Coalition responds to Warm Homes Discount Consultation

The End Fuel Poverty Coalition has responded to the government’s Warm Home Discount consultation calling for the extension of the programme to 2026 and welcoming the possibility of debt relief being introduced.

The response is summarised below and can be read in full online: http://www.endfuelpoverty.org.uk/wp-content/uploads/End-Fuel-Poverty-Coalition-WHD-Submission-FINAL.pdf

In our responses to government consultations, we have been clear that there must be urgent delivery of government promises on tackling fuel poverty, such as confirming the extension of Warm Home Discount (ideally to 2026), introduction of the promised Home Upgrade Grants and social housing decarbonisation programme.

This also needs to include an extension to the Energy Company Obligation (ECO) from April 2022- March 2026 and maintain its key focus on low income and vulnerable households.

Government should further ensure that the Shared Property Fund (SPF) helps end cold homes across the UK and plans are introduced to extend and, as suggested by National Energy Action, strengthen the increase to Universal Credit for low income households.

Therefore, the End Fuel Poverty Coalition welcomes the publication of this consultation for an extension of the Warm Home Discount.

During this extraordinary time, for many, personal finances are under intense pressure and schemes such as this will prove welcome relief for many households. Overall, the proposals within the consultation move the scheme forward in a positive direction. However, there is a need to accelerate wider reforms of the scheme.

The Coalition broadly supports the principle contained in the consultation of a debt write off. This is suggested to be capped at £2,000 in order to enable energy suppliers and delivery partners to assist customers who have a debt which is likely to be less than 4 years old, even if they have a higher than average level of debt. This will allow for more customers to be supported within the limited budget for industry initiatives, while allowing significant debt clearance for potentially more than 3,000 households.

However, this should be kept under review to ensure it meets the needs of the most vulnerable in light of Covid-19 lockdowns and the likely increase in energy usage as people stay at home.

This consultation contains welcome proposals for reform, especially within the context of Industry Initiatives, but it is clear that these tweaks in rules will only serve to remove support from one group to improve support for others.

A broader set of reforms is needed to increase the financial envelope of the scheme and to ensure that it can support all of the households that need it.

More information from our wider proposals is available in our response to the Comprehensive Spending Review.

Budget a missed opportunity to end fuel poverty

The End Fuel Poverty Coalition has responded to the first Budget delivered by Chancellor Rt. Hon. Rishi Sunak MP.

A spokesperson for the Coalition commented:

Despite the exceptional circumstances of today’s Budget, the lack of any proposed measures to boost domestic energy efficiency and end fuel poverty is nothing but an insult to the millions of ordinary people living in cold homes.

We urge the government to rectify this urgently and take concrete steps to end fuel poverty at the earliest opportunity.

The Coalition urges the government to publish its response to the Fuel Poverty Strategy Review, set out the funding and eligibility criteria for the proposed Home Upgrade Grants and to put in motion the social housing decarbonisation programme at the earliest opportunity.

It must also guarantee the extension and expansion of the Warm Home Discount programme as a matter of urgency.

Two million households could miss out on vital lifeline

A new report released today warns a scheme which provides a payment of £140 towards energy bills – the Warm Home Discount (WHD) – could end in March 2021, despite it providing a lifeline to millions of pensioners across Great Britain.

The authors also highlight that up to two million working age households across Great Britain could already be missing out on the energy rebate each winter, leading to difficulties keeping homes at a safe temperature.

National Energy Action (NEA) and Fair By Design (FBD) have teamed up to call for an extension and expansion of the scheme to ensure all eligible low income working age households receive the rebate automatically without needing to apply each year to their supplier.

Peter Smith, Director of Policy and Research at NEA commented:

For nine years the Warm Home Discount scheme has been hugely successful in ensuring that the most vulnerable pensioners receive vital rebates automatically and are better able to afford to keep their homes adequately warm over winter.

It’s crucial this continues. Legislative powers were also passed in Parliament three years ago which allow the Government and suppliers to provide this support automatically to working age households too but up to two million Brits  are missing out on £140 energy rebates each year.

This is despite them being eligible for support and paying for the cost of the policy through their energy bills.

NEA and FBD say most poorer customers miss out each year because the Warm Home Discount is poorly advertised which means many are unaware of its existence. And even when customers are aware and apply, their applications can be unsuccessful because there is only a finite amount of money available for the limited annual budget. Smaller suppliers are also not required to provide the WHD meaning some customers switch suppliers in order to benefit from a cheaper deal but end up losing their entitlement to the £140 rebate making them worse off.

Carl Packman, Head of Corporate Engagement at Fair By Design said:

Many low income households are already compelled to make a choice nobody should have to make: to heat or to eat.  At the same time many pay a poverty premium for the way they pay for household heat, which makes that desperate situation even worse.

The Warm Home Discount is a lifeline for many struggling to heat their homes, to levels many of us take for granted. But there is a risk the scheme will end in March 2021.

Putting £140 back in the pockets of millions of working age people will mean they pay a fair price for their energy. It mustn’t be underestimated just how valuable this measure will be.

NEA and FBD are calling for Government to extend and expand the Warm Home Discount scheme for at least three years and ensure smaller suppliers are also required to provide the WHD. Current powers within the Digital Economy Act allow Government to ensure that all those eligible for the WHD rebate actually receive it without reducing benefits for low income pensioner recipients who are most risk of dying over winter.

WHD Industry Initiatives also fund the work of community and voluntary organisations to deliver assistance with debt and energy advice. Without a commitment to the extension of this element of the scheme NEA and FBD have warned that this work will cease.

NEA and FBD’s full briefing highlights how this can be achieved in a cost neutral way. Smith concludes:

We hope the UK Government, Ofgem, parliamentarians, and energy companies work together  in 2020 to ensure that the scheme continues and expands after 2021.