Recommendation 3

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 the energy support schemes will cost £69 billion, meaning that even relatively low rates of fraud and error will lead to significant loss to taxpayers. The risk of fraud and error is greater for the EBRS due to the complexity of the energy market for the non-domestic sector. For example, energy usage and intensity vary significantly more between different industries within the non-domestic sector than between households. The risk of fraud and error is also higher for targeted schemes such as the EBSS Alternative Funding Scheme, which has specific eligibility criteria and where consumers need to apply for the scheme, than in the schemes which are open to all customers. The Department drew on its lessons learnt from the pandemic and collaborated with the Public Sector Fraud Authority (PSFA) from the outset of the schemes and is working with local authorities to verify applicants’ eligibility for the EBSS Alternative Funding Scheme. The Department does not yet have an estimate of fraud and error has occurred through the schemes. The transfer of responsibilities from the former Department for Business, Energy & Industrial Strategy (BEIS) to the Department for Energy Security and Net Zero risks a lack of continuity in the approach to identifying and recovering payments through fraud and error. Recommendations 3a: The Department should, within 6 months, write to the Committee setting out fraud and error rates under the schemes and what it is doing to reduce this. Recommendation 3b: The Department should, within 6 months, write to the Committee outlining how it will ensure the lessons it has learnt from the energy schemes are not lost as BEIS splits into three separate entities.