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Warm Home Discount Scheme

Volume 519: debated on Thursday 2 December 2010

As part of the spending review we announced that energy suppliers would be required to spend £250million in 2011-12 rising to £310 million by 2014-15 on assisting vulnerable consumers with their energy bills. I am pleased to announce that this vital support will be delivered through the warm home discount scheme.

The consultation document we have published today sets out how we propose suppliers should be required to help more of their most vulnerable consumers with their energy costs. Our model includes four key areas of support:

We propose that the majority of spend across the four years of the scheme (2011-12 to 2014-15) should be on the core group. 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.

While we know the core group have a high propensity to be fuel poor, we also recognise that other groups are at risk of fuel poverty. Our proposals would therefore also ensure some support will be available for other groups of vulnerable consumers through the broader group.

The voluntary agreement between energy suppliers and Government provides real help to people, but it ends in March 2011. We think it is important that there are some arrangements in place to allow suppliers to continue providing these benefits to the customers receiving them for a period of time. However, we believe that the proposals for the core and broader groups will take more people out of fuel poverty as well as providing clearer and more predictable benefits. We therefore propose that these should be transitional arrangements and that suppliers should have to manage this spend down over the scheme period.

Our 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.

The warm home discount consultation, which sets out these proposals in greater detail, will run until the 14 January 2011 and is available at:

Copies have also been deposited in the Libraries of both Houses.