Written evidence submitted by Mencap (WIN0019)

About Mencap

Mencap’s vision is for the UK to be the best place in the world for people with a learning disability to live happy and healthy lives. We do this by supporting the 1.5 million people with a learning disability in the UK and their families, improving access to health and care services, education, and employment. 

A learning disability is caused by the way the brain develops before, during or shortly after birth. It is always lifelong and affects intellectual and social development. 

 

Summary

This response to the DESNZ Committee inquiry into ‘Preparing for Winter outlines our views on existing energy bill support, supplier and Ofgem actions and the regulatory framework as listed in the call for evidence. Our recommendations aim to help improve fairness in the energy market for people with a learning disability, their families and carers as they grapple with significant energy affordability issues.

Key points and recommendations:

 

Introduction

During the cost of living crisis, utility costs have quickly become completely unaffordable for many disabled households, with 57% of disabled people reporting that their income does not, or only just, covers their energy bills.[1] However, this is not a new trend; instead it is the latest chapter in a long term story of financial hardship for many people with a learning disability. A third of disabled people live in poverty[2] and disabled households already have to pay, on average, an additional £975 a month to have the same standard of living as households without somebody with a disability.[3]

 

These additional costs are in part because the energy requirements of households of people with a learning disability typically go beyond the needs of the average household; over a third of disabled adults report that their impairment or condition has had an impact on their energy use.[4] Mobility and hygiene needs can require increased consumption of electricity, for example, to run electric wheelchairs and scooters, or frequent use of washing machines and tumble driers. Some people with a learning disability have additional health barriers, requiring medical equipment like oxygen concentrators, ventilators, sensory mats that detect seizures, feeding pumps, saturation monitors, or dialysis machines, which require constant charging. Higher energy needs are not solely due to medical requirements either; many people with a learning disability have vital sensory needs that might involve significantly increased use of electrical devices and some PWLD need homes to be heated to a high temperature for longer because they receive 24-hour support from carers.

 

Despite these vital energy needs, many people with a learning disability have been forced to take drastic action: over a third (38%) of Mencap survey respondents said they hadn’t put their heating on despite being cold and over a quarter (26%) reported not switching the lights on to save money.[5] Fuel poverty rates for disabled households are 60% higher than for households that don’t contain a disabled resident[6] and over 8 in 10 low-income households with a person who has a learning difficulty or cognitive disability went without essentials such as energy from November 2022-May 2023.[7]

 

Such intense and prolonged financial pressure can take a real toll. As the case study below illustrates, the lack of a support package in place to help people with their bills this winter is further fuelling the stress and anxiety disabled households are facing.

 

 

 

Ofgem’s forthcoming price cap announcement is likely to mean that bills will remain incredibly high, 60% higher than in winter 2021.[8] These bills will compound existing challenges with energy debt from winter 2022 - almost half of all households with a disabled person are in arrears with at least one household bill such as energy.[9] Now more than ever, it is ss vital that Government, Ofgem and energy suppliers learn from the lessons of winter 2022 and ensure that suitable levels of energy affordability support and customer service are in place for winter 2023.

 

 

 

 

What role did the UK grid play in the high domestic prices of winter 2022-23?

No response.

What more could have been done to prevent price shocks being passed to consumer bills?

There is a plethora of measures that could have been introduced to prevent price shocks from being passed to the disproportionately high bills of disabled consumers.

 

  1. Delay or change price cap frequency.

1.1.   Whilst intended as a money-saving measure for consumers, changes to the frequency of the Ofgem energy price cap calculation have compounded price shocks for disabled customers. The move to a quarterly price cap put vulnerable customers at extreme risk as it meant that increases would be inevitable during the coldest months of the year in the event of an increase in wholesale prices.

1.2.   Ofgem and the Government should have fully assessed the potential impacts for high energy users such as disabled people and should reverse this change so that prices are not able to increase during the coldest periods.

 

  1. More targeted and substantial energy support for disabled people

2.1.   Price shocks could also have been prevented from being passed to disabled consumers bills through more targeted, comprehensive energy bill support.

2.1.1. Whilst measures such as the Energy Bill Support Scheme and Energy Price Guarantee offered welcome support, their universal nature did not account for the significantly increased energy use of people with a learning disability.

2.1.2. Measures that required online applications such as EBSS AF risked excluding digitally excluded disabled people and schemes which required voucher redemption brought accessibility barriers for many.

