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Energy Bill Discount Scheme update

Yesterday the Exchequer Secretary to the Treasury, James Cartlidge, announced the government’s plans to follow the Energy Bills Relief Scheme by announcing the new Energy Bill Discount Scheme. The new scheme sees two levels of support:  

  1. From 1 April 2023 to 31 March 2024, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices. 
  2. A higher level of support will be provided to sectors identified as the most energy and trade-intensive – predominately manufacturing industries. The list also includes “library and archive activities, museums activities, historical sites and buildings and similar visitor attractions, botanical and zoological gardens and nature reserve activities”. Those in scope will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.  

You can find more information in the official press release, detailed factsheet and the list of sectors included in the higher tier of support.  

I’m proud of the concerted efforts from our sector to influence the government’s thinking on this, and enormously grateful to all the ACEVO members and others who have filled in surveys, provided case studies or attended round tables to help make the case for continued support for those charities that are facing spiralling energy costs alongside several other acute financial and operational challenges right now. 

Yesterday’s announcement contains many wins for our sector: 

  • Charities are once again explicitly included and acknowledged in the government’s thinking – that alone is a very different picture from just a couple of years ago. 
  • We know that at the very highest levels of government it is now well understood that, unlike many businesses, charities cannot pass on their increased costs or pivot to delivering more commercially viable services. 
  • Government heard our case that:
    • continued support needed to be guaranteed for a full 12 months to allow time to plan. 
    • continuing support through the existing mechanism of subsidising energy bills was the most effective route – the alternative would most likely have been applications for grant or loan funding, with all the complications and pitfalls that would bring. 
    • cherry picking specific parts of our sector for support would be invidious, inequitable and dangerous in terms of unintended consequences. 

So the announcement of a year-long scheme, delivered via energy bills, that covers every charity on a business tariff is undoubtedly welcomed. 

The challenge though is the quantum of support. £5.5bn of support over 12 months is, by definition, spread much, much thinner than the initial £18bn of support over just six months. 

Ultimately, the decision on the overall level of support to be offered is a political as well as an economic one. 

I have already fed back to the Exchequer Secretary my fear that this support will not be enough to save many badly needed charity services from closure. 

We know that government understands our articulation of the impact on communities and individuals when charities have to reduce or close services. We know they understand that there are knock-on consequences for the public purse and the public sector when charities like hospices, community centres, youth groups, mental health services or domestic violence refuges cannot function effectively. We know that after two years of the pandemic followed by an economic crisis, the resilience of our sector is at real risk. 

Our work to keep making the case for our sector continues. We continue to engage with government and officials to explore the scheme and the implications in more detail and will keep you informed every step of the way.  

Jane Ide, chief executive

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