The consultation document proposes four key areas of support:
- A Core Group – this would be the majority of spend from energy suppliers over the four years of the scheme (2011-12 to 2014-15). These are a well-targeted group of the poorest pensioners who have a high propensity to fuel poverty and a higher risk of excess winter deaths. This section of the model would build on the 2010 Energy Rebate Scheme, a successful data matching pilot between DWP, DECC and the six major energy suppliers that resulted in an £80 rebate being provided to over 200,000 of the poorest pensioner households this year.
- A Broader Group – whilst the Core Group have a high tendency to be fuel poor, it is recognised that other groups are at risk of fuel poverty. The proposals would therefore also ensure some support will be available for other groups of vulnerable consumers.
- Legacy Spend - The Voluntary Agreement between Energy Suppliers and Government ends in March and our proposals allow suppliers to continue providing these benefits to the customers receiving them for a period of time. These would be transitional arrangements and suppliers would have to manage this spend down over the scheme period and replace it with other more targeted and predictable support.
- Industry Initiatives - The proposed model also recognises the good work suppliers have been doing through various industry initiatives under the Voluntary Agreement, and provides room for them to continue funding them. Such activities include working in partnerships to identify vulnerable customers and funding services delivering energy advice to vulnerable customers.
Immediate help for vulnerable homes this winter:
- The Winter Fuel Payment remains at the higher rate of £250 for households with someone aged up to 79 years old and £400 for households with someone aged 80 or over.
- Cold Weather Payments of £25 per week are paid to pensioners on Pension Credit, people on income-related benefits who are; disabled, have a child under five living with them, or disabled children, when the weather is really cold. So far, this winter, over four million households will automatically receive this payment.
- Energy suppliers are obligated under CERT to help the most vulnerable households install energy efficiency measures. We have already taken steps to ensure this work is better targeted.
Tackling the underlying causes of fuel poverty through the Green Deal from 2012
The coalition is committed to a new approach to insulate the country’s homes. This requires a comprehensive approach to energy efficiency – the Green Deal. The legislation will be introduced to Parliament in a few weeks’ time. Through the Green Deal, many people will be able to pay back the upfront costs of home insulation work through the lower bills that will result. The coalition recognises that extra help is needed to provide more of the most vulnerable and fuel poor households with the basic heating and insulation measures needed to keep homes warm at a more affordable cost. So, energy companies will be required, under the new Energy Company Obligation (ECO), to focus their assistance on the poorest and most vulnerable households, as well as those in hard to treat properties which cannot achieve financial savings without a measure of support. ECO, which will replace CERT and CESP when the Green Deal becomes available, will not be about light bulb giveaways – it will be about insulation and improving heating systems – measures which help people manage their bills for the long term.