The First Minister has sought an emergency meeting of the Prime Minister and Heads of devolved Government Council to agree steps to help people in need as a result of the cost of living crisis.
In a letter to the Prime Minister urging the suggested September meeting be brought forward due to a “fast deteriorating” situation the First Minister made her view clear that “many people across the UK simply cannot afford to wait until September for further action to be taken”.
The meeting between leaders of the devolved governments and the UK Government would provide an opportunity to agree actions that can be taken now and formulate a plan of action for the long term.
The Scottish Government Resilience Room (SGoRR) will convene this week to discuss what steps can be taken to urgently ease the burden on households across Scotland, both now and in the future.
First Minister Nicola Sturgeon said: “While we will continue to take all actions available to us within devolved responsibilities and budgets – the Scottish Government is investing almost £3 billion this year in a range of measures which will help address the cost of living pressures – it is a statement of fact that many of the levers which would make the biggest difference lie with the UK Government.
“It is also the case that only the UK Government can access and make available resources on the scale required. Therefore, actions by devolved governments alone – though important – will not be enough to meet the unprecedented challenges we face.
“Action is needed now to address significant gaps in help for households, in particular those on low incomes, who are increasingly vulnerable to the impact of rising household costs.
“However, it is also vital, given further increases to energy bills due to be announced later this month, that a substantial plan be developed now to avert and mitigate what will otherwise be a crisis of unprecedented proportions – a crisis in which many people will be unable to feed themselves and their families or heat their homes.
“While few will escape some impact of the cost of living crisis, these impacts are not being experienced evenly. That is why the focus must be on providing targeted support to those most adversely impacted, rather than an irresponsible reduction in broad-based taxes which will benefit the relatively better off over those most in need.
“The current crisis requires clear, focused and determined leadership and co-operation to develop and deliver – at pace – a package of interventions to protect those most impacted.”
Around 1 million children with key worker parents are living below the breadline, research shows
In some parts of Britain more than two-fifths of kids in key worker households are living below the breadline
Poverty levels “likely to get worse” as ministers hold down pay
Key workers in the public sector facing another year of real-terms pay cuts
ONE in 5 (19%) key worker households have children living in poverty, new TUC research has revealed.
The research, which uses the government definition for key workers, shows that the number of kids growing up in poverty in key worker households has increased by 65,000 over the past two years to nearly 1 million (989,000) in 2022.
It forecasts that in 2023 that number will rise again to 1.1 million unless ministers take further action to support families.
North East hit hardest
The analysis – undertaken for the TUC by Landman Economics – highlights how in some regions of the UK more than two-fifths of children in key worker households are now living in poverty.
Key worker families in the North East (41%) have the highest rate of child poverty followed by the North West (29%) and London (29%) and the East of England (24%).
Scotland (8.3%) and Wales (8.9%) have the lowest rates.
Worse set to come
The TUC warned child poverty rates among key worker households are likely to get worse.
Ministers have announced another of year of real-terms pay cuts for key workers in the public sector.
The union body says this will have a devastating impact on frontline workers after a brutal decade of pay freezes and cuts:
Hospital porters’ real pay will be down by £200 this year
Maternity care assistants’ real pay will be down by £600 this year
Nurses’ real pay will be down by £1,100 this year
Paramedics’ real pay will be down by over £1,500 this year
And ministers are calling for wages to be held down for some key workers in the private sector too.
The TUC says the additional support announced by the Treasury this year to help families with energy bills will be offset by cuts to real-terms pay and other rising living costs.
Risk of recession
The TUC says government calls for widespread pay suppression will reduce household spending and demand as the UK teeters on the brink of recession.
The union body highlighted how at the same time key workers are being told to tighten their belts, city bonuses are rocketing.
TUC analysis published in June month revealed that bonuses in the financial and insurance sector grew by 27.9% over the last year, six times faster than average wages in the same period, which grew by 4.2%.
TUC General Secretary Frances O’Grady said: “Our amazing key workers got us through the pandemic. The very least they deserve is to be able to provide for their families.
“But the government is locking too many key worker households into poverty.
“Ministers’ heartless decision to hold down pay will cause widespread hardship and put the UK at greater risk of recession.
“After the longest wage squeeze in 200 years we urgently need to get more money in the pockets of working families. This will help people get through this cost of living crisis and inject much-needed demand into our economy.
“It is particularly galling that as key workers are being told to tighten their belts, city executives are enjoying bumper bonuses. Once again ordinary working people are being forced to carry the can for a crisis made in Downing Street.”
