Citizens Advice has told Prime Minister Andy Burnham that the Department for Work and Pensions (DWP) should increase the Warm Home Discount from £150 to an average of £360 for eligible households this winter. The proposed rise would add £210 to the current payment.
Mr Burnham and his Chancellor, John Healey, are preparing to deliver their first Budget on October 28, following the departure of former Prime Minister Sir Keir Starmer and his Chancellor, Rachel Reeves. As part of the preparations, businesses, charities and key organisations across the UK have been invited to submit proposals for changes to be included in the Budget.
Charity calls for tiered support
Citizens Advice argues that the Warm Home Discount, which provides a £150 payment to households on benefits in England and Wales to help with energy bills over winter, has not increased in line with inflation. Energy bills rose by 4% in October and are expected to rise further in January.
The charity said: “We welcome the expansion of the Warm Home Discount (WHD) to all households receiving means tested benefits, providing them with a vital lifeline. However, the value of the discount has been £150 for over a decade, and has not kept pace with inflation or sharply rising energy prices. It currently does not provide adequate support to the households who are struggling the most with their energy bills. Furthermore, changes to the way the scheme is paid for mean those on low incomes, who use the most energy, pay most towards it, significantly reducing the benefit they get from the scheme.”
Instead, the charity is urging that “tiered support” be introduced, offering an average of £360 per household, with some households receiving even more.
Modelling and funding
Citizens Advice continued: “Valuations Office Data should be used as a proxy to assess energy needs, to provide tiered support. As this is how the previous WHD operated with the high-cost-to-heat threshold, it should be possible for the Government to implement these changes this winter.
“Our modelling, which was done in partnership with IPPR and Policy in Practice, assumed 5.6 million households on means tested benefits would receive, on average, £360 towards their energy bills. This would see 600,000 households no longer spending over 10% of their income on energy, which would have a significant impact on those who are struggling most.
“With energy continuing to be one of the least affordable bills, implementing this model would help millions of households at the sharp end of the cost of living crisis. By committing to funding the scheme long-term, the Government could help households to get their budgets under control, keep their homes safe and warm, and begin to reduce the debt burden in the energy market by making bills more affordable.”
Citizens Advice acknowledges that the change would cost an extra £2 billion a year, but says funding should come from general taxation rather than being added to energy bills. Those currently eligible for the Warm Home Discount include state pensioners on Pension Credit, as well as households on Universal Credit, Housing Benefit and/or Income-Related Employment and Support Allowance.
