The Government committed in the 2022 Autumn statement to consulting on targeted support for energy bills, and that consultation has still not been received, according to a briefing published by the industry body Energy UK on 25 June 20241. Energy UK states that industry, consumer groups and charities remain disappointed at the delay1.
The briefing sets out the scale of the support already provided and the pressure that remains. More than £33 billion was spent across the Energy Price Guarantee and the Energy Bills Support Scheme, yet millions of households still struggled to afford their bills, which Energy UK says are still a third higher than pre-crisis1. It adds that bills remain around 80 per cent higher than pre-pandemic levels1. National Energy Action estimates that as of 1 October 2023, 6.3 million UK households were living in fuel poverty1.
On debt, Energy UK cites Ofgem's most recent data showing customer debt and arrears in energy at around £3.1 billion, double the level at the start of 20201. It notes that suppliers covering around 90 per cent of the UK domestic market are signed up to Energy UK's Vulnerability Commitment, and that suppliers invest tens of millions of pounds annually in voluntary programmes, but says suppliers cannot solve the wider affordability crisis on their own1.
The briefing also addresses how support is paid for. Bill support, for example through the Warm Home Discount, is currently funded through levies on customer bills, which Energy UK describes as regressive1. It says the Energy Bills Support Scheme was not targeted because of the urgent need for support, and was received by households who may not have needed it1. Energy UK argues that a targeted mechanism could have lowered public spending while reaching those who needed it most, and that support should be funded progressively through general taxation rather than through bills1. It adds that suppliers should deliver such support, but the Government must determine eligibility, and that it should be underpinned by improved data and data-sharing capable of targeting support based on household income data1. Energy UK also identifies ongoing challenges around targeting, including access to data and data sharing, and avoiding cliff edges for customers close to an eligibility threshold1.
"The Government committed to consulting on targeted support in the 2022 Autumn statement."
Why it matters for households
The shape of any future support matters to a household's energy independence because it determines who receives help, how much, and who pays for it. Under the current arrangement described by Energy UK, help such as the Warm Home Discount is recovered through levies on customer bills, so the cost sits on bill payers rather than on general taxation1. A move to targeted support funded through taxation would shift that cost, but it would also introduce an eligibility test, and Energy UK notes the difficulty of setting a threshold without creating cliff edges for households just above it1. The briefing does not set out income thresholds, eligibility criteria or payment levels, and none have been reported1. For households, the practical position described is that bills remain around 80 per cent higher than before the pandemic, arrears have doubled since the start of 2020, and the mechanism intended to replace universal support has not yet been consulted on1. The rules that govern how such schemes are proposed and decided are set out in the site's guide to energy consultations, and the department responsible is covered in the guide to DESNZ. Support delivered through suppliers also sits alongside schemes such as the Energy Price Cap and consumer protections including the Renewable Energy Consumer Code and TrustMark.
What happens next
Energy UK calls on the Government to urgently follow through on a consultation addressing targeted, enduring bill support for vulnerable customers1. No date for that consultation has been reported1. Energy UK states that intervention will be needed again this winter and beyond1.
Sources1 cited
- Targeted bill support - Energy UK, energy-uk.org.uk