What is the Warm Home Discount?
The Warm Home Discount is a central government scheme funded by energy suppliers. Larger energy suppliers are obligated under Ofgem regulations to deliver support to fuel poor consumers. The most recognisable element of the scheme is the £140 fuel rebate to fuel poor households during the winter. ‘Larger suppliers’ include those with at least 200,000 customers. Smaller suppliers can voluntarily offer funding to support the scheme.
There are Core and Broader group rebates for fuel poor households based on different eligibility criteria. The Core Group receive their rebates automatically as they are identified as fuel poor or at risk of living in fuel poverty via the Department of Work and Pensions’ credit database. The Broader Group must apply to receive their rebate via their individual energy suppliers. Not all suppliers have to offer the rebate, and some only have applications open for a very short period of time. It is also possible for the funding amount to run out, so applications should be made as soon as possible. You can read more about the two groups and how to apply here.
The third strand of the Warm Home Discount Scheme is the Industry Initiatives section. This element supports programmes and partnerships to assist those in or at risk of fuel poverty as part of suppliers’ broader group obligations. These programmes largely include supporting energy advice services, but they also fund the installation of some energy saving measures. This element is capped at £40 million of funding, which is spread across the large suppliers. Suppliers do not have to provide funding for this strand, and can instead meet their non-core obligation targets through the rebate strand only.
Warm Home Discount Industry Initiatives
This Industry Initiatives funding is largely used to fund energy efficiency advice. This includes referring consumers to the rebate strand of the Warm Home Discount, income maximisation schemes, tariff switching sites, as well as providing energy efficiency measures. This funding is largely what supports the Council’s free home energy advice service, from which nearly 500 Portsmouth households received assistance from May 2019 – May 2020. Industry Initiatives also funds the boiler replacement scheme which the council offers during the colder winter months as an emergency measure for owner occupiers. Over 80 vulnerable households were able to access this scheme in the winter of 2019/20, ensuring they can keep their homes and their families warm and healthy. It is also used to support the Council’s free first time gas central heating scheme, which is available to 1,500 households to provide more affordable heating methods.
Ending in 2021?
The Warm Home Discount obligation is set to close at the end of March 2021. It is not known what, if anything, will replace this hugely important scheme after this date.
The Warm Home Discount Scheme offers a lifeline for those struggling to pay their fuel bills. During winter it supports households to stay out of debt, and with providing the necessary equipment to ensure their homes stay warm. In 2018/19 the rebate strand of the scheme provided support to more than 2.2 million households, totalling £310 million of funding.
Without an extension to this scheme, millions of people will miss out on energy rebates and wider support to help them stay healthy in their home. This could be hugely detrimental to individuals, and also to the central government’s fuel poverty reduction targets, which the UK is already set to fail. It was recently reported by the BBC that two thirds of UK homes fail to meet long term-energy efficiency targets, meaning the majority of homes are having to spend more on their energy bills.
National Energy Action (NEA) have launched a campaign in partnership with Fair By Design to lobby for an extension to the scheme. They would like to see a 1 year minimum extension, and obligations for smaller suppliers to also provide the Warm Home Discount rebate. They would like to see better promotion of the scheme, as many eligible households are unaware of its existence, and more funding to ensure every fuel poor household that applies to the scheme is offered assistance.
The national Fuel Poverty Strategy went out to consultation in September of 2019 – we are yet to hear the outcomes of this consultation and to receive a finalised strategy. Without clear direction, it is impossible to identify how fuel poor households will continue to be supported in future. With fuel prices set to rise, it is more important than ever to invest in improving energy inefficient households and supporting vulnerable families to stay warm and healthy.
You can support NEA with their campaign to protect and extend the Warm Home Discount through social media – tweet your support using the hashtag #WarmHomeDiscount to your local MP, @Ofgem and @beisgovuk.
By Anttonia Lindup