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Fuel Bank Foundation responds to BEIS Warm Home Discount Scotland Consultation

May 23, 2022

Fuel Bank Foundation responds to BEIS Warm Home Discount Scotland Consultation Featured Image

BEIS has consulted on proposed changes to the Warm Home Discount (WHD) in Scotland.

The proposals mean that WHD in Scotland will largely mirror the WHD in Great Britain in 2021 to 2022. The primary difference is that non-core spending would be larger due to the increase in overall spending. As in the England and Wales scheme, under the WHD Scotland:

  • the value of the rebate would increase to £150
  • the supplier participation thresholds would be lowered so that more energy suppliers participate in the scheme, particularly from 2023 to 2024 onwards

The consultation period ran from 9th – 22nd May. Read our response to the proposed changes below.

Fuel Bank Foundation (FBF) supports the proposal that Warm Home Discount (WHD) in Scotland continues until March 2026, largely following the previous principles, process and criteria.

This year, more than ever, WHD will provide a lifeline to families and households in Scotland where the current level of fuel poverty sits significantly above the UK average. We would urge, however, that given the current economic situation that there is at least an annual public review to ensure that maximum value is delivered through this intervention to those in fuel poverty.

FBF supports the lowering of the obligation threshold – and in particular from 2023/4 – since this is something we have campaigned on previously. We also support the value of a Broader or Core payment increasing to £150 in line with England and Wales.

We do, however, have material concerns about the impact on fuel poor customers in Scotland who risk being less able to access WHD Broader Group help due to individual supplier schemes being over-subscribed, given the higher percentage of households who will meet the eligibility criteria. This may be a concern for those customers supplied by one the original legacy energy companies who have a higher proportion of customers in fuel poverty.

We also have significant concerns that receipt of WHD may be used as a future passport to access additional financial support to address the current energy crisis and cost of living challenges. The existing lottery that many households face in being accepted for WHD, despite meeting the Broader Group eligibility criteria, is already a material concern that is of significant detriment to some families.

Any further financial support being channelled to those in receipt of WHD would widen the detriment for those who, for whatever reason, meet Broader Group eligibility criteria, but do not receive it. It is critical therefore for BEIS to report on the percentage of eligible households who receive Broader Group support in Scotland and to ensure that suppliers trade Broader Group capacity with other suppliers, rather than increasing their spend through Industry Initiatives. Should material numbers of households meet the eligibility criteria but not receive a Broader Group payment then this should be addressed through the proposed annual review detailed above.

Timescales for payment of WHD for the Broader Group in particular are a significant concern. Those customers who pre-pay for energy – at current forecasts – will need to allocate approximately £350-£430 per month over winter to keep their home warm. The promise of a WHD payment in March 2023 will not keep a pre-payment meter topped up in November or December 2022.

It is essential that the timelines for Broader Group sign-up and verification are accelerated to ensure that financial support is delivered when it is required, from late autumn. Help must be phased to provide surety over the winter months that some energy will be afforded to households in fuel poverty.

FBF supports the decision for the removal of any maximum threshold for total financial assistance payments that are made by a supplier, but would urge further consideration of whether the individual, per customer £150 limit should be increased to reflect the financial issues that households are currently facing. The proposed £150 barrier will mean that some households who require crisis help will not receive the support they require. However, if they had a historic debt, they could receive a larger value through debt write off funded through Industry Initiatives.

It is important to note that many Fuel Bank clients are not necessarily in debt, they simply have a very low income and often have had a pre-payment meter for many years to avoid going into debt in the first case. This segment could be inadvertently disadvantaged by this element of the proposals.

We have some minor concerns that the WHD programme being delivered as two separate schemes i.e. in Scotland, and in England and Wales, could drive additional costs and uncertainty for those third sector organisations who provide help funded by Industry Initiatives. We are sure, however, that these can be overcome, or mitigated through guidance from BEIS that removes unnecessary duplication or costs and promotes continuity and consistency of schemes across GB.