WHD to split into separate England and Wales and Scotland schemes from SY12

The Warm Home Discount (WHD) will operate as two separate schemes from Scheme Year 12 (SY12), one for England and Wales and a separate one for Scotland, according to Ofgem's Warm Home Discount Annual Report 2021-2022, published in December 2022¹. The same report states that in SY12, which runs from 1 April 2022 to 31 March 2023, the rebate value has increased from £140 to £150 and annual support is being provided for around 750,000 additional households¹.

The threshold for compulsory supplier participation falls from a minimum domestic customer base of 150,000 to 50,000 in SY12, which Ofgem says ensures an even greater number of consumers have access to the scheme¹. The report also notes that in May 2022 the government published its response to the consultation on the implementation of the WHD scheme in Scotland from 2022 to 2026¹. The Energy White Paper, published in December 2020, set out plans for extending and reforming the WHD scheme from 2022 onwards¹. The split follows the pattern set out in Why Home Energy Grants Differ Across the Four Nations and sits within the wider Devolution and Household Energy Independence settlement; the separate Scottish scheme is covered in more detail in The Warm Home Discount in Scotland: How It Differs.

The report covers Scheme Year 11 (SY11), which ran from 25 June 2021 to 31 March 2022, a shorter year than usual because the Warm Home Discount (Miscellaneous Amendments) Regulations 2021 came into force in June 2021¹. In SY11 suppliers delivered over £359 million in WHD support, an increase on the £351 million spent during SY10¹. Energy bill rebates of £140 were provided to nearly 2.32 million vulnerable customers¹. Just under 960,000 eligible low-income pensioners received Core Group rebates worth £134.3 million, and almost 1.34 million customers in or at risk of fuel poverty received Broader Group rebates worth £187.4 million¹. Suppliers delivered a combined £34.8 million across 40 Industry Initiatives¹. Since the scheme began in 2011, £3.5 billion has been spent supporting vulnerable consumers through energy bill rebates and Industry Initiatives¹.

On compliance, Ofgem reports that all suppliers reporting end of year compliance for SY11 met their individual WHD spending obligations and all but one over-delivered¹. There were 24 suppliers obligated at the start of SY11, but seven subsequently exited the energy market and failed to report compliance at the end of the year, with the Supplier of Last Resort process implemented in each case¹. The report lists those exits, including People's Energy to British Gas and Utility Point to EDF on 14/09/2021, Green Supplier Limited (Green) to Shell Energy and Avro Energy to Octopus on 22/09/2021, Igloo to E.ON on 29/09/2021, Pure Planet to Shell Energy on 13/10/2021, and Together Energy (Bristol E.) to British Gas on 18/01/2022¹. That left 17 suppliers participating at the end of SY11, of which 12 were compulsorily obligated, three were smaller obligated suppliers and two joined on a voluntary basis¹. The report also records that Utility Warehouse submitted its end of year report for SY11 after the deadline, and that this was added to the supplier performance report in Ofgem's November 2022 update¹. The treatment of supplier exits is set out in Supplier Licensing, Supplier Failure and Supplier of Last Resort.

"from SY12, WHD will be separated into two schemes, one for England and Wales, and a separate one for Scotland."

Why it matters for households

The WHD is a direct credit on an electricity or gas account, so the split changes which scheme a household falls under depending on where it lives, and which rules and eligibility criteria apply. The reduction in the compulsory supplier threshold from 150,000 domestic customers to 50,000 brings smaller suppliers into the scheme, which matters for households supplied by those companies because their customers become eligible for support they may not previously have received. The rise in the rebate from £140 to £150 and support for around 750,000 additional households increase the total value reaching homes in SY12. For a household's energy independence, the practical effect is that a bill credit reduces the amount owed to a supplier, but it does not change how a home is heated or how much energy it uses. The separate Scottish scheme means eligibility and delivery in Scotland are set by different arrangements from those in England and Wales, a distinction that also runs through HEEPS Area Based Schemes in Scotland and other devolved support.

What happens next

The final reconciliation for the SY11 Core Group is due to be finalised by the end of January 2023¹. SY12 runs to 31 March 2023, with the £150 rebate, the lower supplier threshold and the two-scheme structure in place for that year¹. Ofgem states it will continue to monitor supplier performance throughout WHD SY12¹. The report does not set out the detailed eligibility criteria for each of the two SY12 schemes, and these have not been reported here.

Sources1 cited

1. Warm Home Discount (WHD) Annual Report 2021-2022, ofgem.gov.uk