Energy price cap: Councils 'paralysed by inaction' as public sector waits on government intervention around energy prices

Scottish councils have been left “paralysed” by a lack of clarity around the scale and speed of potential government intervention to mitigate the energy price spike, with key decisions about support yet to be made.

Local authorities across Scotland have been discussing the possibility of ‘warm rooms’ for several months, but decisions on the scale of the provision of support for those hardest hit by price rises have yet to be taken.

Many councils, when asked by The Scotsman, said reports on winter support were set to be discussed by councillors during September.

These decisions will likely take place as either Liz Truss or Rishi Sunak gets established in Number 10 as the new prime minister and without full understanding of a potential emergency budget to tackle the cost-of-living crisis.

Ofgem on Friday announced a 80 per cent rise in the cap on energy prices, which will send the bill for the average household bill from £1,971 to £3,549 from October.

However, families will pay more if their usage is higher than average.

It comes as Scottish Power chief executive Keith Anderson warned the price cap rise would be “truly catastrophic” for millions, while Nicola Sturgeon claimed the spike was “simply unaffordable”.

Gas and electricity prices are set to rise by around 80 per cent following Ofgem's announcement of the new price cap.

Mr Anderson stressed only a big solution could “shelter people from the worst this winter”.

Net zero Cabinet secretary Michael Matheson labelled the crisis a “public emergency” and said the “only acceptable course of action” was intervention from the UK Government in the form of a cancellation of the increase for all households.

But Chancellor Nadhim Zahawi suggested households needed to look at how they were using energy as he said the UK Government was working to develop more options to support households.

The revised price cap was confirmed as leading energy consultancy Auxilione delivered a further grim forecast, warning the energy price cap could top £7,000 by April next year.

The prediction is based on the current cost of buying energy on global markets and also sees bills hitting £5,405 in January.

Local authorities across Scotland have said they are still considering whether support such as ‘warm banks’ are appropriate for the coming winter.

‘Warm banks’, where public buildings are opened up to vulnerable people or those struggling to heat their homes, could yet be implemented across Scottish councils in coming months.

Susan Aitken, SNP leader of Glasgow City Council, where almost half of the population live in the 20 per cent most deprived communities in Scotland, said the local authority was “doing what we can with the resources we have”.

She said the council was “supporting citizens with fuel top-up payments” to putting in place plans for “warm banks” in libraries, community centres and other public buildings. "But these are sticking plasters, not solutions,” she said.

Other councils considering the implementation of ‘warm banks’ include Edinburgh, Dumfries and Galloway, and Perth and Kinross. However, no council has finalised plans.

Fife Council said a “full report” on the introduction of support measures for winter and tackling poverty would be considered by councillors in September, including whether a ‘warm spaces’ scheme should go ahead over autumn and winter.

Many local authorities, however, are yet to make final decisions on winter provision despite the rise in energy bills set for October.

Highland Council declined to comment on their planned provision due to the matters having not yet been considered by councillors.

A spokesperson for Falkirk Council also raised concerns about ‘warm banks’ stigmatising those who are struggling with fuel costs.

South Lanarkshire Council complained about a lack of funding from the Scottish Government.

Cleland Sneddon, the council’s chief executive, said: “The Scottish Government has told us to expect a flat cash settlement in terms of our grant, despite inflation driving our own costs up by 10 per cent, and rising.

"This inevitably will limit what we can do as we continue to support our residents and we would urge all local politicians to help us make the case for a fair settlement for local government, to properly fund the vital services we provide and ensure we can pay our staff a wage that reflects the current cost-of-living crisis.”

Scottish Labour local government spokesperson Mark Griffin said: “Councils are crucial to helping people through this cost-of-living crisis, but the lack of leadership from SNP and Tory governments has left them paralysed.

“With bills soaring and winter fast approaching there is no time to waste, but both of our governments are still missing in action.

"Every layer of government should be working together and using the powers they have to stave off this looming catastrophe – but councils are working with one hand tied behind their backs.”

Councils are not expected to see immediate significant budgetary impacts from energy price rises due to pre-purchasing of energy, but could see sharp increases the longer high prices continue.

However, Edinburgh City Council have estimated a potential budget pressure of £9m rising to £15m by 2023/24 if prices continue to increase.

Highland Council made a budget provision for an additional £3.1m for this year in March. The authority said it estimated a 60 to 70 per cent increase in energy costs when its existing contract expires in two years’ time.

Health boards were also asked what they were doing to plan for the coming combined crises of winter, Covid-19 and a cost-of-living crisis.

NHS Greater Glasgow and Clyde said such work was “well underway” and involved “factoring in the potential impact of the current situation around cost-of-living and additional winter pressures caused by Covid-19”.

Craig Cunningham, NHS Lanarkshire’s winter planning lead, said: “Every winter brings pressures on our health services with potential increases in norovirus, colds and flu and other winter illnesses. This year will be even more challenging having to deal with any potential increase in the number of Covid-19 cases.

“We are currently working on our winter plan to ensure we are as well prepared as we possibly can be and to ensure a rapid and effective response to the periods of greatest pressure.”

NHS Grampian warned the coming months would be a “tough winter” and work was ongoing to “build our resilience”.

Asked about the potential of increased costs for health boards, a Scottish Government spokesperson said: “Increased energy costs are just one of a range of cost pressures NHS boards need to manage, and no NHS buildings will close as a result of this.

"Our NHS Climate Emergency and Sustainability Strategy will support boards to implement energy efficiency measures and generate on-site renewable electricity.

"We are investing at least £200m in our Green Public Sector Estate Decarbonisation scheme to increase public sector energy efficiency and reduce emissions and energy costs.

“We also need meaningful action by the UK Government to address the problem at source and stem this crisis.”

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