NEA comments on the UK Government announcements on the new “Help to Heat” and Warm Home Discount schemes
The Government has today set out details of a home energy efficiency policy to supersede the current Energy Company Obligation (ECO) which is due to end in March 2017. The new “Help to Heat” policy will initially run for one year (2017-18) followed by a longer term scheme from 2018-2022. Subject to Parliamentary approval of the scheme regulations, the Government has also confirmed today that the Warm Home Discount Scheme (WHDS), operated by 11 larger energy suppliers, will be extended to 2020-2021 and has set out details for the first two years of this scheme.
Jenny Saunders OBE, Chief Executive of the charity National Energy Action (NEA) comments:
“NEA welcomes the Government’s plans to extend these schemes and make them progressively more focussed on helping households out of fuel poverty. There is, however, no way of avoiding the fact that the new “Help to Heat” scheme will be much smaller than previous energy efficiency obligations. As a result, the real challenge that remains is how to reduce the number and depth of those households in fuel poverty who live in the least efficient properties. Many of these households currently need to spend more than twice as much on their energy bills, despite being on the lowest incomes. These are the households we need to support to meet the first interim fuel poverty targets in England by 2020.
“The Warm Home Discount for this year will largely be unchanged yet we now have a clear signal to energy suppliers that they will be required to continue to provide crucial assistance to their customers through direct rebates on bills and other industry initiatives. Reforms to introduce voluntary, centrally selected and pre-approved industry initiative schemes may enable new service providers to access funding to help vulnerable consumers, as well as allowing suppliers to develop existing partnerships which are already providing essential energy and debt relief advice. Whilst NEA welcomes these positive developments, we also stress the need to follow through with plans to extend data sharing powers to enable an automatic discount on bills to low income families and not just pensioners, and to work with the Treasury to expand the WHD scheme overall. We are also disappointed that the Government has yet to confirm that smaller energy suppliers should be obligated to deliver the rebate or pay into an industry initiatives pot from 2017”.
“More detailed work is needed to ensure these extended schemes help us meet the stated aims of the Fuel Poverty Strategy for England and help reduce fuel poverty across the other nations in Great Britain. As identified by the Committee on Climate Change, this will require additional resources”.
Tomorrow the UK Government will release its latest fuel poverty statistics. NEA will provide further comment once this report has been published.
- NEA is an independent charity working to protect low income and vulnerable households from fuel poverty and exclusion in the energy market. NEA has a network of offices throughout England and also has national offices in Cardiff and Belfast which also work to support deprived communities and low income energy consumers in Wales and Northern Ireland respectively.
- NEA works to influence and increase strategic action against fuel poverty at a national level through its policy, research and campaigning functions. The charity similarly works with partners from industry, government and the third sector to deliver practical solutions to UK households – improving access to energy advice, energy efficiency products and other related services for vulnerable consumers. NEA believes that radically improving the fabric and heating of homes represents the most cost effective long-term solution for tackling high energy bills and helping to eradicate fuel poverty.
- NEA has helped millions of households throughout the UK gain access to energy advice and energy efficiency grants. Over 440,000 heating and insulation measures have also been installed to over 360,000 homes through NEA’s Warm Zones subsidiary community interest company which focuses on delivering energy efficiency solutions to low income households in deprived areas. NEA also provide the secretariat for the All-Party Parliamentary Fuel Poverty & Energy Efficiency Group, which was first established in 1995 as the Parliamentary Warm Homes Group, to raise awareness of the problem of fuel poverty and the policies needed to eradicate it.
- ECO was launched in January 2013 and is currently in its second obligation period, which is due to end on 31 March 2017. In 2014, the programme was reduced in size by a third. The Government’s Spending Review 2015 announced similar plans for the supplier obligation to be reduced still further to an estimated level of £640m per year and run for 5 years from April 2017. The proposed new schemes will be the primary vehicles through which Government must meet its commitments to tackle fuel poverty. However, according to the Climate Change Committee (CCC) and think tanks like Policy Exchange, resources are not sufficient to meet these targets.
- The Warm Home Discount scheme was launched in April 2011 and has provided assistance with energy costs to around 2 million low income and vulnerable households in Great Britain each year. Since its launch, the scheme has provided over £1.4 billion of direct assistance to low income and fuel poor households. The Government announced in the Spending Review in November 2015 that the Warm Home Discount scheme would be extended to 2020/21 at current levels of £320m per year, rising with inflation, to help households who are at risk of fuel poverty with their energy bills.
- To read the Government’s response to the Warm Home Discount Scheme click here
- To read the Government’s consultation on ECO click here