6 February 2025 - Energy Bills Support - Oral evidence

Average annual household gas and electricity bills rose from £1,277 in winter 2021-22, to over £4,000 by the start of 2023. To protect against steep energy bill price rises, DESNZ implemented a number of support schemes from 2022-24 at a cost of £44 billion. The schemes were generally viewed as successful with comparatively low levels of fraud and error. 

However, a report by the NAO found that fewer than 20% of UK households eligible for the Energy Bill Support Scheme Alternative Funding applied, and take-up of the Alternative Fuel Payment Alternative Fund was around 21%. The findings show that uptake was particularly low in groups typically deemed ‘harder-to-reach’, such as those in care homes and park homes. The PAC could ask what more can be done to ensure better uptake of similar schemes in future, particularly for vulnerable groups. 

According to DESNZ estimates, the number of households considered as being in fuel poverty increased from 4.3 million in 2020, to 8.9 million in 2023. Though this number is expected to go down as prices are projected to decrease, the PAC may question if enough is being done to support households in fuel poverty and question what steps are being taken to prevent this number from increasing. It may also explore what is being done to build resilience into the current energy system to protect against unexpected price rises. 

The NAO’s report also highlighted a distinct lack of understanding of the varying needs of non-domestic energy customers, as businesses with vastly different energy consumption were initially provided the same level of support. Given the universal nature of the schemes, the PAC will likely question the value for money of the funds used and ask if DESNZ should take a more targeted approach in future.