The Warm Home Discount scheme provides important funding for the short-term relief of fuel poverty. However, a combination of research and evidence from the Citizens Advice network in Scotland has previously found that while the Warm Home Discount is seen as vital by those who receive it, it is not adequately reaching those who need it most. This consultation proposes a number of potentially positive changes to the operation of the Warm Home Discount scheme, alongside a 4-year extension to March 2026.
CAS warmly welcomes proposals to extend the Warm Home Discount scheme beyond 31 March 2022. However, although significant changes to the scheme are proposed for consumers in England and Wales, divergent definitions of fuel poverty and issues with the availability of suitable data mean that the majority of this consultation is not applicable to Scotland. Although BEIS has indicated that there will be future consultation with the Scottish Government to create a scheme which works for Scotland, no details are provided as to the default position for consumers in Scotland should a Scottish scheme not be triggered through devolved powers or should an agreement between the Secretary of State and Scottish Government not be reached. CAS therefore believes that clarity on the default scheme design for Scotland from April 2022 is urgently needed.
Should a separate Scottish scheme be forthcoming, the consultation proposes that 9.4% of the total Warm Home Discount spending envelope should be allocated to Scotland. However, in Scheme Year 9 (2019-20) Scotland received 10.11% of the number of Warm Home Discount rebates provided to GB consumers, with additional benefits delivered through Industry Initiatives.
Consumers in Scotland already experience higher levels of fuel poverty than consumers in any other nation in GB, yet the BEIS proposals on apportionment would represent a cut in the proportion of total Warm Home Discount spending in Scotland. This would result in the the potential reach of the available funding being markedly lower in Scotland than is proposed in England and Wales. CAS is therefore concerned that, given the specific energy cost and affordability challenges many consumers in Scotland face - including as a consequence of geographic and climatic factors - these proposals would lead to an even greater divergence in fuel poverty rates across GB. CAS believes that an alternative approach to apportionment, such as a needs-based approach, would result in a more equitable distribution of the Warm Home Discount scheme's funds in the event that apportionment of the spending envelope becomes necessary.