The Warm Home Discount Scheme

The Warm Home Discount Scheme

This Commons Library Briefing Paper looks at the Warm Home Discount scheme (WHD). The scheme started on 1 April 2011 and was originally to end on 31 March 2015. Since then it has been extended twice, first until 2015/16 and most recently until 2020/21.

The WHD scheme is part of the measures designed to help those in fuel poverty; further discussion can be found in the Commons Briefing Paper Fuel poverty.

Information on sources of help for constituents with domestic energy bills can be found in the Library Briefing Paper Help with energy bills. The Commons Library Briefing paper on The Energy Company Obligation sets out details of funding to improve energy efficiency in the homes of ‘those most in need’ and in difficult to treat housing.

Outline of the WHD scheme

The scheme offered a rebate on electricity bills, of £120 in year 1, rising to £140 in year 4 (it is at this level now). The funding comes from the participating energy suppliers and it is assumed they then pass these costs on to all consumers through their energy bills.

The original scheme replaced earlier voluntary social tariffs offered by energy suppliers and was first suggested by the Labour Government before being introduced by the Collation Government.

The scheme is aimed at two distinct groups.

• The “Core Group” consists of older pensioner households on low-incomes who are in receipt of the guarantee element of pension credit; it is a clearly defined group.
• The “Broader Group”; this is largely left to energy suppliers to define, within a framework set by Ofgem and the relevant Regulations.

The WHD has been generally welcomed, though several voluntary organisations raised concerns during the original consultation period in 2010 as well as post-implementation. In particular they argued that the limited funding for the Broader Group and its discretionary nature may not help many who fall into less well defined vulnerable groups, notably families in fuel poverty with small children or those with disabilities.

Extension to 2015/16

The extension of the scheme to 2015/16 extended the eligibility criteria for the ‘Broader Group’ of the scheme.

Extension to 2016/17 and to 2020/21

On 8 April 2016, the Government published its consultation document on an extension to the scheme for 2016/17 (Warm Home Discount Scheme: extension to 2016/17)  and an impact assessment . The Government proposes to keep the scheme unchanged for 2016/17 in respect of the Core and Broader Groups. Further details for the period to 2020/21 are to follow in 2017 and are expected to be linked more closely to other fuel poverty initiatives.

Scotland

It is proposed that the Scottish Government will have some powers with respect to the Warm Home Discount though the way the money is raised will remain a reserved power.