associated with bad debt) and through the installation of actuated meters that allow remote disconnection and flow restriction.

The messages were set out by the CMA in its 2025/26 Stakeholder engagement report, which consolidated themes arising from all of the CMA’s engagement with market participants in the year. The CMA indicated it would work to seek improvement in the highlighted matters, including by collating anonymised data on bad debt rates, to support future policy discussions.