Why financial support this winter makes sense

The benefits of providing the most vulnerable consumers with financial support with their energy bills this winter include better educational outcomes for children, an industry expert has suggested.

Providing support for customers this winter, ahead of more targeted measures next year, is a key ask of Utility Week’s Action on Bills campaign.

Amy Marshall, energy and retail market expert at PA Consulting, spoke to Utility Week about why, in addition to helping customers pay their bills, financial support has other positive benefits for the fuel poor.

She said: “Educational outcomes are quite often linked with broader environmental factors like air quality and quality of food. So if you have kids that are going to school cold and/ or hungry because they are from a low income household that doesn’t have the means to give them that basic support, then there is going to be a knock-on impact in the long term on the education system and to educational outcomes.

“That’s very broad brush but I think those links between social demographic and life outcomes is quite well made. So you could say that the energy crisis is compounding some of those already quite well understood relationships therefore if you intervene you will be either lessening the risk of it worsening or potentially alleviating some of those negative outcomes.”

Consumers can also benefit from positive health outcomes, with Marshall saying there is “a very strong evidence base” that intervening in a critical service such as energy has “wider benefits for the economy in terms of avoiding poor health outcomes”.

This is an area which has been explored by pre-payment meter specialist supplier Utilita.

Speaking to Utility Week earlier this year the company’s chief executive Bill Bullen talked about how supporting vulnerable energy customers with financial aid could have positive impacts on the NHS.

He said research Utilita conducted with the University of Oxford showed the need for grants of between £600 and £1,000 for up to 10 million households expected to be in fuel poverty this winter.

This could be funded through scrapping Renewables Obligation payments, Bullen said, estimating this would raise the £6 billion needed to provide grants at the £600 level.

“Renewables don’t need to be subsidised at current wholesale prices. So that pays for the £600 going to 10 million households. There’s also academic research that says 40% of that extra money would offset costs that will otherwise arise in the NHS as we go through winter. This makes total sense,” he said.

Meanwhile, Marshall also spoke about the wider economic benefits of helping the fuel poor.

She added: “If people are feeling more comfortable that they have enough to survive because they have other support and/ or control over their costs in terms of heating and eating, it creates more headroom for discretionary spend and of course that’s broadly helpful for the economy.”

This topic will be explored in more detail at Utility Week’s Consumer Vulnerability and Debt conference in Birmingham this November. For more information and to book your place, click here.