Warm Home Discount and energy quotes

harrym1byt

Dare I suggest that it would be worth while for the MSE Energy Clubs quotes to include in the calculations, an element for the WHD, maybe via a ticky box?

£140 off your energy costs is a good lump, but only applies to certain suppliers. The comparison does make it clear do and do not support the WHD, but it would be good to see it included in the calculations of which is the cheapest supplier.

Joyful

I would say this should not be done. We have been advised there will be big changes to the scheme next year which will change the criteria of who can claim.
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fredandwilma

Joyful wrote: »

I would say this should not be done. We have been advised there will be big changes to the scheme next year which will change the criteria of who can claim.
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Please do expand.


As far as i can see, the criteria will remain the same, it's the participation threshold which will change, i.e. potentially from 250,000 rebates to 100,000 rebates, which is a significant reduction, less than half, and an expansion of the data matching process - "We want to expand the successful data matching process we currently use for people on Pension Credit, so that in future all energy bill rebates will be provided in the same way, removing the need for consumers to fill out applications." As far as i can see, the rebate will remain at £140 for the next two years 2017/2018, 2018/2019. From 2018 Scotland will have the power to design its own fuel poverty scheme.



I apologise in advance for my confusing post but the link for the consultation isn't working but other links here :





https://www.ofgem.gov.uk/system/files/docs/2016/09/final_whd_supplier_guidance_sy6.pdf


https://www.energy-uk.org.uk/publication.html?task=file.download&id=5775

The Warm Home Discount (WHD) scheme, introduced in 2011, places a legal obligation on larger energy suppliers to deliver support to people living in fuel poverty or a fuel poverty risk group.

Though suppliers have been able to spend up to a maximum of £30m on Industry Initiatives, spending has ranged from £20.1m to £22.3m over the first four years of the scheme. The highest proportion of spending has been on debt assistance, which peaked at 72% of total spend in scheme year 4. The activity under which most customers benefited from Industry Initiatives was energy advice which peaked at 63% of customers benefiting in scheme year 4.

Executive Summary
Since 2011, the Warm Home Discount has helped around 2 million low income and vulnerable households each year by reducing their energy bills at the time of year when it is most needed.
That is why this Government has committed to continuing the scheme until 2021 at current levels of spending - £320m per year rising with inflation.
Over the next five years, we want to build on the success of the scheme, simplifying the way it is delivered and targeting it more accurately at the most vulnerable. And, we want to target the households most at risk of fuel poverty – those on low incomes living in homes which are expensive to heat – while protecting the pensioners who currently benefit. In order to do that, the Government has started a consultation proposing to introduce primary legislation which would allow wider data sharing between Government and delivery bodies such as energy suppliers. Should Government obtain wider data sharing powers, this could pave the way for the Warm Home Discount providing all direct energy bill rebates using data matching from 2017/18. Until that time, we are proposing to keep the Core and Broader Group elements of the scheme unchanged for 2016/17. That would mean that all eligible pensioners on Pension Credit Guarantee Credit would continue to receive £140 off their bills. Under the Broader Group, suppliers would continue to provide £140 rebates to eligible low income and vulnerable households who successfully apply.
We are also proposing to continue the Industry Initiatives element of the scheme where we are proposing some changes in 2016/17. Firstly, we are proposing a cap on the total proportion of its spending each supplier can use on debt assistance (last year suppliers spent over 70%). We are also proposing to enable organisations which create innovative schemes to alleviate fuel
poverty to bid for industry initiatives funding. This will enable innovation in how the most vulnerable are identified and helped as well as providing a simple way for suppliers to meet their
obligations.
In addition, we are proposing to make small operational changes this year which would allow rebates off gas bills and better reflect final spending on rebates for prepayment meter customers. Finally, we are seeking initial views on the future of the Warm Home Discount beyond 2016/17, including on the participation threshold for suppliers.

Consultation Question
2 Do you agree that we should keep the Broader Group element unchanged?

Consultation Question
12 If the scheme is made cheaper to deliver from 2017/18, should the participation threshold be reduced below 250,000 domestic customer accounts? What would be the costs and benefits of such a change?

6.16. For Broader Group, paragraph 6.15 is only applicable where the value of undelivered rebates is required by the supplier to meet its non-core spending obligation, as explained in the scenarios below.