Support needed for key worker families
The TUC is calling on the government to guarantee decent living standards by:
Raising the national minimum wage immediately.
Giving all key workers a fair pay rise that meets the cost of living
Funding the public sector so that all outsourced workers are paid at least the real Living Wage and get parity with directly employed staff.
Boosting universal credit to 80% of the real Living Wage
Significantly increasing benefit payments to children and removing the two-child limit within social security.
Children in poverty in key worker households by UK nation and region in 2022
Region
Total number of children in key worker families
Number of children in poverty in key worker families
Percentage of children in poverty in key worker families
Climate campaigners have said that BP reporting a tripling of quarterly profits shows that the UK energy system is ‘fundamentally broken.’ The oil giant today announced profits of £6.9 billion ($8.45 billion) in just 3 months.
Meanwhile, energy consultants have forecast that energy bills could reach over £3,600 per household.
BP have said they will use these record profits to pay out to their shareholders as well as buy back shares in the company from investors. Share buybacks are a way of increasing the value of shares for shareholders.
BP continues to invest in fossil fuel projects such as the Murlach oil field which will further ‘lock us into’ this broken energy system for decades, increasing company profits even further at the expense of people and the planet, campaigners say.
Climate scientists and energy experts have warned that we cannot afford any more investment into fossil fuel extraction if we are to limit dangerous climate warming to 1.5ºC.
Recent research revealed the oil and gas industry has made over $52 trillion in profit over the last 50 years.
Friends of the Earth Scotland’s Oil and Gas Campaigner Freya Aitchison said: “This announcement of yet another obscene profit for BP is a clear sign that our energy system is fundamentally broken.
“Rising energy prices are a key driver of the cost of living crisis which is plunging millions of people in the UK into fuel poverty, yet bosses and shareholders at BP are getting even richer by exploiting one of our most basic needs.”
“BP is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come. Instead of allowing these companies to continue causing social and environmental devastation to boost their profits, we need to overhaul our energy system to rapidly phase out oil and gas.
“A fair and fast transition to renewables must ensure that everyone has access to affordable and clean renewable energy.”
The UK government sets out further details of the Energy Bills Support Scheme
Households to start receiving £400 off their energy bills from October, with the discount made in 6 instalments to help families throughout the winter period
government confirms today important details of the Energy Bills Support Scheme, which will provide energy bill discounts to 29 million households across Great Britain
today’s announcement comes as the government launches a new online one stop shop setting out ways homeowners can help to heat their properties as part of wider Help for Households campaign
Millions of households across Great Britain will receive non-repayable discounts on their energy bills this winter, as the UK government today (29 July 2022) sets out further details of the Energy Bills Support Scheme.
The £400 discount, administered by energy suppliers, will be paid to consumers over 6 months with payments starting from October 2022, to ensure households receive financial support throughout the winter months.
Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.
Traditional prepayment meter customers will be provided with Energy Bill discount vouchers in the first week of each month, issued via SMS text, email or post, using the customer’s registered contact details. These customers will need to take action to redeem these at their usual top-up point, such as their nearest local PayPoint or Post Office branch.
In all cases, no household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report these to the relevant authorities where they are suspected.
Business and Energy Secretary Kwasi Kwarteng said: People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.
“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.”
Chancellor of the Exchequer, Nadhim Zahawi, said: “We know that people are struggling with rising energy prices which is why we have taken action with support over the winter months to help ease the pressure on household budgets.
“This £400 off energy bills is part of our £37 billion of help for households, including 8 million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.
“We know there are tough times ahead and we will continue to do everything in our power to help people.”
Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023. The non-repayable discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.
This means that where a person’s housing circumstances change during the 6-month period, such as those leaving or moving home, they will still benefit from the relevant portion of the total £400.
This also applies to students and other tenants renting properties with domestic electricity contracts from landlords where fixed energy costs are included in their rental charges. In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.
As part of this package, we are confirming today that further funding will be available to provide equivalent support of £400 for energy bills for the 1% of households who will not be reached through the EBSS. This includes those who do not have a domestic electricity meter or a direct relationship with an energy supplier, such as park home residents. An announcement with details on how and when these households across Great Britain can access this support will be made this Autumn.
Details set out today will ensure the scheme is delivered to as many domestic electricity customers as possible over the winter, regardless of which supplier they use or their choice of payment method.
