Thousands of homes missing out on help with bills

Support for households struggling to pay utility charges going unused, writes Jeff Salway

Thousands of Scottish households struggling to pay their energy bills are missing out on help that could boost their fight against rising gas and electricity prices.

Between the UK and Scottish governments and the UK’s big six energy suppliers, millions of pounds worth of assistance is available to households finding it difficult to cover their fuel costs. Yet take-up of the various schemes remains low, with suppliers under fire for failing to promote them effectively.

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Some 64,000 Scottish families will struggle to heat their homes this winter, according to research by Save the Children, which warned that thousands of children would become ill as a direct result.

More than one in three households in Scotland – some 900,000 – are estimated to be in fuel poverty, defined as spending 10 per cent or more of their income on their energy bills. And more homes are being pushed into that bracket as prices continue to rise.

Yet while 800,000 UK households qualify for a £120 rebate on their fuel bills, under the Warm Home Discount Scheme, just 25,000 get it, Save the Children found. It blamed a lack of funding from energy suppliers for the massive shortfall.

The scheme offers a £120 energy bill rebate to eligible households in the first year (winter 2011-12), £130 in the second year, £135 in the third and £140 in the fourth year.

It relies on suppliers to fund it, but limited financing of the discounts means most operate on a “first come, first served” basis. Of the households that qualify for the support, just a small group containing the poorest pensioners automatically get it. After that it’s discretionary, with payment down to the individual supplier.

Ann Robinson, director of Consumer Policy at uSwitch.com, said: “With energy bills having rocketed by 21 per cent in the last year, any help consumers can get from their supplier could be a lifeline. Luckily, there are a number of schemes and discounts available, but unfortunately not nearly enough is being done to promote them. Figures from Ofgem show that between 25 and 30 per cent of households should be benefiting from help from their suppliers, but less than 10 per cent actually are.

“Of course any help with paying energy bills will come at a cost to suppliers, which goes some way to explaining the poor way any schemes are promoted.”

Citizens Advice Scotland (CAS) is to highlight the problem as part of the Big Energy Week campaign – beginning on Monday – helping people to cut their energy bills and raising awareness of the help available.

Matt Lancashire, social policy officer at CAS, said: “Big Energy Week is about trying to promote these schemes, but we would like energy suppliers to promote them more heavily. They could do more to make vulnerable consumers aware of them.”

So what help – other than the warm home discount scheme – do the various energy companies offer? All suppliers are obliged to provide social tariffs (equal to their cheapest rates) to help their most vulnerable customers.

For example, British Gas’s Essentials social tariff aims to cut energy bills for up to 750,000 of its most vulnerable customers. The rate is equal to the supplier’s lowest tariffs and means many of those customers can cut their bills by more than £300.

Similarly, Scottish & Southern Energy’s EnergyPlus Care plan gives households in fuel poverty a 20 per cent discount on their current fuel prices, free energy efficiency advice and a benefits check.

Most suppliers have energy efficiency grants to help with the cost of measures such as insulation. E.ON recently launched an offer of free insulation plus £100 to recipients of child tax credit where income is less than £16,190 or to anyone claiming pension credit. It claimed the average home can lower their bills by up to £390 a year by putting effective loft and cavity wall insulation in place.

E.ON also has a tariff in conjunction with the Age UK charity that provides extra cold weather payments for gas customers aged 60 or over, based on the number of days the temperature drops below freezing.

Npower (which has 210,000 customer households in Scotland) said it has installed more than 37,000 insulation measures north of the Border over the past three years.

It also helps about 500 customers affected by cancer and in fuel poverty, through a partnership with Macmillan Cancer Support and – like all suppliers – has a free helpline giving advice on energy efficiency.

The UK’s biggest supplier, British Gas (Scottish Gas north of the Border) claims to have invested more than £70 million in supporting vulnerable customers in the year to last April, including a £50 rebate last January to the most at-risk households. In addition, the British Gas energy trust provides grants for households falling behind on energy payments and other household bills, which it claims to be on offer to anyone “in need, hardship or other distress”.

Scottish Power’s older customers receiving certain benefits can qualify for its Fresh Start tariff, which it claims “combines lower prices with energy efficiency and income maximisation advice”. It is part of a range of measures aimed at helping vulnerable households.

A spokesman for Scottish Power said: “Our aim is to make life safe, warm and comfortable for all our customers but in particular older people, families with young children, those with disability or long-term physical or mental illness and customers in severe financial difficulty.”

However, there remains a gulf between the availability of the various supplier-run schemes and public awareness of them, argued Trisha McAuley, deputy director of Consumer Focus Scotland. “We know that when vulnerable people receive help such as cheaper social tariffs or free insulation it can make a significant impact to their fuel bills. However, sadly, not everyone who should be getting the help actually receives it,” she said.

“It is clear that there needs to be more integration between the help being offered, and suppliers need to ensure information on the help that they can offer is easy for consumers to find and understand.”

Away from suppliers, there are several government schemes aimed at helping struggling households.

In Scotland the Energy Assistance Package has grants for boiler replacement and home insulation, open to people aged 60 or over, those receiving benefits, pregnant women, people with children under five or with a disabled child under 16. It also offers a free home energy assessment (open to anyone), a tax benefit and credit check.