Energy: Vulnerable Energy Consumers Short-Life Working Group minutes - July 2023

Attendees and apologies

• Gillian Martin MSP, Minister for Energy and the Environment
• Advice Direct Scotland (ADS) 
• Citizens Advice Scotland (CAS) 
• Consumer Scotland
• Energy Actions Scotland (EAS) 
• The Poverty Alliance 
• Scottish Fuel Poverty Advisory Panel 
• Fuel Bank Foundation
• Energy UK
• Inclusion Scotland 
• Age Scotland 
• Scottish Federation of Housing Associations (SFHA) 
• Council of Scottish Local Authorities (COSLA) 
• The Wise Group 
• Scottish Care 
• Home Energy Scotland  (HES) 
• Deputy Director for Heat in Buildings Policy and Regulation

Items and actions

Opening remarks 

The minister opened the meeting and made the following points:

• bills remain £1,000 higher than this time two years ago, and many more consumers are being pushed into fuel poverty due to the wider cost of living crisis
• this meeting stems from the former First Minister’s energy summits held last year
• the objective is to create collaborative actions to mitigate the impact of energy prices on consumers along with refining our asks of the UK Government
• the minister is also chairing the Rural Energy Consumers Short-Life Working Group and the Non-Domestic Energy Consumers Short-Life Working Group 
• the minister met with her UK Government counterpart Amanda Solloway in June to discuss a range of issues including a social tariff

Agenda item 1: Defining consumer vulnerability

A representative from the Fuel Bank Foundation and the Scottish Fuel Poverty Advisory Board, opened the session:

• the word "vulnerable" is loaded with different perspectives and connotations
• there are three areas of focus when considering a definition: 
  • income – consumers have competing priorities affecting the ability to pay
  • health – some people that have a critical dependency need energy for equipment
  • those who struggle (or are unable)  to engage with advice services  (these comsumers might be excluded by technology, geography or other reasons) 
• we need to ensure that people’s voices are understood and they don’t struggle this winter as much as last year
• it’s hard to capture everyone as some people who could be considered as vulnerable don’t perceive themselves as such (it may come with an acceptance of new levels of normality and a sense of failure) 
• people are often victims of their circumstances and may have multiple issues they are dealing with 

The following points were captured during the plenary discussion:

• disabled people in general face higher energy costs and many are dependant on benefits that are slow to rise
• words matter – we need to be conscious of the language we use, as it can deter people from seeking help
• industry uses more attractive language such as "priority services"
• income is the common vulnerability driver that exacerbates everything else
• vulnerability can be transient (experienced for short periods of time), in which case it can be hard to capture
• people that are newly vulnerable behave differently when accessing services 
• people may not fully understand the problems they are facing, and energy advisors need to work to understand all the issues
• there are high heating levels in Scotland due to poor energy efficiency and there are high number of off-gas grid households
• the government needs to improve both data capture and utilisation around consumer vulnerability
• the Scottish Government can help with data sharing

Agenda item 2: Social tariffs

Citizens Advice Scotland (CAS) opened the session:

• CAS has committed to building the evidence base for the UK Government’s consultation on social tariffs
• three high-level principles that should be considered when thinking about the design and delivery of a social tariff:
  • targeted – to those on low incomes, with disabilities, primary beneficiaries, and means-tested benefits (many single person households are also struggling as support for them is inadequate)
  • automatic – those eligible should receive it automatically
  • additional – shouldn’t replace existing support measures
• Citizens Advice research illustrates four mechanisms:
  • bill discount – this is preferred
  • unit rate discount
  • rising block tariff
  • bill cap 
• funding should come through general taxation – a levy would be unattainable and would disincentivise energy efficiency

The following points were made during the plenary discussion:

• social tariffs might replace the Warm Home Discount however, how much is needed depends on the consumer's location
• we have to make sure that tariffs are applied to prepayment meters
• representations have been made to the UK Government's Chancellor about social tariffs for social tenants and those that live off-grid who face higher costs
• consideration needs to be given to the cost of inaction against the cost to those unable to afford to eat, or heat their homes
• we need simplicity in consumer engagement but the infrastructure is challenging
• Priority Services Register (PSR) data sharing is key 
• we should explore how we can use data around the Energy Price Guarantee and EBSS to get help to people   

Agenda item 3: Existing support

Consumer Scotland opened the session:

• people in Scotland tend to have higher bills due to older housing stock, higher amount of consumers with prepayment meters, and colder weather
• fuel bills are still high and will stay high for several years
• we need to build in longer term measures such as energy efficiency when considering support for people
• Consumer Scotland’s energy tracker shows that by Autumn 2022, 42% of consumers couldn’t afford to heat their homes, in Spring 2023 it fell to 33%
• it also highlighted that 52% of disabled people were unable to heat their home
• Consumer Scotland is working with Inclusion Scotland to identify the big disparities in costs differentials in disabled groups as there is insufficient data currently available
• as a result of the last energy summit, the signposting process from Social Security Scotland to Home Energy Scotland (HES) has improved

The following points were made during the plenary discussion:

• HES has seen a huge rise in demand, especially for Solar PV
• there are different requirements for disabled people, even those whose energy usage is not directly affected, (eg. people with mental health issues tend to stay at home more)
• Marie Curie has done work with terminal cancer patients to determine energy usage but it varies depending on condition
• additional support is needed and must factor in existing complex debt that can’t be written off and paid back
• in the context of social landlords - equivalent support should be given to domestic customers on non-domestic contracts, including older people and with medical needs
• there is good support available in Scotland, but many vulnerable consumers either deny help or don’t self-identify as vulnerable
• HES is looking at ways to increase self-help resources digitally
• we need to explore ways to create one-stop shops that captures all consumers and uses joined up infrastructure
• we need to consider the net zero implications for vulnerable consumers such as challenges they will face in light of the gas-grid being turned off by 2030 (there needs to be a holistic and proactive approach)
• in the context of vulnerable consumers in care homes – staff in care homes can flag people that fall through the cracks, as not all of them will be able to seek help
• data sharing will be an issue for care home residents as many can’t access questionnaires – but their carers could act as a referral system

Agenda item 4 : Access to advice services 

Advice Direct Scotland (ADS) opened the session:

• as a result of the energy summits, suppliers improved their customer service processes and enhanced their resource to cope with demand
• the summits allowed partners to join up, for example, the Fuel Insecurity Fund distributors work together to ensure there is no double handling
• there has been over 1,500 consumers referred to distributors to access the Fuel Insecurity Fund
• there is an existing collaboration with Citizens Advice Bureaus, Housing Associations, HES and disabilities charities
• there are many circumstances of people struggling with unaffordable debt (this constitutes bad practice when it’s clear the debt is highly unlikely to be repaid)

The following points were made during the plenary discussion:

• the Wise Group are launching work funded by the Fuel Insecurity Fund that offers mentoring support across different areas including energy, employment, debt, and addiction
• it will deliver long term change and savings across different policy areas such as health
• with so many organisations offering help, the advice landscape can be complicated for the domestic consumers – consideration should be given to the option of an online portal for consumers to self-refer, similar to the Scottish Government's Find Business Support portal 
• many people that are just above the benefits eligibility threshold, and were not vulnerable previously, do not seek advice but may still be struggling
• 40% of those eligible for pension credits do not claim them, as there is a stigma around benefits
• many disabled people stop claiming Employment and Support Allowance/Universal Credit and are only relying on disability benefits
• the Scottish Federation of Housing Associations (SFHA) reported that the Fuel Insecurity Fund pot has helped, but a longer term funding measure would be welcome
• the vast majority of consumers have other debts apart from energy to consider
• an option could be banks offering a credit card payments freeze
• there is a need for a natural landing site for consumers and organisations’ websites should be clearer about the functions they deliver 
• we need more positive language when talking about advice and strong scenarios that make a difference 

Agenda item 4: Outcomes and closing remarks 

The Scottish Government's Deputy Director for Heat in Buildings Policy and Regulation closed the meeting by making the following points: 

• thanked everyone for attending and their contributions
• would like to seek help from this group as the Scottish Government continues with its public engagement around the Heat in Buildings strategy
• energy consumers officials will be in touch soon to arrange the next session which will be led by Scottish Government officials
• the Minister will chair the final meeting in September to hear about the agreed package of measures

Summary of action points: 

1. Defining Consumer Vulnerability

• explore ways in which we can try to capture those consumers who are struggling to engage and help them unpack the challenges they are facing
• agree on the language we are using when trying to engage with consumers who are most in need of help (e.g. use "priority" rather than "vulnerable")
• explore ways in which we can target and support those who are newly vulnerable and for shorter periods of time
• use data available to government and wider partners to inform calls upon Ofgem and suppliers to support those in need of priority support (e.g. who should be included on the PSR), including using intermediaries for people who would otherwise not be captured in data gathering exercises
• explore how we can gain a clearer picture of the additional costs of running medical equipment and heating for those with medical conditions 

2. Social Tariffs 

• call upon the UK Government for: 
  • an automatically applied social tariff that is targeted at those who are struggling with high energy costs as an additional measure of support
  • a progressive, accessible social tariff that is funded through general taxation rather funded from a levy
• call upon the UK Government to develop a model using its own data sources and supplier data to help with the targeting and quicker delivery of a social tariff
• ensure that we reflect the interests of off-grid consumers when making representations on social tariffs

3. Existing support measures 

• explore ways in which we can encourage consumers to think about energy efficiency measures as a form of help to save on energy bills as well as reducing consumption
• explore ways we can ensure domestic consumers on non-domestic contracts receive future support through a social tariff or other measures
• explore ways in which digital technologies can help access groups of consumers who are more difficult to reach
• when making considerations around future help, ensure that those who are still struggling with debt from last winter, and wider debt than energy bill debt, continue to receive support

 4. Access to Advice Services  

• work to ensure that all organisations that could be working with advice services are doing so, in order to increase the number of consumers receiving the support they need
• explore ways in which we could use resources like a digital portal to support consumers in navigating the advice and advocacy services available
• partners to work together to explore ways in which they can work together to be clear in messaging around the services they do and don’t offer to ensure consumers have a shorter advice journey
• promote positive examples of where and how advice can make a difference