The government created four new departments in February 2023: the Department for Energy Security and Net Zero, the Department for Science, Innovation and Technology, the Department for Business and Trade, and the Department for Culture, Media and Sport1. The change took effect on 7 February 2023, and the Spring Budget states that, following this Machinery of Government change, indicative budgets are presented and will be confirmed at Main Estimates 2023-241.
The creation of the energy department was set out in the Spring Budget alongside measures affecting household energy costs. The government said it is maintaining the Energy Price Guarantee at £2,500 for a further three months from April 2023, and that it will align charges for comparable direct debit and Pre-Payment Meter customers so that those on PPMs no longer pay a premium for their energy costs1. The Budget states that the Energy Price Guarantee reduced peak CPI inflation by 2.5 percentage points, and that the Office for Budget Responsibility expects inflation to fall from its peak of 10.7% in Q4 2022 to 2.9% in Q4 20231.
On energy supply, the Budget announced launching Great British Nuclear to support new nuclear builds, making up to £20 billion available for Carbon Capture, Utilisation and Storage, and extending the Climate Change Agreement scheme for a further two years to encourage energy efficiency1. It also stated that wholesale energy prices in 2023 are now forecast to be £1.50 per therm, less than half the £3.40 per therm assumed at the November 2022 forecast1.
"the government created four new departments in February: the Department for Energy Security and Net Zero, the Department for Science, Innovation and Technology, the Department for Business and Trade, and the Department for Culture, Media and Sport."
Support to households across this financial year and next was put at a total of £94 billion, equivalent to £3,300 per household on average1. As a result of decisions at the Spring Budget, the devolved administrations are receiving an additional £630 million through the Barnett formula over 2023-24 and 2024-251.
| Department created in February 2023 |
|---|
| Department for Energy Security and Net Zero |
| Department for Science, Innovation and Technology |
| Department for Business and Trade |
| Department for Culture, Media and Sport |
Why it matters for households
The department that now holds the energy price cap and household support schemes is the Department for Energy Security and Net Zero, created in February 20231. Its budgets were indicative at the time of the Budget and were to be confirmed at Main Estimates 2023-24, so the funding behind energy policy functions was not yet fixed1. For a household, the practical effect in the near term was the continuation of the Energy Price Guarantee at £2,500 for three months from April 2023 and the removal of the prepayment premium, both stated in the same Budget that recorded the departmental changes1. The Budget also linked energy resilience measures, including nuclear and carbon capture funding, to reducing exposure to future price shocks1. The regulation-policy hub covers how these bodies set the rules that reach household bills.
What happens next
Indicative budgets for the new departments were to be confirmed at Main Estimates 2023-241. The Energy Price Guarantee was to be maintained at £2,500 for a further three months from April 20231. No further dated steps for the new departments are given in the Spring Budget beyond these.