Direct Debit customers will receive the Energy Bill discount automatically as a deduction to the monthly Direct Debit amount collected, or as a refund to the customer’s bank account following Direct Debit collection during each month of delivery
standard credit customers and payment card customers will see the Energy Bill discount automatically applied as a credit to standard credit customers’ accounts in the first week of each month of EBSS delivery, with the credit appearing as it would if the customer had made a payment
smart prepayment meter customers will see the Energy Bill discount credited directly to their smart prepayment meters in the first week of each month of delivery
traditional prepayment meter customers will be provided with redeemable EBSS Energy Bill discount vouchers or Special Action Messages (SAMs) in the first week of each month, issued via SMS text, email or post. Customers will need to redeem these at their usual top-up point
Steps are also being taken to protect consumers from the risk of fraud, gaming, and non-compliance. Suppliers will be expected to report to government action they are taking to ensure the support has been passed onto consumers, including notifying customers in writing they have received the £400 Energy Bill discount from HM Government, and ensuring it is clearly shown on bills or statements for Direct Debit and credit customers.
Greg Hands Energy Minister said: “Today we have set out how the government will deliver discounts to help 29 million households with their energy bills this winter.
“I encourage families across the country to engage with these plans and particularly those customers on traditional prepayment meters who need to take action.
“Coupled with world-leading action to radically enhance our home-grown energy security, we will continue to be on the side of British consumers now and into the future.”
The Energy Bills Support Scheme forms part of the government’s £37 million Cost of Living Support package, providing Help for Households with rising prices, targeted at those most in need.
Households most in need will be eligible for further support in addition to the Energy Bill discount. This includes:
a £650 one-off Cost of Living Payment for around 8 million households on means tested benefits
a £300 one-off Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment
a £150 one-off Disability Cost of Living Payment for around six million people across the UK who receive certain disability benefits
a £500 million increase and extension of the Household Support Fund available to councils to support vulnerable households with the cost of essentials such as food, utilities and clothing
Today’s announcement comes as the government launches an online service to help homeowners save money on their energy bills by providing a one stop shop of ways to make properties more energy efficient.
The new GOV.UK website, originally available through the Simple Energy Advice (SEA) service, offers a breakdown of support available through various schemes and how much financial support they can receive towards energy improvements.
This is part of the government’s ‘Help to Heat’ support, investing £12 billion to make homes, particularly for low-income households, warmer and cheaper to heat, already delivering average energy bill savings of around £300 a year.
Lord Callanan, Energy and Business Minister, said: “This is a challenging time for many amidst the rising cost of living, which is why the government is stepping in with direct support.
“From delivering discounted energy bills throughout the winter months to launching a new website providing homeowners with help to make homes cheaper and warmer, we want to make sure UK residents have the information they need to access all the support that is on offer.”
Dom Littlewood visited the Matheson family in Edinburgh as they navigate increasing energy bills and the rising cost of living
Part of a new mini-series, titled What’s Watt, Dom helped the Mathesons follow practical steps to better manage their energy use, including using their smart meter’s in-home display (IHD)
By following the advice, the family has been able to reduce their energy bills from around £7-8 per day to under £5
What’s Watt launches alongside the second chapter of the Super Smart Energy Savers Report, with research by Smart Energy GB revealing that 33% of Scots say that this is the first summer that they’ve taken action to reduce their energy use
Video caption: Dom Littlewood and Smart Energy GB launch a new online mini-series as part of the Super Smart Energy Savers campaign, tracking the Matheson family in Edinburgh as they take steps to better manage energy use and take control of their household budgets.
A family of four in Edinburgh have made significant savings on their energy bills after taking part in a new series with presenter and consumer champion, Dom Littlewood.
Jane and John Matheson, from Edinburgh, recently moved in together along with their two children. Since doing so, their energy bills have increased by more than three times what they were paying when they lived separately.
The new mini-series, What’s Watt, created by Dom Littlewood and Smart Energy GB follows Dom as he visits families across Great Britain including the Mathesons in Edinburgh, to help them navigate increasing energy bills and the rising cost of living.
The Matheson family followed Dom’s practical advice to better manage their energy usage and help reduce their household bills by an average of £75* per month since his visit.
They’ve achieved this by following advice such as shutting doors more often, turning down the temperature on their washing machine and using their smart meter’s in-home display to monitor their energy use in near-real time in pounds and pence.
Jane Matheson said: “Since Dom’s visits we’ve been shutting doors more often, turning lights off, turning our washing machine down to 30 and only washing full loads. The tumble dryer thinks it has been made redundant, we have turned our thermostat down, ordered new insulating curtains and made enquiries about loft insulation.”
By making these small changes, Jane and John are hoping to instil positive habits in their children, so they can continue to reduce their energy usage and spending into the winter months.