Scenario 1 In SY6 a supplier must provide 100,000 rebates to meet its non-core spending obligation:
 the supplier provided 100,000 rebates by 31 May 2017
 when submitting its end-of-year report 90,000 of these were delivered

39 The Government Response to the WHD consultation 2016/17, response number 48.
Up to 30 September 2017
Suppliers report on the delivery of rebates.
The value of rebates delivered in this report will be used to calculate their non-core obligation for SY7.
1 April 2016 - 31 May 2017
Suppliers provide Broader Group rebates
1 April 2016 - 30 September 2017
Suppliers make one additional reasonable attempt to deliver rebates to customers that have been provided with a rebate, but this has not been redeemed.
Rebates redeemed after the report is provided cannot be counted towards an obligation.
Figure 6: Timelines for monitoring rebate redemption in SY6
Warm Home Discount: Guidance for Suppliers [Version 5.1]
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 on 30 September 2017 the supplier provides a report confirming that 8,000 more of these rebates were delivered, and that the supplier made at least one additional reasonable attempt to deliver the 2,000 outstanding rebates
 we confirm that the supplier’s non-core spending obligation is met for SY6 (assuming all other requirements are met), and
 the value of the 2,000 outstanding rebates is added to the supplier’s non-core obligation for SY7.


Scenario 2 In SY6 a supplier must provide 100,000 rebates to meet its non-core spending obligation:
 the supplier provided 120,000 rebates by 31 May 2017
 when submitting its end-of-year report 100,000 of these were delivered
 the supplier has met its non-core spending obligation for SY6, and the undelivered rebates will not be added to their obligation for SY7
 the supplier may provide a report by 30 September 2017 to confirm that additional rebates were delivered, in which case the value of these rebates can be counted towards the supplier’s 5% overspend and subtracted from the supplier’s non-core obligation for SY7.

Scheme post 2016/17

In the longer term, we will consult on future measures to streamline delivery and to consider whether there are ways to better support fuel poor households in greatest need. This will
consider the potential role for any new data matching powers under new legislation, and how the Warm Home Discount and future supplier obligation (currently the Energy Company
Obligation) can best work together.
Subject to positive progress on data sharing legislation, Government plans to consult formally later this year on whether these wider data matching powers should be used for a schemefrom 2017/18 onwards.
Participation threshold
The current WHD has a simple threshold: all suppliers with 250,000 or more domestic customer accounts on 31 December preceding the next Scheme year have to participate. The threshold
was introduced to reduce barriers to growth, recognising that smaller suppliers would be likely to have higher fixed costs per rebate provided. Suppliers can volunteer to participate in the Core
Group but none have done so in the five years thus far. We do not propose to make any changes to the threshold for participation in WHD for 2016/17 which means that it would remain at 250,000 domestic customer accounts.
In the longer term, should more data sharing be used, Government could make the scheme as a whole cheaper and easier for suppliers to deliver, significantly reducing administrative costs.
In a scenario where all rebates are delivered through data matching, and where the industry initiative component of the scheme offers the option of a simple payment into a central pot, the composition of a supplier’s customer base no longer has a bearing on how difficult it is to meet the obligation. Such changes could create a stronger case for reducing the participation threshold to benefit customers and reduce some of the barriers to switching. Government intends to undertake further analysis of the cost implications for the smallest suppliers of participating in the scheme, and plans to consult on any changes later this year. We would however, appreciate views and evidence on whether the participation threshold should be reduced in future, focusing on the costs and benefits of such a change.

Joyful

Hi Fred and Wilma. Thanks for posting the above. As you can see the government is looking to make changes for next year. It may be that only Core customers on guaranteed pension credit receive the WHD .It may be that they extend the core group to include other benefits. It may be that people will not need to apply. There are many talks between now and next year that will be taking place with the government and energy suppliers to determine the way forward.

fredandwilma

Joyful wrote: »

Hi Fred and Wilma. Thanks for posting the above. As you can see the government is looking to make changes for next year. It may be that only Core customers on guaranteed pension credit receive the WHD .It may be that they extend the core group to include other benefits. It may be that people will not need to apply. There are many talks between now and next year that will be taking place with the government and energy suppliers to determine the way forward.

Thanks Joyful, I see what you mean.

The logical solution would be to have a Core Group only, (including some exisiting broader group customers) accessed from the database they are talking about, (so you would no longer have to apply, either.) I can't see they can exclude all other "vulnerable" customers without a change in legislation?

After all, this is who the scheme is designed to support:

The Warm Home Discount (WHD) scheme, introduced in 2011, places a legal obligation on larger energy suppliers to deliver support to people living in fuel poverty or a fuel poverty risk group.

