Winter 2022/23 was one of the toughest in recent memory for household finances but the real concern is that we have yet to see the worst effects of the cost of living crisis.
Government support on energy bills, including the temporary freeze in the Energy Price Guarantee, has played a crucial role in protecting customers from the worst impacts of the cost of living crisis. However, as this unwinds, it is crucial that a clear plan is in place to provide continued support in the short-term and a targeted package of measures to help the most vulnerable customers over the longer term.
While government is understandably keen to wean the the country off state support on household finances, it must eventually acknowledge that billpayers alone cannot absorb the cost of these targeted measures. For next winter at least, government must be willing to commit funding to ease the pressure on utilities bills.
This is why throughout spring and summer of 2023, a corner of Utility Week will remain in winter. Our Action on Bills campaign will keep a constant focus on the need to prepare for winter now, not as the nights begin to draw in.
Over the coming months we will delve into the various ways in which utilities can offer support to the customers that need it most and the role for policymakers and regulators in enabling this.
The key asks of government at the outset of this campaign are:
- A clear plan for targeted support on energy bills for vulnerable customers to be put out to consultation before the summer recess with a target of putting this into action by April 2024
- A revised Energy Bills Support Scheme to be brought in for next winter while a more targeted approach is being designed
- Defra to support social tariffs in the water sector through a clear funding commitment and a definitive stance on whether there should be a single social tariff
The campaign will canvass views from across the utilities sector on how companies can best support customers and how blockers to progress can be removed. We will translate this into a manifesto for action on bills long-term, which will be presented to government. We will seek the support of MPs across the political divide to support these aims and will push for an open dialogue with government and regulators.
Alongside these lobbying efforts, we will run a series of deep dives into the various options for targeted support across both energy and water.
Other topics to be explored as part of the Action on Bills campaign will include:
- The role of the benefits system in bills support, including whether a bespoke utilities benefit is feasible
- The danger of customers falling between the cracks – how the evolution of bill support must not leave cohorts of customers behind
- The future of bills support in the non-domestic sector
- The role of both water and energy efficiency in bringing bills down long term
- The need to accelerate the transition away from legacy prepayment meters to a fully smart system
- How progress can be accelerated on the sharing of data on vulnerable people
The campaign has been informed by conversations with industry and fuel poverty experts as well as the views of the specially convened Utility Week Taskforce of industry leaders and our strategic partner PA Consulting.
Engagement from companies across the utilities sector, including those who do not have a direct billing role, will be sought and several senior figures have already thrown their weight behind our campaign.
Philippe Commaret, managing director of customers at EDF, said: “Whilst we can be hopeful that energy costs have calmed since last year, household bills are likely to remain much higher than they were before the crisis and we know this is already having a big impact on some of our customers. We are keen to accelerate discussions around what support could be available this winter for those customers who are struggling and welcome Utility Week’s efforts to spur this on.”
Rachel Fletcher, director of regulation and economics at Octopus Energy, said: “The focus of this campaign on much-needed support for customers struggling to pay their utilities bills next winter and beyond is very welcome. Although prices are expected to fall they will likely remain at record highs and customer indebtedness continues to climb. Bills will remain unaffordable for many people next winter so there is no excuse for not acting now.”
Jose Davila, director of strategy, regulation and transformation at Eon UK said: “With energy bills set to remain above £2,000 a year for the foreseeable future, it’s clear that the public are going to need further support. This campaign from Utility Week is very timely in highlighting the urgent need to prepare now for next winter and we are happy to support it.”
Bill Bullen, chief executive at Utilita, said: “As it stands, millions of fuel poor households will – in six months’ time – be facing a winter without targeted energy bill support. They must not be left to suffer in the cold next winter.
“That’s why it’s vital – through campaigns such as Action on Bills – to highlight the need for further government intervention and a long-term solution to the affordability problem.
“Action on Bills is also right to recognise the urgent need to accelerate the transition away from legacy prepay – an antiquated ‘key card’ meter scenario that is sadly still endured by more than two million households.”
Lawrence Slade, chief executive of the Energy Networks Associations, said: “The Action on Bills campaign comes at a critical time, with the country in the grips of an ongoing cost of living crisis. Network companies are playing their part, working to further improve the Priority Services Register whereby customers who need extra support receive what they need, when they need it.”
Gareth Wood, VP operations, Ovo, said: “Households have endured one of the worst economic shocks for a generation and it’s critical we all work together as an industry to support them. We support the Action on Bills Campaign and will continue to push for measures and targeted support, such as a social tariff to help lower-income and vulnerable households, so families receive ongoing help with their energy bills.”
To get involved, please contact Utility Week editor James Wallin.