The series launches as research finds that four months on from April’s energy price cap increase, over a third (33%) of Scots say this is the first summer they’ve taken action to reduce their energy use, after typically paying less attention to bills during the warmer months.
Despite many taking actions already, one in five (26%) Scots would like more advice on ways to save energy in the summer, with 25% wanting tips they haven’t heard before.
Following this demand for new tips, Dom Littlewood and Smart Energy GB have also teamed up with consumer advocates Helen Skelton and MoneyMagpie, to co-author the second chapter of the Super Smart Energy Savers Report.
The panel has been formed with combined expertise to ensure it features actionable advice to help all households manage their energy use and take control of their household budgets.
Advice from the Super Smart Energy Savers Panel includes:
Get the most out of your fans – choosing the right fan is key to staying cool and in control of your energy bills. Making sure any fans or cooling equipment you have around the house are as energy efficient as possible will reduce your consumption of electricity. The way you use your fan is important too: for example, some have timers that enable you to save energy when you’re asleep; or placing a bowl of ice in front of your fan will lower the temperature of the air circulating in the room and cool you down quicker.
Get a smart meter – smart meters ensure your bills are accurate and come with an in-home display that shows exactly how much energy is being used in near-real time and in pounds and pence, giving customers more control over their energy use. If you’re trying to reduce your energy use to keep bills down, knowing how much you are using – and what you’re spending – can be a huge help. As can knowing what the bill will be before it arrives. And they’re available at no extra cost from your energy supplier.
Switch to a summer routine – maybe you use your tumble-dryer regularly during the winter but using a tumble dryer three times a week costs approximately £223 a year**, so think about drying washing outside if you’re able to in the summer. It will dry much quicker and cost less than using a tumble-dryer.
Dom Littlewood, TV presenter and consumer advocate comments:“Filming this series and meeting the Mathesons was an eye opener. It’s clear that people have become more energy conscious this year – even though sometimes it’s one member of the home leading the change.
“Whilst households are taking lots of positive steps to manage their energy use, by working directly with families we found we were able to identify some further small steps they could take, such as getting a smart meter to monitor energy use.
“My new content series, What’s Watt, and the Super Smart Energy Savers Report offers households access to information they may not have seen before, so they have more tricks up their sleeve when it comes to taking control of their household budgets.”
Victoria Bacon, Director at Smart Energy GB, comments: “Summer is traditionally a time that energy use and bills are pushed to the back of our minds, but the increase in energy prices this year has changed that.
“With the temperatures soaring over the last couple of weeks, people are even more mindful of how much energy they’re using in the home just to keep cool and want to understand how to keep bills as low as possible.
“Understanding your energy use can have a big impact on habits – shown by how much more those with smart meters are reducing their energy bills compared to those without. It’s difficult to change what you can’t see, so using a smart meter’s in-home display to monitor energy use in near-real time helps you stay in control.”
New report calls on Government to update its energy bills support to help the most exposed households and consider introducing a social tariff.
Negligent energy regulator Ofgem enabled now bankrupt energy firms and inexperienced CEOs to increase energy bills further.
A national homes insulation programme is the permanent solution to bringing down bills and should be launched urgently.
The Government should immediately update its package of support to help households with soaring energy bills before the cost-of-living crisis grips even harder following October’s energy price cap increase, according to a new report by the Business, Energy and Industrial Strategy Committee.
It comes as people are feeling the squeeze of 40-year high inflation of 9.4% – to which the cost of energy is a big contributor – as wage increases struggle to keep up.
Support package out of date
The Government’s Energy Bills Support Scheme provides a £400 discount on energy bills in October for every household, a £650 means-tested one-off payment to eight million low-income households, £150 for those on disability benefits and £300 for pensioners. This was designed when the forecast for the October price cap was £2,800.
With wholesale energy prices continuing to rise industry experts now estimate that the price cap could increase to £3,244 in October, when the NEA forecast one in three (8.2 million) households face fuel poverty. A further rise is expected in January and MPs on the Committee warn that the size of the package has been ‘eclipsed by the scale of the crisis’.
Social tariff and support for vulnerable people
They also raise concerns that the current scheme does not sufficiently target low-income households and those in vulnerable circumstances, with the £400 discount going to some bill payers who don’t need it and repeatedly to people who own multiple homes. The Committee urges the Government to ensure that any update to its support scheme is better targeted at customers who need it the most.
As low-income households struggle to pay their energy bills and get deeper into debt, MPs call on the Government to work with energy suppliers to develop a scheme to help households pay off debts over a longer period.