 

2.2.   To ensure price shocks were not passed onto the bills of vulnerable customers, the Government should have introduced a mandatory and progressively funded social tariff which would have provided targeted price support through a fixed discount on the unit rate of gas and electricity for low-income and vulnerable households. [10]

2.2.1. This should have been implemented alongside the existing price cap and Warm Home Discount (WHD). Both policies perform different specific functions – the WHD gives a flat payment in winter, whereas a social tariff is a reduction on the unit rate, which scales with usage and gives a discount all year round so energy is affordable in all seasons.

2.2.2. A social tariff should have been universally applied across the sector so disabled households weren’t exposed to postcode lotteries or variable supplier support.

2.2.3. DESNZ should have assessed and identified eligible recipients without their active participation, so they are automatically enrolled and don’t have to navigate complex application processes.  Additional self-referral and third-party referral routes should also have been available, such as by a GP or social care professional to ensure that people with a learning disability and their carers didn’t fall through gaps in energy support provision.

2.3.   We asked people with a learning disability and their families and carers how an energy social tariff would impact them: 59% of respondents said that they would be less stressed, 24% of respondents said that they would be healthier and 39% of respondents said that they would be able to spend more money on other essentials.[11]

2.4.   We note the widespread support that a social tariff has from Ofgem,[12] the energy industry and previous BEIS reports[13] and continue to urge the Government to consult and introduce this measure as soon as possible.

 

  1. To ensure price shocks were not passed onto bills of vulnerable customers, Government should also have immediately changed the eligibility criteria of the Warm Home Discount and included recipients of Attendance Allowance, Personal Independence Payment and Disability Living Allowance.

3.1.   As noted above, disabled people have increased energy costs and the disability benefits that were removed from the WHD eligibility criteria are an indicator of that. This policy decision withdrew a useful form of winter support from disabled people when they needed it most.

3.2.   The use of VOA data and wider property characteristics in the current WHD eligibility criteria fails to account for the increased energy use of disabled people and their increased likelihood of experiencing fuel poverty.

Extending WHD for winter 2023/24

3.3.   The amount the average household pays for their energy this winter will be approximately the same or even more than they did last winter.[14] This does not account for the disproportionately high energy bills that disabled people face. As such, it is extremely concerning that the Government has not yet put support in place to ensure that disabled households can safely heat and power their homes through the winter. Therefore, we urge the Government to introduce urgent energy bill support for struggling households alongside the development of a social tariff (see 2.3)

3.4.   As referenced in DESNZ’s Future of energy retail market paper,[15] making the Warm Home Discount more flexible’ is an option being explored. Whilst this would be an imperfect measure, it is a pre-existing mechanism that would be able to deliver immediate support.

3.4.1. Additional energy bill support could be offered through a one-off increase in the existing WHD payment. Alternatively, Government could use data-matching and the WHD model to provide a targeted version of last winter’s EPG to eligible households.

3.4.2. If this model of support is selected, Government must expand the eligibility criteria of the WHD so that people in receipt of disability benefits also qualify. It should also consider removing the requirement that households in receipt of qualifying benefits also have high energy costs to increase the number of low-income households receiving support.

3.4.3. The Government would need to consider how much to increase the payment by, so that it was commensurate with the needs of vulnerable households. Citizens Advice found broad public support for providing a discount of around 30% on energy bills;[16] with the price cap currently set at £2,074, a 30% discount would equate to around £600.

3.4.4. The additional costs of expanding the scheme should not be socialised amongst struggling bill payers through a levy and should be met by the Treasury.

3.4.5. These changes to the scheme could be made easily through secondary legislation[17] to ensure that it delivers higher levels of support to energy customers.

 

How should energy companies respond if customers cannot pay their bills and what actions should they not have recourse to?

  1. First and foremost, energy companies must respond to disabled consumers who cannot pay their bills with compassion, empathy, and accessible tailored support at the earliest opportunity. Staff at all points of the consumer journey should have a good understanding of how to recognise vulnerability and how to support customers with additional communication needs.
  2. Energy companies should develop comprehensive support pathways for disabled customers and should not rely on the limited time and resources of already over-stretched debt-advice organisations and charities. Suppliers should proactively support disabled customers and their households to navigate the industry initiatives on offer from their company and signpost them effectively to Government support.
  3. Energy companies and third parties acting on their behalf should not have recourse to disproportionate debt recovery measures. People with a learning disability and their households should be a protected group within licence conditions and Ofgem should pursue robust enforcement measures for suppliers who breach standards.

 

Has Ofgem got its priorities right in addressing customer protection?

  1. Given its remit, Ofgem has got its priorities broadly right in addressing customer protection and we have welcomed their regulatory focus on vulnerable customers. In policy areas concerning vulnerable customers, we would urge Ofgem to take a more prescriptive approach to customer protection so that there is more clarity, with robust enforcement action.
  2. However, there needs to be recognition of the paucity of data that Ofgem and suppliers hold on disabled customers and their varying needs, consumer vulnerabilities and disability specific issues within the sector.
  3. Ofgem also need to increase the customer protections in place for residents using non-domestic energy as currently there is not parity of standards.

