Hospice UK Leaders Briefing update on the announcement by the UK Government of its new Energy Bill Relief Scheme for businesses, including charities.
Jonathan Ellis,
Director of Policy, Advocacy and Clinical Programmes,
Hospice UK
On Wednesday 21st September, the UK Government announced that it will provide support for all non-domestic energy customers, including voluntary sector organisations, across the UK from 1st October 2022 to 31st March 2023. Details on the support being provided for organisations in England, Scotland and Wales can be found below. Information on how equivalent support will be provided for organisations in Northern Ireland is not yet available.
- Organisations, including hospices, with non-domestic fixed (agreed on or after 1 April 2022), deemed/out of contract, variable and flexible purchase energy contracts will be offered support via this scheme.
- The Government has set a supported wholesale price for energy for non-domestic users in England, Wales and Scotland, which is £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas.
- Hospices with a fixed contract agreed on or after 1 April 2022 (this includes those entering new fixed price contracts after 1 October) will receive a discount of the difference between the Government supported wholesale price and the relevant wholesale price for the day the contract was agreed. Hospices on fixed contracts agreed before 1 April 2022 will not receive support via this scheme (presumably because they will have fixed at a rate likely to be lower than the new capped price per unit).
- Hospices with default, deemed or variable tariffs will receive a per-unit discount on energy costs up to a maximum of the difference between the supported price and the average expected wholesale price over the period of the scheme. The maximum discount is likely to be £405/MWh for electricity and £115/MWh for gas. Whilst hospices on these contracts will pay reduced bills, these will change over time and may be subject to price increases. The Government has said it will work with suppliers to ensure organisations have the opportunity to switch to a fixed contract for the scheme to prevent price variation.
- Hospices with flexible purchase contracts will have their level of reduction calculated by suppliers according to the specifics of their contract. This will also be subject to the maximum discount.
There is no need to apply for this support as suppliers will automatically reduce your hospice’s energy bill if you are eligible and, in return, the Government will compensate suppliers for the reduction in wholesale gas and electricity unit prices that they are passing on. Individual bills will continue to vary but the Government support will be the same across suppliers.
You can access more detailed guidance on the scheme on gov.uk.
Hospice UK’s primary concern at this stage is the potential cliff-face of rising prices that hospices might face in April 2023 if the scheme is not extended beyond the initial six month period.This creates risk and uncertainty, as it is likely that wholesale energy prices will remain high at that point.
In three months, the Government will publish a review into the operation of the scheme, which will identify the most vulnerable non-domestic energy customers who will struggle to reduce their energy usage or increase their energy efficiency and will therefore likely need further support after March 2023.
Hospice UK will be making the case to Government that the hospice sector will require further support after March 2023 as a result of cost pressures that cannot be mitigated by other means. They will also be highlighting their concern that hospices will still be ‘locked in’ to high energy costs from October to March (even with the Government discount) compared to rates at the start of the year.
There will inevitably be a lot of detail to think through in the coming weeks. Hospice UK are keen to hear your thoughts on how this scheme will impact on your organisation, and any potential questions or issues that you might have. Please share your thoughts by emailing [email protected]. This will help Hospice UK to raise your concerns and experiences with Government as well as helping to build the case for the support for hospices to be extended beyond the six month period.
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