In the longer-term, the report calls out the injustice of vulnerable people, who are unable to pay their energy bills, being moved on to more expensive prepayment meters.
The report labels this as “unacceptable” and urges the Government to consider replacing the market-wide price cap with a discounted social tariff for vulnerable customers, and a relative tariff for the rest of the market – that caps the difference between the cheapest and most expensive tariffs a supplier offers.
Committee Chair Darren Jones said, “Once again, the energy crisis is racing ahead of the Government. To prevent millions from dropping into unmanageable debt it’s imperative that the support package is updated and implemented before October, when the squeeze will become a full-on throttling of household finances and further tip the economy towards recession.
“We were told by a number of witnesses, ‘if you think things are bad now, you’ve not seen anything yet’. This Winter is going to be extremely difficult for family finances and it’s therefore critical that public funds are better targeted to those who need it the most.
“It’s an injustice that the poorest households continue to pay higher energy costs because they’re on prepayment meters. This must end and a social tariff should be brought forward.
“Ultimately, Ministers know that the long-term solution is to reduce our need for energy through insulation works that keep our homes warm in winter and cool in summer. If the Government is really taking this energy crisis and the country’s net zero targets seriously it will come forward with a bold, fully funded, national home insulation program before the end of the year.”
This could increase if the Government is unable to recover the cost of running the special administration of Bulb through its sale and decides that billpayers must pick up the costs, something the report says should be paid for through general taxation.
Ofgem’s incompetence over many years enabled inadequately resourced and inexperienced founders to start energy companies. It failed to supervise regulated companies, which in turn took high risk decisions including not hedging properly and using customers money to offer unsustainable prices that undercut well run energy companies. Ofgem failed to use its existing powers and didn’t bring action against energy suppliers even when it was clear that they should have done.
Ministers and regulators believed deregulation would drive competition, but it instead left an over- exposed and unregulated market which ultimately crashed, costing taxpayers billions of pounds. This market failure is only comparable to the banking crisis of 2008, according to MPs.
Ofgem is pressing ahead with a major package of regulatory reform to reverse its previous shortcomings and shore up the financial resilience of the market, but the Committee remains sceptical of Ofgem’s ability to undertake this task. If measures are poorly designed and executed, they risk further destabilising the market and distorting competition.
Insulating homes to permanently reduce demand
Helping customers pay their energy bills is not a sustainable position for Government and volatile gas prices are expected to be a longer-term concern for the country. It is therefore urgent and essential that Ministers bring forward a fully funded, national campaign to insulate people’s homes – street by street, community by community – in order to reduce the country’s demand for energy.
This report urges the Government to stop announcing short-term policies and moving existing budgets around and instead fully fund a national retrofit programme that businesses, homeowners, and tenants can invest and take part in.
Such a programme is required not just to reduce the cost of energy in winter but to also keep homes cool in extreme heat, reduce the cost of cooling as well as heating, and help the country hit its net zero targets as set out in the Committees previous report on Decarbonising heating in homes
Cash strapped families are being offered tips on free summer holiday activities to keep the kids entertained.
The team at NetVoucherCodes.co.uk have identified ten enjoyable, engaging and completely free activities for children of all ages.
From spending quality time outdoors, or staying inside on rainy days, all ten activities engage the whole family and combine imagination and entertainment for those ‘no spend’ days.
During school holidays and at weekends, finding things to do with the kids can soon become expensive and tiresome.
These activities are perfect for keeping the whole family entertained at no cost.
John Stirzaker from NetVoucherCodes.co.uks aid: “It can become costly to keep the kids entertained especially through the summer holidays.
“A lot of people aren’t aware of some great activities you can put together for your kids at no cost – it just takes a little imagination.
“As well as coming up with some creative tasks at home, there are also some days out that allow kids to go free.
“If you do some research on your local area, you’ll probably find that there are free events worth taking advantage of like crafting, and sports days.”
10 free activities to do with kids:
Go Geocaching
This is a brilliant way to explore new parts of your local area with the kids. Geocaching is essentially a modern-day treasure hunt: simply download the free app and follow the directions to the nearby location, to then find and log the hidden geocache.
Become ‘Mad Scientists’ in the kitchen
It is really easy to make fun science experiments with ingredients found in the kitchen. Mix cornflour and water to make slime, or drop food colouring onto baking soda, and use a straw to drip white vinegar to create a bubbly volcanic eruption.
