Winter is coming so where is the plan?

In just 219 days we will be in the grip of winter. This may seem like an unnecessarily cruel reminder as we approach a carousel of spring bank holidays but utilities will need no convincing that we should all have this countdown front of mind.

Whitehall has never been any great respecter of the seasons, stretching their definitions to breaking point when delivering policy promises. However, preparation for affordability challenges in winter 2023 is a hard deadline. There is a risk that complacency sets in over the coming months, with predictions of corners turned on inflation and energy bills falling. But we are a significant way away from “normal” times. Average energy bills above £2,000 will be unaffordable for millions of customers, especially if we see a contrast to the most recent winter’s abnormal mildness (and it would be perverse to rely on global warming to solve affordability challenges).

The blanket support mechanisms introduced last year have been invaluable but there is a clear need to work towards a system that benefits those most in need. The case for targeted support is clear from the water sector, where bills are several magnitudes lower than in energy but social tariffs are still widely needed. For years a single social water tariff to standardise support across the country has been called for but when it is needed most the government appears to have gone cold on the idea. A social energy tariff now seems to have the support of most stakeholders but what would it look like, who would qualify and how would it be funded? We still have no concrete proposals on the table despite an apparent target of April 2024 to implement…. something.

One senior industry figure described the current situation thus: “Government’s ambition for next April is not high enough and is non existent for this winter.”

This is the backdrop to Utility Week’s new campaign, Action on Bills, through which we plan to keep a relentless focus on support for customers this winter, while pushing for meaningful debate on what a long-term targeted solution looks like.

This campaign does not seek consensus across utilities – in fact the pursuit of a perfect solution and the unwillingness to accept trade-offs seems to be one of the key barriers to progress. On the topic of a nationwide social water tariff or the best way to support vulnerable energy customers this winter, there are many shades of opinion.

However, absorbing a diverse range of views from across the sector we can identify a number of common goals.

Most notable is the agreement that customers will need further support and that there is a limit to what can be achieved through cross-subsidisation. Government has an understandable reluctance to pile more support costs onto the taxpayer but utilities across the board have told us that for next winter at least there simply isn’t the scope for billpayers to shoulder the burden. This is a memo the energy secretary does not yet appear to have received.

The environment secretary has expressed her desire for “consistency” of water social tariffs across the country ahead of the need for a single framework. But again this can only be achieved with the backbone of central funding. Ignoring this creates its own postcode lottery.

Eligibility is another critical, and complicated factor. How do you target support when vulnerability is so transient and how do you prioritise needs? There are no easy answers to this but the starting point must be more intelligent use and responsible sharing of data. Government has the levers to open up its data to utilities and it should not delay in using them.

Our campaign calls for a revised Energy Bills Support Scheme (EBSS) for the coming winter but this does not have to be an exact replica of the scheme that has just ended. If action is taken now a (more) targeted EBSS programme could be a stepping post to increasingly elegant solutions. Again, not everyone will agree with this approach but perfect cannot be the enemy of good.

I would welcome your support – and your thoughts – on this campaign. We cannot afford to waste any of the 219 days left to us before winter dawns.