Ministers urged to give fuel poor £1k this winter

Industry experts are calling on the government to urgently announce £1,000 in support for each of the most vulnerable households this winter, warning that time to do so is rapidly running out.

Academics from the University of Oxford, alongside experts at Cambridge Architectural Research and energy retailer Utilita, have published their preliminary findings into what support will be required this winter and are calling on the government to make a decision ahead of parliament going into recess later this week.

As part of the research the industry experts examined the energy usage data, provided by Utilita, of 28,000 households with both gas and electricity smart prepayment meters (PPMs) – these households, they said, are “highly likely to be in fuel poverty”.

Their usage was assessed from January 2019 to April 2023, including four complete winters.

The findings showed that both gas and electricity usage is down on 2019 and that households are increasingly self-disconnecting, with almost two-thirds self-disconnecting an average of five times a year.

They additionally show that “worrying numbers” have stopped using gas central heating and are instead reliant on electricity for warmth, with concerns that so little electricity usage is making consumers “seriously cold” and is putting their health at risk.

Meanwhile concerns are raised about the fact that even households on the Priority Services Register (PSR) are self-disconnecting when they run out of money for their PPM.

In light of these findings, as well as the fact that energy costs are still historically high, the organisations are calling for the introduction of targeted support measures.

Their research indicates that the £400 EBSS, for electricity accounts only, was insufficient to prevent a quarter of self-disconnections and they are therefore calling for £500. Additionally, a further £500 is needed for gas as well.

This Fuel Bill Support Scheme (FBSS) should automatically provide all fuel-poor households with £1,000 for their energy bills, starting on 1 October.

“The amount should be split between gas and electricity if both fuels are used. This would bring the fuel bills of the typical household back to the level they were in October 2020, before the increases in fuel prices and before the rise in the cost of living,” they said.

Utility Week’s Action on Bills Campaign, which launched earlier this year, is also calling for more support to be announced this winter ahead of more targeted measures, such as a social tariff, being introduced in April 2024.

Elsewhere, the industry experts are calling for the Cold Weather Payment scheme, which provides eligible households with £25 if temperatures are below freezing for seven consecutive days in their region, to be replaced with a new Extreme Weather Payment.

The current scheme, which provides the funds retrospectively, is described as “inadequate and of minimal help”.

The proposals would see a new payment of £10 credited to eligible accounts on every day the Met Office declares the temperature will drop below -4 °C the day after.

Other proposals include ending self-disconnections for those on the PSR, as well as ending the use of vouchers for those on traditional PPMs. A better system of providing help is needed, said the experts, one which directly credits the energy account.

Unused vouchers have been an area of much concern recently, with figures from the Department for Energy Security and Net Zero (DESNZ) showing that with little over two months to go before the scheme was due to end on 30 June, more than £160 million in energy support vouchers remained unclaimed.

The experts point out that the money is available to support vulnerable households now, as the government budgeted £8 billion more to support energy bills than it now expects to spend in 2023-24. Any additional funds, it added, could come from the Windfall Tax on oil companies.

Speaking to Utility Week in the wake of the preliminary findings being published, Tina Fawcett, associate professor and deputy leader of the Energy Group at the Environmental Change Institute, University of Oxford, said they are “worried that there’s going to be a great deal of hardship” this winter without further support being announced.

Asked about how best to target the support at the most in need, she said: “We don’t think we have got the perfect answer because this problem has been going on since the definition of fuel poverty was devised. You can have a definition, but that doesn’t help you find people because in any category you can think of the analysis will show you quite a few of the fuel poor aren’t in that category.

“So the question is, what’s the balance between overpaying, throwing a broader net to capture everybody who might be vulnerable, versus underpaying – being much more precise but then knowing you are missing out quite a lot of vulnerable people? And it’s finding that balance. There’s no perfect solution, you can’t design a system where you only target the fuel poor and not anybody else.”

A DESNZ spokesperson did not say when asked whether an announcement on support will be made this week.

They said, however: “We covered around half a typical household’s energy bill over winter and with costs falling from next month as the new price cap kicks in, the Energy Price Guarantee will remain in place as a safety net through to April 2024 – with additional help targeted at the most vulnerable.

“As set out in the Autumn Statement, we’re working with consumer groups and industry to assess the best long-term approach to helping vulnerable households, as part of wider market reforms.”

Tackling fuel poverty will be discussed in more detail at Utility Week’s upcoming Consumer Vulnerability and Debt Conference on 7 November in Birmingham. To find out more and book your place, click here.