Visit free local museums
It takes just a quick look online to find many nearby museums with free entry which cater to families. Explore history, science, and culture during the bad weather, and take part in the free interactive events which many museums put on for kids.
Potato stamp art
A great way to use up any old potatoes, stamp art is a fun entertainment for the kids at home, completely for free. Just cut the potato in half (or anything else in the cupboard needing to be used up), cover with paint, and let the kids create their artwork. For older ones, let them carve out a shape in the potato for a patterned veggie stamp.
Free local events
Check the local council website for kid-friendly entertainment, such as crafting, library and sports days. Especially during the summer holidays, engaging with the local community in these events is a great way to do something different for free.
Obstacle course
Be inventive with things around the house! Use buckets, mops, tin cans and chairs to set out an obstacle course for the kids to let off some energy. A low prep, but highly entertaining activity inside or out with endless opportunities.
Home cinema
Amplify those cosy film nights on the TV with fort making: use pillows and blankets to create a free evening-in with the kids. Grab popcorn and sweets from the cupboard for a no cost cinema experience at home.
Treasure hunt
An alternative to Geocaching, use pens and paper to create a free treasure hunt for the kids. A good way to get outside, hide a small reward and draw out a simple map of the surrounding area with a ‘X’ to mark the treasure. To involve the kids even more, get them to colour in the trees, rivers, and other landmarks, on the map, and wipe the map over with a used tea bag for an old-fashioned pirate treasure map feel.
Tie-dye old clothes
A great way to revamp unworn clothes, tie-dying is a free activity to entertain older kids. Tie elastic bands in small sections to the clothes, and submerge into a bucket with half water, half bleach. Let the clothes sit in the mixture for 10 minutes, remove the elastic bands and rinse thoroughly. Wash the clothes, and then the kids can show off their new colourful items, without having spent a penny.
Colours scavenger hunt
Simply shade colours onto some paper and get kids to find flowers, stones, and other outside materials, which match the colours. A fun and easy way for younger ones to learn their colours whilst spending time outside at absolutely no cost.
Over 7.2 million payments of £326 have been made to help households through the UK government’s Cost of Living support.
7.2 million payments of £326 – worth a total of £2.4bn – made in first week of Cost of Living support rollout
Payments mark the first half of the £650 Cost of Living payment for low-income families, with the second half coming in the autumn
Additional support for disabled people and pensioners will follow later this year
This means £2.4bn has been paid out to low-income families in England, Wales, Scotland and Northern Ireland, with the second instalment of £324 arriving later this year.
The first payments were made on 14 July 2022, meaning the government has paid on average over a million families every working day since then.
This is all part of the government’s £37 billion support package for households. Millions will get £1,200 this year to help them with rising costs, including this £650 payment, a £400 grant to help with energy bills, and a £150 Council Tax rebate for the 80% of households in bands A-D.
And in addition to this, nearly one in 10 people will get a £150 disability payment this autumn, while over eight million pensioner households could receive an extra £300 through their Winter Fuel Payments in November and December.
Work and Pensions Secretary, Thérèse Coffey said: “This government said that we would protect those on the lowest incomes, and we have delivered what we said with over 7 million households receiving £326 in the last week.
“There is more help to come for households, with the second half of the £650 payment arriving later this year and further payments for pensioners and disabled people also on the way.”
Chancellor of the Exchequer, Nadhim Zahawi said: “I know that people are finding things difficult with rising prices and increasing pressure on household budgets.
“That’s why we’re taking action to control inflation and providing immediate help for households. It’s so important that over 7 million vulnerable households have received £326 direct payments so far and there is also more help to come, with 8 million of the most vulnerable households receiving £1,200 of direct support to help with bills over the winter.”
In total, over eight million families will be eligible for this payment, with around one million eligible because they receive tax credits and no other eligible benefits. These families will receive their first instalment from HMRC in the autumn, and the second instalment in the winter.
DWP will administer payments for customers on all other eligible means-tested benefits, and no one needs to contact the government or apply for the payment at any stage.
Those who are eligible should look out in their bank accounts for a payment of £326 with the reference “DWP Cost of Living” in their bank accounts. This payment is made automatically, meaning no one has to apply or do anything to receive it.
Eligible claimants who have not received their payment yet should not be concerned, as the DWP expects some payments may take until 31 July 2022 to come through.
Holiday childcare prices jump by 5%, amid cost of living crisis, as parents working full time struggle to find the childcare they need
Families across Britain are bracing themselves for a difficult summer as a sharp rise in holiday childcare prices and patchy availability of places hits working parents, Coram Family and Childcare’s 17th annual Holiday Childcare Survey has revealed.
