By Carl Packman and Matt Copeland
Each winter at least 10,000 people in the UK die due to a cold home. During the 'Beast from the East' in winter 2017/18, this figure exceeded 17,000.
These needless deaths are just the tip of the iceberg. Many more people are suffering with poor physical and mental health due to inadequately heated homes. The resulting impact on health services is acute, costing the NHS between £1.4bn and £2bn every year in England alone.
In too many homes, people have to choose whether to eat or heat. Across the UK they are adopting desperate coping tactics simply to keep warm.
There are three main ways to help address this preventable crisis:
- reduce energy prices
- maximise people's incomes
- improve the efficiency of homes
They are all very important, but we at Fair By Design (FBD) and National Energy Action (NEA) want to focus on the first solution. In particular, we are calling for the extension and expansion of the Warm Home Discount (WHD).
The WHD scheme currently provides a payment of £140 towards energy bills and also contains provisions to carry out projects to help low-income and vulnerable households to better afford their energy bill. The scheme was introduced by the coalition government in April 2011 and is an obligation on energy suppliers funded through bills.
But the continuation of the scheme is in doubt.
Formally, the WHD scheme will end after March 2021. Not only do we want to see an extension of the scheme after this date, we also want to see it expanded to ensure all eligible low income working age households receive the rebate automatically without needing to apply each year to their supplier.
At the moment, there are two ways to qualify for the scheme: low income pensioners who receive the Guaranteed Credit element of Pension Credit receive the payment automatically and don't need to apply to their supplier. This is done using data-matching between energy suppliers and central government. This group is known as the 'core group'.
Other low-income working age households can also access the scheme, but they are required to meet their energy supplier's criteria, based on means-tested benefits as well as any vulnerabilities they may have, such as health conditions. The application process also differs depending on the supplier. This group of recipients is known as the 'broader group'.
Every year many poorer customers miss out on the scheme because:
- Not all suppliers have to offer it
- It is poorly advertised, which means many are unaware of its existence
- The government has not yet made the most of data-sharing powers which would help low income working households benefit from the scheme without needing to apply to their supplier each year
- Their applications could be unsuccessful because there is only a finite amount of money available for the limited annual budget
We don't think there's any reason why low-income eligible households should be left out of a payment they are entitled to, especially when there is the legislation in place to avoid this.
By using current powers within the Digital Economy Act, the government can ensure at least an extra 600,000, and possibly more than 1.5 million households, who are in full or part-time work but can't currently afford basic essentials, will be eligible to receive WHD.
Households shouldn't be missing out on it just because they are unaware of it either, or because they fail in their applications due to the limited annual WHD budget. For many families on a low income, having £140 in their back pocket to go towards heating their home is invaluable.
We think extending and expanding this scheme sits quite comfortably with the government's 'levelling up' agenda. Broadly speaking, this agenda sets out to squash the inequalities that have resulted in many people being left behind and feeling disenfranchised.
Not being able to keep warm and well in your home exacerbates that feeling of disenfranchisement and symbolises the gulf between those who are the least well off in society and everyone else.
The government also needs to stick firm to commitments on energy efficiency. Being able to keep a warm home isn't so easy for everyone. Some people around the country live in homes that can be described as 'leaky' – namely that they are energy inefficient and warmth leaks out them.
As well as WHD, the Department for Business, Energy and Industrial Strategy needs to follow through with key commitments made in the Conservative party manifesto to invest £2.5bn in a new Home Upgrade Grant Scheme for fuel-poor homes and a £3.8bn social housing decarbonisation scheme, alongside wider commitments made in the 2018 Clean Growth Strategy which included an extension of the Energy Company Obligation until 2028 at the current level of funding.
Government also needs to improve the energy performance standards of privately rented homes, with the aim of upgrading as many as possible to EPC Band C by 2030 where it's practical, cost-effective and affordable. It should also demonstrate how social housing can meet similar standards.
On the WHD specifically, we are calling for:
- The government to extend and expand the scheme for at least three years
- For it to ensure current low income pensioners continue to receive WHD rebates and that an extended and expanded scheme uses data-matching powers to guarantee all eligible low-income working age households receive the rebate automatically
- Insisting smaller suppliers are also required to provide all elements of the WHD
- Ofgem to ensure the WHD is better designed - ie that more customers know about it and there are more channels to apply for it via industry initiatives
- For all energy suppliers to implement the new WHD policy before the start of the new phase of the scheme in April 2021, and regularly liaise with customers to see whether the WHD is meeting their needs
- For those suppliers to continue making sure consumers have access to hardship grants and energy/fuel debt advice.
Carl Packman is head of Corporate Engagement at Fair By Design. Matt Copeland is policy manager at National Energy Action. Their full briefing, including costings, can be found here.
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