Energy Bills Support

Public Accounts Committee Closed Inquiry
Opened: 18 Jan 2023 Closed: 24 Sep 2023 Parliament page
In September 2022 Government announced the Energy Price Guarantee Scheme and Energy Bill Relief Scheme in response to the energy price crisis. Following on from work done by the National Audit Office on Energy bill support , the Committee will question senior officials at the Department for Business, Energy and … Read more
3 Recommendations
25 Conclusions
1 Report
2 Oral sessions
5 Letters
2 Events
Activity timeline 11 events
24 Sep
2023
Report published
7 Sep
2023
Correspondence
16 Jun
2023
Report published
17 Apr
2023
Correspondence
17 Apr
2023
Correspondence
28 Mar
2023
Correspondence
21 Mar
2023
Correspondence
27 Feb
2023
Oral evidence
27 Feb
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
23 Feb
2023
Oral evidence
23 Feb
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Oral evidence sessions 2 sessions
27 Feb 2023
View on parliament.uk
Energy bills support
James Bowler CB · HM Treasury Jeremy Pocklington CB · Ministry of Defence Jonathan Mills · Department for Energy Security and Net Zero Phil Duffy · HM Treasury Sarah Munby · Department for Business, Energy and Industrial Strategy
23 Feb 2023
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Energy bills support pre-panel
Andy Manning · Citizens Advice Dhara Vyas · Energy UK Kate Nicholls · UK Hospitality Paul Wilson · Federation of Small Businesses
Title HC No. Published Items Response
Fifty-Eighth Report - Energy bills support HC 1074 16 Jun 2023 28 Responded
Recommendations & Conclusions
18 results
Clear
2 Recommendation Accepted
Fifty-Eighth Report - Energy bills…
Publish analysis of unredeemed energy vouchers and actions to increase household redemption rates.
The Department is still not doing enough to ensure that support reaches the two million consumers on prepayment meters. Those on prepayment meters are typically on more expensive energy tariffs due to the cost of the systems used to run … Read more
Government Response
The government provided analysis identifying low voucher redemption in urban areas, socially rented properties, and ethnic/multicultural areas. It took further actions including focused communications, coordinated media campaigns, and a ‘National claim your voucher day’, which improved redemption rates from 76% to 85% by May 2023.
HM Treasury
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3 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Report on fraud and error rates in energy support schemes and plans for reduction.
The Department drew on lessons it had learnt from financial support it provided during the pandemic to reduce the risk of fraud and error of the schemes, but does not yet know how successful this has been. The Department estimates … Read more
Government Response
The government agrees, stating that teams working on energy support schemes have transferred to the new department to ensure lessons learned are not lost. It describes how experience is being used to improve future delivery and how lessons are captured and shared through individual schemes and a cross-cutting exercise. The response does not address fraud and error rates.
HM Treasury
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5 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Provide update on household energy affordability plans for winter 2023-24 and future scheme reforms.
The Department does not yet know how its plans for winter 2023–24, or once support ends in April 2024, will impact households, or how it will ensure the energy retail market provides a fair deal for consumers. At the time … Read more
Government Response
The government states it will keep the Energy Price Guarantee (EPG) in place as a safeguard for winter 2023-24 and continue the Energy Bills Discount Scheme (EBDS) for non-domestic customers. It has also committed to £900 in cost-of-living payments for vulnerable households and decided not to cap support for high energy users, keeping the EPG universal.
HM Treasury
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6 Recommendation Accepted
Fifty-Eighth Report - Energy bills…
Set out timeline for REMA and plan to enhance electricity sector resilience against price shocks.
We are very concerned about the Department’s lack of urgency in addressing the energy market failures that are leading to high energy bills for consumers. During 2022–23, the UK experienced record-high wholesale gas prices. Since 2019, Ofgem has set a … Read more
Government Response
The government plans a second REMA consultation in Autumn 2023, with overall timescales varying by reform complexity. It explains REMA will consider options to shield consumers from price spikes and notes the Contracts for Difference (CfD) scheme already provides insulation.
HM Treasury
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23 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Ofgem energy price cap significantly increased due to rising wholesale energy costs.