Coram’s report finds that, amid the soaring costs of living, holiday childcare costs have jumped by 5% since 2021. The average place at a holiday club now costs £148 a week – more than double what parents pay for an after-school club during term time.
Families will now find themselves almost £900 out of pocket for six weeks of holiday childcare for each school age child, nearly £500 more than they would pay for six weeks of term time childcare before and after school. Some 42% of local authorities across Britain have reported that the pandemic had caused an increase in prices.
The survey also found considerable regional variation in prices across Britain, with parents in inner London paying an average of £161 per week compared to £135 in the West Midlands, an 18% price difference. There are also huge price differences within the same area, with some holiday childcare places in inner London costing 92% more than the average, while others cost 44% less.
Alongside the financial strain, parents are struggling to find the childcare they need, with only 27% of English local authorities having enough holiday childcare available for parents in their area who work full time, down 6% on last year. Parents of disabled children face the most acute challenge with only 7% of local authorities having enough holiday childcare for these families, plunging from 16% in 2021.
Other notable gaps in England include holiday childcare for children whose parents work atypical hours and children living in rural areas, with only 10% and 15% of local authorities respectively reporting they have enough childcare availability for these groups.
Ellen Broomé, managing director of Coram Family and Childcare, said: “Families across Britain are reeling from record inflation and this steep rise in holiday childcare will push many further into financial distress.
“Many parents, particularly mothers, will have no choice but be locked out of work altogether or struggle to pay for basic necessities such as food or rent.
“Holiday childcare is key economic infrastructure. The lack of childcare places for working parents is a serious problem – not just for families but for the country’s economic output. Children have experienced such disruption throughout the pandemic, and holiday childcare offers them a safe and fun space to stay active and connect with their friends while also helping to tackle the summer learning loss.”
Coram Family and Childcare is calling on the UK, Scottish and Welsh Governments to:
Reform Universal Credit so it does not lock parents out of work – by increasing the maximum amount of childcare costs paid under Universal Credit and guaranteeing support for upfront childcare costs.
Increase support for Family Information Services to provide good quality holiday childcare information and broker access to local provision that meets families’ needs.
Expand provision of the Holiday Activities and Food programme to improve access to affordable, high quality childcare for all children who need it.
Support local authorities to ensure they have a comprehensive overview of the cost and availability of holiday childcare in their area to identify and plug gaps in provision.
Energy regulator Ofgem has told a number of energy suppliers to take immediate and urgent action, after a review found a range of weaknesses or failings in the way they charge customers direct debits.
Out of a total of 17 large suppliers in the market, the majority were found to only have minor issues, but five were found to have ‘moderate or severe’ weaknesses with Ofgem demanding immediate action.
This is an initial snapshot of findings and suppliers affected will now have to submit action plans within two weeks to set out how they will take the required actions, which Ofgem will scrutinise for effectiveness and comprehensiveness.
Although we have not found evidence of unjustifiably high direct debits, as an additional reassurance for consumers, the regulator will require all suppliers that increased their customers’ direct debits by more than 100% (impacting over 500,000 customers) to review them.
Where appropriate, Ofgem also expects suppliers to adjust any miscalculations, including making repayments if needed, and consider whether a goodwill payment is warranted.
The review of domestic energy suppliers found that:
Over 7 million energy consumers on a Standard Variable Tariff (SVT) saw an increase in their direct debit between February and April 2022
On average, direct debit levels for customers on an SVT increased by 62% in this period. Most of this reflects the increased cost of gas*
8% of SVT customers seeing an increase (around 500,000 households) experienced an increase of more than 100% and Ofgem is concerned by this and wants to ensure there is good reason for it (e.g., coming off an SVT, increase in energy use etc)
Evidence that some suppliers’ processes are not as robust as they could be, and that this could lead to inconsistent, incorrect or poor treatment for customers
A lack of formally documented policies and processes within some suppliers, which risks inconsistent and poor consumer outcomes.
Ofgem recognises that increases experienced by consumers will differ depending on a range of factors, and that some of these, such as recent tariff changes, high debit balances or recent meter reads, can drive large adjustments to customer direct debits.
But it is for suppliers to ensure that direct debits are set correctly based on all relevant information available, and that they clearly communicate any changes in a way that helps consumers understand their payments.
Jonathan Brearley, Ofgem CEO, said:“We know how hard it is for energy customers at the moment so it’s crucial that the amount they pay each month in direct debits is right so they can manage their money.
