The Chancellor announced a £9.1 billion package of support to help over 28 million households with the costs of rising energy bills, according to the Government's response to the Business, Energy and Industrial Strategy Committee's report on decarbonising heat in homes1. The same response confirms that from October 2022 the Energy Bills Support Scheme will reduce all domestic electricity customers' bills by £2001.
That £200 reduction will subsequently be recouped through energy bills over five years from 2023/24, the response states1. The response was received on 23 April 2022 and published on 18 May 20221. The announcement of the £9.1 billion package is described in the document as recent at the time of writing; it does not give the date on which the Chancellor made it1.
The response sets the bill support alongside wider spending on low carbon heating. The 2021 Spending Review confirmed £450 million funding for the Boiler Upgrade Scheme over three years, from 2022 to 2025, supporting the Government's ambition to reach 600,000 heat pump installations per year by 20281. The Government will also run a Heat Pump Investment Accelerator Competition in 2022 worth up to £30 million, and the British Energy Security Strategy announced a doubling of funding for the Accelerator from £10 million to £20 million1.
On skills, the response notes that in August 2021 the Heat Pump Association launched an upskilling course for existing heating engineers which can be completed in under a week, and that industry has capacity to upskill over 7,000 heating installers per year to install heat pumps1. It also records that Octopus Energy is investing £10 million in a new training centre in Slough, and that Ideal Energy have announced a new £1 million training centre will open near Hull in Spring 20221.
"the Chancellor recently announced a £9.1 billion package of support to help over 28 million households with the costs of rising energy bills"
The response also covers regulation of heat networks. In December 2021 the Government announced that Ofgem will take on the role of regulator, and under the framework the BEIS Secretary of State will be given powers to introduce a price cap to the market in the future to protect consumers1. The Energy Ombudsman and Citizens Advice will be the frontline organisations to handle escalated consumer complaints1.
| Measure | Figure | Timing |
|---|---|---|
| Energy bills support package | £9.1 billion, over 28 million households | Announced as recent at 23 April 20221 |
| Energy Bills Support Scheme reduction | £200 off all domestic electricity bills | From October 20221 |
| Recoupment of the £200 | Through energy bills | Over five years from 2023/241 |
| Boiler Upgrade Scheme | £450 million | 2022 to 20251 |
| Heat Pump Investment Accelerator Competition | Up to £30 million, doubled from £10 million to £20 million | 20221 |
Why it matters for households
The £200 reduction applies to domestic electricity customers' bills from October 2022, but it is not a grant: the same document states the sum will be recovered through bills over five years from 2023/241. For a household, that means the relief in the first winter is followed by a period in which bills carry the cost of it. The £9.1 billion package is described only in aggregate; the response does not set out how it is divided between households, nor how it interacts with the price cap1.
The heating measures sit on a longer timeline. The Boiler Upgrade Scheme funding runs to 2025 and the 600,000 heat pumps per year ambition is dated to 2028, so neither changes a household's bill in the near term1. The heat network provisions matter to the households served by those networks, who will gain a regulator with powers to require disclosure of fixed charges, tariffs and unit rates, and a future power for the Secretary of State to introduce a price cap1. Households in England, Scotland and Wales are covered by the consumer protection rules, which are reserved across Great Britain, while heat decarbonisation itself is devolved to Scotland1.
What happens next
The £200 reduction takes effect from October 2022, with recoupment through bills over five years from 2023/241. The Heat Pump Investment Accelerator Competition runs in 20221. The uplift in energy efficiency standards comes into force in June 2022, when new homes will be expected to produce around 30% less CO2 emissions compared to the previous 2013 standards1. A full consultation on the Future Homes Standard is intended for 2023, with legislation in 2024 and full implementation in 20251. Strategic decisions on the role of hydrogen in heating are due by 2026, with neighbourhood and village scale trials in 2023 and 2025 respectively1.