Since 2019, the Office of Gas and Electricity Markets (Ofgem) has set a price cap on the price per unit of gas and electricity for customers on standard default tariffs, which apply to consumers who have not signed up for … Read more
Government Response
The government agrees with the observation, stating the price cap is now £2,074 for Q3 2023 and is forecast to fall. It confirms the Energy Price Guarantee (EPG) will remain a safeguard over the coming winter and outlines existing cost-of-living payments, while deciding not to cap support for high energy users to maintain universal access.
HM Treasury
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11 Recommendation Accepted
Fifty-Eighth Report - Energy bills…
Ensure administrative barriers do not hinder timely energy support for prepayment meter customers.
Prepayment meter customers pay for their energy in advance by topping up a meter with a smart card, ‘key’ or cash token. Those on prepayment meters are typically on more expensive energy tariffs due to the cost of the systems … Read more
Government Response
The government agrees that the recommendation has been implemented, explaining it closely monitored Energy Bills Support Scheme voucher payments, published data, and conducted focused communications and a media campaign to improve redemption rates for prepayment meter customers from 76% to 85%.
HM Treasury
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12 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Government and suppliers launched campaigns to increase prepayment meter voucher redemption rates.
In response to our report, in January 2023, the government told us that energy suppliers had sent vouchers to all two million customers who had a traditional prepayment meter. It explained that it was urging customers to redeem vouchers through … Read more
Government Response
The government agrees the observation is implemented, having monitored voucher payments, used data for focused communication campaigns, and observed improved redemption rates for prepayment meter customers.
HM Treasury
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13 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Significant regional disparities observed in energy support voucher redemption rates.
We asked witnesses about the take-up rates for the vouchers. The Department told us that 76% of vouchers had so far been redeemed across Great Britain. It accepted that take- up was lower in metropolitan areas, and that the take-up … Read more
Government Response
The government agrees the recommendation is implemented, detailing its close monitoring of Energy Bills Support Scheme voucher payments and its efforts, including targeted communications and a media campaign, which led to an increase in voucher redemption rates from 76% to 85%.
HM Treasury
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15 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Rapid implementation of energy schemes created initial high fraud and error risks.
The Department had to design and implemented the schemes at speed to ensure they were in place for winter 2022–23. The Department took three weeks to implement the EPG and two months for the EBRS. At the start of the … Read more
Government Response
The government agrees, stating it takes fraud and error risks seriously and is continuing proactive work with the Public Sector Fraud Authority to detect and reduce instances, and will work with external scrutiny providers to provide the Committee with latest estimated rates.
HM Treasury
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16 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Department leveraged pandemic experience and PSFA collaboration to mitigate energy scheme fraud risks.
The Department drew on lessons learnt from its financial support schemes during the pandemic to reduce the risk of fraud and error in the schemes.37 The Former Permanent Secretary told us that the Department’s previous experience from support schemes led … Read more
Government Response
The government agrees, confirming its ongoing efforts to detect and reduce fraud. It further commits to writing to the Committee by the end of 2023 to outline how lessons learned from the energy schemes will be preserved and shared for future delivery.
HM Treasury
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17 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Universal energy schemes with no application process presented lower inherent fraud risks.
The Former Permanent Secretary told us that while the Department was “acutely conscious” of the fraud risks within the schemes, it thought that the design of the energy support schemes meant that the risks of fraud were much lower than … Read more
Government Response
The government agrees with the observation, affirming its serious approach to fraud and error risks. It commits to continuing proactive work to detect and reduce fraud and error, and will work with external scrutiny providers to provide the committee with the latest estimated rates.
HM Treasury
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18 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Non-domestic energy support schemes face higher fraud risks due to market complexity.
The NAO found that the risk of error was greater for EBRS than for EPG because the non-domestic energy market is more complex, less regulated by government and has a wider range of consumers. For example, energy usage and intensity … Read more
Government Response
The government agrees with the observation, affirming its serious approach to fraud and error risks and its ongoing proactive work to detect and reduce instances in energy affordability schemes, promising to provide estimated rates.
HM Treasury
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19 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Department lacks estimates of overpayment rates for energy support schemes and evaluations.
We asked the Department whether it had an estimate of the rate of overpayment within the schemes. Both the Former Permanent Secretary and the Department told us that they did not have an overpayment figure, but that overall, the Department … Read more
Government Response
The government agrees with the committee's observation, affirming its serious approach to fraud and error risks in the schemes. It commits to continuing proactive work to detect and reduce fraud and error, and will work with external scrutiny providers to provide the committee with the latest estimated rates.
