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Energy Bills Support Scheme Expands to More Households
The government has announced that more households will be eligible for the Energy Bills Support Scheme (EBSS), which provides a one-off payment of £400 to help with high energy costs.
What is the EBSS and who can apply?
The EBSS was launched in January 2023 as a temporary measure to help low-income households cope with the rising energy prices caused by the global gas crisis. The scheme is funded by the Treasury and administered by the Department for Business, Energy and Industrial Strategy (BEIS).
The scheme initially covered households that receive the Warm Home Discount (WHD), which is a £140 rebate on their electricity bills for those on certain benefits or low incomes. The WHD is automatically applied to eligible customers by their energy suppliers.
However, the government has now opened up the scheme to households that do not have a direct relationship with an electricity supplier, such as those living in park homes, care homes, and social housing with communal heating systems. These households can apply for the EBSS through a secure online portal, which will verify their eligibility and process their payments.
The government estimates that around 900,000 more households will benefit from the scheme, bringing the total number of recipients to 2.7 million. The scheme will run until the end of March 2023 or until the funds are exhausted, whichever is sooner.
How will the EBSS help households with high energy bills?
The EBSS is designed to provide a one-off, non-repayable lump sum of £400 to help households with high energy bills. The payment will be made directly to the bank account of the applicant or their representative, and can be used to pay for any energy costs, such as gas, electricity, or heating oil.
The government claims that the EBSS will help households save an average of 20% on their annual energy bills, which are expected to increase by around £600 this year due to the surge in wholesale gas prices. The energy price cap, which limits what suppliers can charge most customers, is set to rise to £1,976 in April 2023, up from £1,277 in October 2022.
The EBSS is part of a wider package of measures that the government has taken to support consumers and businesses with high energy costs, such as extending the Cold Weather Payment, providing grants for energy efficiency improvements, and offering loans and guarantees to energy suppliers.
What are the reactions to the EBSS expansion?
The EBSS expansion has been welcomed by consumer groups, charities, and industry bodies, who have been calling for more support for vulnerable households facing fuel poverty.
Citizens Advice, which provides free and impartial advice on energy issues, said that the EBSS expansion was a “lifeline” for many households that were struggling to heat their homes and pay their bills. The charity also urged the government to make the scheme permanent and extend it to all low-income households, regardless of their energy supplier or payment method.
The National Energy Action (NEA), which campaigns to end fuel poverty, said that the EBSS expansion was a “positive step” that would help some of the most excluded and hard-to-reach households. The NEA also called for more investment in energy efficiency and renewable energy, which would reduce energy demand and carbon emissions.
The Association for Decentralised Energy (ADE), which represents the district heating sector, said that the EBSS expansion was a “fair and sensible” decision that would recognise the diversity of energy provision in the UK. The ADE also said that the scheme would help to protect customers of district heating networks, which are not covered by the energy price cap or the WHD.
However, some critics have argued that the EBSS is not enough to address the root causes of the energy crisis, and that the government should take more action to reduce the UK’s dependence on fossil fuels and increase its energy security and resilience.
The Labour party, which is the main opposition party in the UK, said that the EBSS was a “sticking plaster” that would not prevent millions of households from falling into debt and hardship. The party has proposed to cut VAT on energy bills from 5% to zero, which would save households an average of £100 a year.
The Green party, which advocates for environmental and social justice, said that the EBSS was a “drop in the ocean” that would not tackle the climate emergency or the inequality in the energy system. The party has proposed to introduce a universal basic income, which would provide every citizen with a regular and unconditional payment to cover their basic needs.