 

6.Is the legislative framework on pricing controls suitable for protecting consumers?

  1. Pricing controls such as the Energy Price Cap are essential; it ensures that disabled consumers on standard variable tariffs know how much they will pay per unit of energy during colder periods. Without it in place, Aprils expected price increases of 50% or more would almost certainly have been added to consumer bills this winter.
  2. However, the cap is a blunt instrument that does not account for the increased energy use that people with a learning disability have. As such, a new, fair price control mechanism like a social tariff needs to be introduced as well (see point 2.2)
  3. Please refer to point 1 for our views on the timing of price control changes and the impact they have on people with a learning disability.

 

Protecting non-domestic consumers

  1. The legislative framework for non-domestic customers has also not been suitable for protecting some customers with a learning disability. Some domestic settings such as care homes and supported living services that work with people with a learning disability are affected by the ‘commercial supply trap’; they fall between the cracks of domestic and commercial contract types as they rely on commercial supply contracts for their energy or have their energy costs included in their rent or collective bills.
  2. We are concerned that people with a learning disability who use these services are facing energy affordability issues and seeing their rent/service charges unavoidably rise to cover the increased energy costs of the care home or housing provider. We are aware of instances where residents with a learning disability have been faced with service charge increases of 130% due to energy cost increases.
  3. In these instances, residents with a learning disability do not have access to a domestic consumer regulatory framework. As such, we recommend that these social care settings are re-defined due to the (domestic) purpose of their households and not their energy contract type, so these consumers can be re-classified as domestic consumers and benefit from resultant price controls and bill support. 
  4. Residents also do not have access to adequate government energy bill support: 4 in 5 eligible people missed out on the £400 EBSS AF payment.[18] The un-claimed funds need to be re-invested in an improved, more accessible scheme for this winter so that non-domestic customers are protected from price increases too.

August 2023


[1] Scope, Cost of living: the impact for disabled people. (2022) https://www.scope.org.uk/campaigns/research-policy/cost-of-living-report/

[2] Joseph Rowntree Foundation, UK Poverty Report (2022)

[3] Scope, The Disability Price Tag Summary Report (2023)

[4] Scope, Cost of Living Report (2022)

[5] Mencap Cost of Living web survey, Jan 2023

[6] DESNZ. Fuel poverty detailed tables 2023 (2022 data). Department for Energy Security and Net Zero. [Online]. Available at: https://www.gov.uk/government/statistics/fuel-poverty-detailed Table 26.

[7] Joseph Rowntree Foundation, https://www.jrf.org.uk/blog/our-social-security-system-must-support-households-disabled-person-afford-essentials  Accessed 23/08/23

[8] Ofgem (2023) Default Tariff Cap Breakdown of the default tariff price cap (for a dual-fuel, direct

debit customer with typical consumption).

[9] Joseph Rowntree Foundation, https://www.jrf.org.uk/blog/our-social-security-system-must-support-households-disabled-person-afford-essentials, Accessed 23/08/23

[10] Age UK/NEA joint letter to the Chancellor signed by over 90 charities, sent on 17th January 2023 https://campaigns.ageuk.org.uk/page/120388/action/1?ea.tracking.id=co-signer Accessed 23/08/23

[11] Mencap, Social Tariff survey, May 2023

[12] Ofgem social tariff support letter

[13] BEIS, Energy Pricing and the future of the energy market,(2022) https://publications.parliament.uk/pa/cm5803/cmselect/cmbeis/236/report.html Accessed 23/08/23

[14] Citizens Advice, Winter Warning, https://www.citizensadvice.org.uk/about-us/our-work/policy/policy-research-topics/energy-policy-research-and-consultation-responses/energy-policy-research/winter-warning-the-urgent-case-for-energy-bill-support-this-winter/ Accessed 23/08/23

[15] https://www.gov.uk/government/publications/delivering-a-better-energy-retail-market, Accessed 23/08/23

[16] Citizens Advice, Social Market Foundation and Public First (2023) Fairer, warmer, cheaper: new

energy bill support policies to support British households in an age of high prices page 27

[17] Energy Act 2010 Section 9

[18] https://www.ageuk.org.uk/latest-press/articles/2023/4-in-5-of-all-those-eligible-for-the-energy-bills-support-scheme-alternative-fund-missing-out/#:~:text=New%20figures%20published%20by%20Age,in%205%20of%20all%20those Accessed 23/08/23