HM Treasury
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20 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Inconsistent sector inclusion in energy support schemes raises questions about criteria and understanding.
In April 2023, the government will replace the Energy Bill Relief Scheme with the Energy Bill Discount Scheme. This will support businesses for 12 months from April 2023 by providing a discount on their energy bills if wholesale prices are … Read more
Government Response
The government, perceiving an implicit recommendation, states it agrees and has implemented it. It outlines that HM Treasury carefully considers tax system impacts, DESNZ will publish monthly EBDS discount scales, and an evaluation of energy support schemes is being commissioned, with findings due by summer 2025.
HM Treasury
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21 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Reduced energy support risks businesses closing and wider economic objectives for government.
The reduced support could risk the Department achieving its wider economic objectives for the EBRS, such as reducing the effect of inflation and protecting jobs.48 The Federation of Small Businesses (FSB) told us that if energy prices remained high and … Read more
Government Response
The government, perceiving an implicit recommendation, states it agrees and has implemented it. It details ongoing actions including reviewing the tax system, engaging with stakeholders, and commissioning an evaluation of the Energy Bill Discount Scheme and Energy Bill Relief Scheme.
HM Treasury
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22 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Government provides diverse financial support to businesses beyond energy specific schemes.
HM Treasury told us it was providing a range of support to businesses and the public sector through a number of measures, not just the energy support schemes. For example, it pointed to support provided through: covid support schemes; a … Read more
Government Response
The government, perceiving an implicit recommendation, states it agrees and has implemented it. It outlines its commitment to reviewing the tax system and reliefs, engaging with stakeholders, and commissioning an evaluation of the energy support schemes, confirming that the EBDS will provide a discount for 12 months.
HM Treasury
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24 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Rising energy bills and EPG cap increase push more households into fuel poverty.
At the time of our evidence session, household bills were protected by the EPG cap at £2,500 until the end of March 2023, which will increase to £3,000 from April 2023 to March 2024.57 HM Treasury told the NAO that … Read more
Government Response
The government agrees with the conclusion, stating the price cap is £2,074 for Q3 2023 and prices are forecast to fall. It confirms the Energy Price Guarantee (EPG) will remain a safeguard over the coming winter and the Energy Bill Discount Scheme (EBDS) will continue for non-domestic customers until March 2024.
HM Treasury
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27 Conclusion Accepted
Fifty-Eighth Report - Energy bills…
Review of Electricity Market Arrangements lacks clear timeframe, risking future consumer energy costs.
We asked witnesses about the effectiveness of the marginal pricing system and whether what customers were being charged reflected the cost of producing the energy they used. The Department told us that it was looking into this issue through its … Read more
Government Response
The government states it agrees with the committee's implied recommendation and commits to publishing a second REMA consultation in Autumn 2023, with a target implementation date for this step by Autumn 2023. It will also take quicker decisions on shorter-term reforms, while acknowledging that the overall REMA timescale depends on reform complexity.
HM Treasury
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Government Response AI assessment · 28 of 3 classified
Accepted 18
Acknowledged 5
Deferred 3
Not Addressed 1
Rejected 1
Total 3 recs + 25 conclusions
Correspondence 5 letters
7 Sep 2023 Correspondence from James Bowler, Permanent Secretary, HM Treasury, re Additional information: Recommendation 4a Forty-eighth Report of Session 2022-23 (Energy Bills Support), dated 14 August 2023
Parliament page
17 Apr 2023 Correspondence from Rt Hon Grant Shapps MP, Secretary of State, Department for Energy Security and Net Zero, re Contingent Liability Notification: Energy Bills Discount Scheme, dated 27 March 2023
Parliament page
17 Apr 2023 Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Energy Security and Net Zero, re Energy Bills Discount Scheme, dated 28 March 2023
Parliament page
28 Mar 2023 Correspondence from James Bowler, Permanent Secretary, HM Treasury, re follow up to question raised at the Public Accounts Committee on Energy Bills Support on 27 February 2023, dated 16 March 2023
Parliament page
21 Mar 2023 Correspondence from Jeremy Pocklington CB, Permanent Secretary, Department for Energy Security and Net Zero, re Energy Bills Support, dated 10 March 2023
Parliament page