Mind you, if they are reducing qualifying numbers to 100.000, would this just be for those who would be in the "broader group" if you see what i mean. That really is going to be a huge cutback in those who qualify, at a time they were supposed to be extending qualifying criteria, i.e. for families. It's likely the eligibility criteria will be narrowed, if anything?

I have to say, that isn't how it reads with government proposals.


As I've said already, energy companies haven't even spent their allocation of funding and a huge amount has been spent on debt assistance? So what happens to those "dormant" funds? I guess only the energy companies know, (unless I'm missing some piece of information.) Which i am.

Though suppliers have been able to spend up to a maximum of £30m on Industry Initiatives, spending has ranged from £20.1m to £22.3m over the first four years of the scheme. The highest proportion of spending has been on debt assistance, which peaked at 72% of total spend in scheme year 4. The activity under which most customers benefited from Industry Initiatives was energy advice which peaked at 63% of customers benefiting in scheme year 4.

harrym1byt

I don't see the relevance of the eligibility maybe changing, to my original question....

If you know you qualify, you tick the box, if not you don't. It is often not obvious without some determined digging on a suppliers website, to work out whether they do or do not support the WHD scheme. £140 makes a big difference when comparing energy quotes, so what I am saying is - it should be possible to tick a box and have the site check which suppliers support WHD and provide a quote with and without the WHD.

I agree that presently the entire WHD scheme is an unbelievable mess.

Joyful

I only know that BG spent millions over the allocated funds last year. that is one of the reasons that the scheme will end when the money runs out this year. I do hope something is put in place to help as many people as possible.

[Deleted User]

@harrym1byt
To be fair to the CEC, they do mention against every tariff in your results whether or not the supplier is part of the Warm Home Discount scheme. It has its own column just to the left of the switch/go to site button.

fredandwilma

Joyful wrote: »

I only know that BG spent millions over the allocated funds last year. that is one of the reasons that the scheme will end when the money runs out this year. I do hope something is put in place to help as many people as possible.

The stats say something different, though. If BG spent over the allocated funds last year, according to stats, there was an overall decline in spending, in year 4 of the scheme, (which is why i question what happened to those allegedly, remaining funds?)

This is published by the DECC :-

What has happened so far?
A breakdown of the spending and customers benefiting from industry initiatives under the scheme can be found in table 2 (below). It demonstrates that the spending decreased slightly in Scheme year 2 but more customers benefited from the schemes run by suppliers. In Scheme year 3, the spending increased and more customers benefited from the schemes. Year 4 saw a decrease in spending and number of customers benefiting.
Suppliers chose to spend less than the £30m available for the Industry Initiatives section of the scheme for a variety of reasons. During the first two years, suppliers were able to take this approach as they were able to spend flexibly between the Legacy Spending and Industry Initiatives portions of the WHD. In later years, suppliers have chosen to spend more on Broader Group support.

Table 2 – Total spending on Industry Initiatives during Scheme years 1 – 4



Scheme year Total spending on Industry Initiatives

Year 1 £22.3m

Year 2 £21.9m

Year 3 £22.3m

Year 4 £20.1m


Scheme Year Number of customers benefiting

Year 1 80,801

Year 2 98,739

Year 3 169,186

Year 4 127,269

Though suppliers have been able to spend up to a maximum of £30m on Industry Initiatives, spending has ranged from £20.1m to £22.3m over the first four years of the scheme. The highest proportion of spending has been on debt assistance, which peaked at 72% of total spend in scheme year 4. The activity under which most customers benefited from Industry Initiatives was energy advice which peaked at 63% of customers benefiting in scheme year 4.

harrym1byt

gsmlnx wrote: »

@harrym1byt
To be fair to the CEC, they do mention against every tariff in your results whether or not the supplier is part of the Warm Home Discount scheme. It has its own column just to the left of the switch/go to site button.

Yes, I appreciate that, but I am just suggesting a feature which would be easy to implement and make the comparison more useful to the many.

Many comparison sites do not even consider it worth mentioning whether a supplier does the WHD.

Shavuot

harrym1byt wrote: »

Yes, I appreciate that, but I am just suggesting a feature which would be easy to implement and make the comparison more useful to the many.

Many comparison sites do not even consider it worth mentioning whether a supplier does the WHD.

Good news!

You can now filter results by this option via the Cheap Energy Club :T