“Suppliers must do all they can, especially during the current gas crisis, to support customers and to recognise the significant worry and concern increased direct debits can cause.
“We know there is some excellent service out there, but we want to make sure that it’s consistent and standard across the board. It’s clear from today’s findings on direct debits that there are areas of the market where customers are simply not getting the service they need and rightly expect in these very difficult times.
“Today’s findings show that with the urgent changes we are now expecting, the current system will be much fairer for consumers. Bringing down the price of gas is not in Ofgem’s control; however, we will do all we can to have a fair system and ensure suppliers look after their customers.”
The Ofgem assessment divided supplier findings into three groups:
No significant issues (four suppliers)
Minor weaknesses (seven suppliers)
Moderate to severe weaknesses (five suppliers)
Suppliers in the first group, with no significant issues found, are British Gas, EDF, ScottishPower and SO Energy. Our review found that these suppliers generally had robust processes in place, although we did make some recommendations for improvement, and Ofgem will work with these suppliers for continuous improvement. We are asking these suppliers to review customer direct debits to ensure they are correct, as an additional assurance for consumers.
The second group, with minor weaknesses, consisted of Bulb, E.ON, Octopus Energy, Outfox the Market, Ovo, Shell and Utility Warehouse. For this group of suppliers, we identified some weaknesses or gaps in their processes that could lead to poor consumer outcomes.
Examples include lack of documented policies or guidance for staff, potentially not taking account of all relevant factors when setting customer direct debits, or risks that some customers’ direct debits are not assessed when appropriate. We have started compliance engagement with these suppliers to secure improvements.
Suppliers in the third group had moderate to severe weaknesses identified. This group includes Ecotricity, Good Energy, Green Energy UK and Utilita Energy, and covered a spectrum of weaknesses, ranging from inadequately documented or embedded processes, weak governance and controls, to an overall lack of a structured approach to setting customer direct debits.
Ofgem is concerned that in some cases this could lead to customer direct debits being set incorrectly, or not being evaluated for a long time, which can cause the build-up of either unnecessarily large credit balances or debt, depending on whether the customer is under- or overpaying.
Ofgem is starting compliance engagement with these suppliers to drive rapid and robust improvements to processes and reassess customer direct debits where necessary. If these suppliers don’t take action fast enough, Ofgem will consider enforcement action.
Also in this group, with severe weaknesses were TruEnergy and UK Energy Incubator Hub (UKEIH). In both cases we found suppliers did not have a consistent and structured approach to setting customer direct debits, and found severe concerns over the maturity of their processes, putting consumers at a serious risk of inconsistent or poor outcomes, with need for rapid and significant improvement.
To this end, we are considering whether enforcement action is warranted. Since the findings were made, UKEIH have ceased to trade and so we will not pursue any further action against them.
If Ofgem does not see swift and sufficient improvement, as well as redress for consumers where necessary, the regulator will not hesitate to initiate enforcement action against more suppliers, which can include fines, enforcement orders and banning the acquisition of new customers.
Ofgem has now instructed suppliers to:
· review the accounts of all customers whose direct debit was increased by 100% or more between 1 February and 30 April 2022, to assess whether the uplift was appropriate
· adjust any miscalculations and consider whether a goodwill payment is warranted in the circumstances
· address any process issues which may have incorrectly led to significant increases or other poor consumer outcomes, such as systemic over- or underpayment, and
· submit action plans within two weeks to set out how they will take the required actions, which Ofgem will scrutinise for effectiveness and comprehensiveness.
Journalistic website Money Saving Expert (MSE) sent Ofgem a dossier of information earlier this year on the same issue, after it was raised by consumers.
This is all part of the wider work that Ofgem is doing to make the energy market fairer, including a robust recent review into lessons learnt from Storm Arwen, a more frequent and fairer price cap, and most recently, action to improve the financial resilience of companies.
Rocio Concha, Which? Director of Policy and Advocacy, said:“The cost of living remains consumers’ number one priority, yet Which? has heard concerning stories of consumers having their energy direct debits miscalculated or increased by huge amounts, while our research shows many customers are struggling to understand their bills and pricing.
“It’s encouraging to see the regulator taking action over poor performance and Ofgem should not hesitate to impose penalties on any suppliers that fail to make the necessary improvements.
“At a time when consumers are paying more than ever before for energy, the regulator must also work with government and suppliers to explore ways of using data proactively to offer targeted support to those in most need of help before they have to turn to debt charities.
“Which? will seek to work with businesses in energy and other key sectors to find more ways to support consumers through the tough times ahead.”
