Fuel poverty is no longer a niche problem in UK

Just eight years since its launch, Fuel Bank Foundation has already provided financial support to help one million vulnerable energy consumers with their bills. Reflecting on this difficult milestone, the charity’s chief executive Matthew Cole speaks to Utility Week about the immense challenges still being faced by the poorest consumers, the urgent need for targeted support this winter and why the organisation is eying new ground in Australia and the United States.

Memories of desperate neighbours borrowing 50p for their prepayment meter (PPM) have made Matthew Cole realise, in more recent years, just how much of an impact his early experiences have had on his career trajectory. It was here, in the tiny East Yorkshire village of Burton Pidsea, that the future fuel poverty expert witnessed first hand the devastating impact of living in a cold home.

“I know what it’s like to live in a cold home. My parents didn’t have a prepayment meter, but neighbors did. And where I lived, ironically, big gas pipes used to come through from the North Sea, used to go past the village, but the village wasn’t on the gas network. So I really got, not what fuel poverty is, but what it’s like to live with fuel poverty around you and how it impacts you,” he tells Utility Week.

Speaking to Utility Week in a central Manchester café on a warm July day, the thought of winter might be far from the minds of the hundreds of people passing by on the street outside the café, yet Cole thinks of little else as head of the Fuel Bank Foundation charity.

Founded by Cole while he was at Npower as head of policy and customer vulnerability in 2015, the charity specialises in helping consumers avoid what it calls fuel crisis by giving them the funds to top up their PPM and keep on supply.

As the cost of living crisis continues to squeeze the incomes of millions of consumers, there has been no let-up in the number of people needing its help over the years. In its first year, Fuel Bank helped 14,500 people. Fast forward to the past year and this number has increased to 413,700 – a staggering rise of more than 2,700%. This latest figure also represents almost half of the one million people it has now helped in the last eight years.

“We’ve really struggled, we can’t decide what to call it because milestone is normally a mark of celebration, isn’t it?”, he ponders.

“We were set up as a small charity, we didn’t ever believe the situation would get this bad and we think it’s really important that we draw it to people’s attention that this isn’t a niche issue which only happens occasionally, it’s happening up and down the country.

“And actually, if it’s happening today, and it’s vaguely warm outside, it’s going to happen much more in the winter. This is why it’s a really big problem we just need to get our heads round and solve.”

A recent survey – conducted on behalf of Utility Week by Insight Advantage – found that an overwhelming majority of respondents (90%) were in favour of some form of financial support for customers this winter. Of these, 36.5% were in favour of financial support for only the poorest.

Cole has long been an advocate of targeted support for the most vulnerable consumers, a key ask of Utility Week’s Action on Bills campaign launched earlier this year. His organisation is urgently trying to steer the government away from providing blanket financial support, as happened last winter with the £400 Energy Bills Support Scheme (EBSS) which was given to the vast majority of households.

Cole adds: “It’s about, really simply, not trying to appease everybody, not trying to give help to everybody […] the danger of EBSS was that it was badged very much as a support package to help people with energy bills which were rising.

“But actually, rising energy bills had different impacts on different groups so those people in fuel poverty were really, really struggling to keep warm. And although £400 from the government was amazing, it didn’t touch the sides for some people who were facing an increase of maybe £1,000 a year […] If the government is minded to provide support it’s got to be targeted at those people who absolutely need it.”

Spend the savings

In response to the energy crisis the government spent almost £40 billion between October 2022 and March 2023 to protect homes and businesses from spiralling bills. Yet figures reveal that it spent £7 billion less than expected. Utility Week’s survey asked respondents what the government should do with the savings.

The majority (59.8%) said they want the funds committed to support those struggling to pay their bills this coming winter, compared to 23.2% who believed it should be used to fund tax cuts and 17% who wanted it reallocated to other areas of government spending.

Cole is unsurprisingly in favour of the funding being used to support vulnerable consumers, yet he warns that the government should focus on getting the existing scheme right rather than funding an entirely new one.

Figures from the Department for Energy Security and Net Zero published earlier this year showed that with little over two months to go before the scheme was due to end on 30 June, more than £160 million in energy support vouchers remained unclaimed.

Cole adds: “The starting point shouldn’t be to reinvest it in new stuff, it should be to make sure those people who missed out get it. There’s about £100 million or so, which didn’t go to prepayment meter customers, there’s the £300 million or so which didn’t go to people who are off the electricity network. We haven’t got the figures for people who missed out who were off the gas network or had an alternative fuel source as well. But we’re looking at getting on for half a billion pounds there of money between those three schemes in total.

“As this was support for every household in the country and we know that some of the most vulnerable missed out, government should do two things. They should withdraw the cut-off date of 30 June and leave it open so people can retrospectively apply in the same way that you can make a backdated pension credit to DWP […] But also, government should take the opportunity to look at the data to see how can we identify those people who didn’t get help.”

He suggests using things like council tax records to help trace families who did not claim the support. If that fails, he says, the money should be allocated to organisations within the community that are helping to support people.

With winter inching ever closer and no firm government support announced, Cole is already thinking ahead to the busy months at the end of the year when his charity will be flooded with enquiries from desperate people seeking help to keep warm. If this Christmas is anything like the last one, Fuel Bank’s staff are in for an extremely busy period.

He says: “A week before Christmas [last year] about a quarter of people [contacting us] hadn’t received the money. As a result we were spending over £500,000 a week as a charity keeping people warm. What worried us is £125,000 a week potentially of our spend on fuel could have been avoided if people had received the funding they should have from government.”

Help down under

Looking forward after eight years and one million customers helped, the Fuel Bank Foundation is starting to expand its reach.

Away from the UK, Cole reveals that Fuel Bank is now aiming to assist the fuel poor in countries such as Australia and the United States. He says there has been a “real interest” in Fuel Bank’s model owing to its simplicity.

He further explains: “It’s all about how you deliver crisis help for people who need it in an efficient way. What’s really interesting in particular about Australia is they have some really similar challenges to us, except that there we don’t talk about ‘heat or eat’ it’s ‘cool or eat’.

“The issue in Australia is that there are lots of families who are living in homes and can’t afford to keep them cool. And so that has knock on health impacts to people over heating, you can’t keep medication to a certain temperature. They have the same issue with prepayment meters as well.”

He adds: “If we go back eight years, there was no real concept of fuel vouchers in the UK, there was no national program for this kind of support and we identified and showed that there was a need.

“We share as much as we can in the public domain, we’re not precious about anything really. We’ll share our analysis, share our research. And we think if we’ve done that in the UK, doing that overseas as well can only be a good thing.”