Source · Select Committees · Scottish Affairs Committee
Recommendation 3
3
Acknowledged
Paragraph: 33
Blanket energy support failed to 'rural-proof' for Scottish households, disadvantaging off-grid users.
Conclusion
The unprecedented package of financial support delivered to households across Great Britain by the UK Government last winter was welcome and helped to mitigate the full impact of the dramatic energy price increases experienced during the period. However, the Committee heard that the blanket level of energy support provided was not sufficiently “rural-proofed”–it did not account for additional costs required for many households in rural Scotland. Energy schemes prioritised administrative ease to accelerate funds getting to people over specific targeting. Whilst understandable in the context of the immediate crisis, a system of support more tailored towards the acute pressures faced by rural communities would have been more effective. In addition, many off-grid users reported unacceptably long waits to receive payments. Support measures need to ensure parity between households connected to the grid and those reliant on alternative fuels.
Government Response Summary
The government acknowledges the Committee's observations regarding the previous winter's energy support not being sufficiently 'rural-proofed'. It explains that schemes prioritised speed over tailoring and highlights existing support for off-grid households through the Alternative Fuel Payment, alongside other cost-of-living measures.
Paragraph Reference:
33
Government Response
Acknowledged
HM Government
Acknowledged
40. The UK Government reacted quickly to protect households from the spike in energy prices caused by Russia’s illegal invasion of Ukraine last winter, with the Energy Price Guarantee (EPG), Energy Bill Support Schemes (EBSS), and the Alternative Fuel schemes. This required the UK Government to devise, develop, and deliver a range of complex and novel schemes at significant pace to ensure that households could receive this vital support as soon as possible. 41. We understand the Committee’s view that support could have been more tailored, but this would have required these novel schemes to be adapted and further complicated. This would have ultimately delayed UK households, including millions of Scottish homes, from receiving vital support. 42. Some of the schemes were particularly impactful in Scotland, such as the Alternative Fuel Payment (AFP), which sat alongside the EPG and the EBSS and supported households that were off grid. 43. The AFP was a complex scheme to deliver, and the UK Government was always committed to providing support to alternative fuel users as soon as possible. The UK Government moved at pace to develop this complex scheme, working closely with various stakeholders. 44. The AFP was designed to be a universal scheme, open to all households who used alternative fuels and were off the gas grid. It provided a £200 payment to GB households that use alternative fuels, helping around two million off-gas-grid households to meet their energy costs over the winter at a cost of £589 million. This was to ensure that households using alternative fuels that would not benefit from the EPG would receive comparable support to account for price increases in alternative fuels. The scheme particularly supported households in rural areas that were not connected to the gas grid and initial support was doubled to £200 in the Autumn Statement to reflect the price rises experienced by people using alternative fuels to heat their homes. 45. The UK Government is continuing to support those most in need this winter with a support package which is comparative whether your household is or is not connected to the grid. Millions of vulnerable households are receiving up to £900 in further Cost of Living Payments, with an extra £150 to those on eligible disability benefits. These payments are in addition to established financial support which is available for low income and vulnerable households this winter through the Winter Fuel Payment, providing an extra cost of living payment which is being paid to pensioner households worth up to £300. This means eligible individuals will receive between £250 - £600, and the Cold Weather Payment which provides £25 during very cold weather. 46. The UK Government continues to provide support through the Warm Home Discount, which provides low-income households with an annual £150 rebate off their energy bill every winter. 47. In the 2023 Autumn Statement, the UK Government announced the biggest increase to the National Living Wage which is worth £1,800 to a full-time worker and will benefit around 2.7 million workers. We also announced the next generation of welfare reforms with benefit payments increasing by 6.7% and pensions by 8.5%. Earlier in 2024, we also announced a tax cut which will benefit around 27 million people, and a household with 2 average earners will save around £1,000 per year.