CIH response to Department for Energy Security and Net Zero (DESNZ) consultation on continuing the Warm Home Discount Scheme

We agree.

The Warm Home Discount is an important programme for supporting households in or at-risk of fuel poverty. We particularly welcome the commitment to continue the Warm Home Discount until 2030-31, alongside consideration of further additions and improvements that could be made to the scheme in between then and now. This will provide certainty for households, suppliers, and charities that energy bill support will continue, while allowing the scheme to be amended if necessary. 

We agree. 

We prefer option three. 

We support bringing the Warm Home Discount in Scotland broadly in line with the scheme in England and Wales. This will ensure that the onus is not on individuals in the current Broader Group to monitor when their specific application window opens and submit their information. Option three would be the best way of accomplishing this.

In relation to our preferred option three, the change in eligibility criteria would need to be clearly communicated to households. For households that may no longer be eligible to receive the rebate due to the change in criteria, mechanisms to signpost them to other forms of support should be explored. This should be in addition to the expansion of the helpline to households in Scotland. 

We strongly agree.

Industry Initiatives are a vital component of the Warm Home Discount programme. As the core eligibility criteria focuses primarily on means-tested benefits, Industry Initiatives provide important support to households in or at-risk of fuel poverty, but not in receipt of benefits.

As currently designed, Industry Initiatives also provide forms of assistance that go beyond the provision of a one-off rebate, such as energy efficiency measures, debt assistance, energy advice, and benefit entitlement checks. The impacts of these interventions include unclaimed benefits income and the permanently lower bills that accompany the installation of energy efficiency measures. Debt assistance is also vital, especially in the current climate of growing debt in the energy market. Lastly, the provision of training to frontline workers grows the expertise, capacity, and awareness of individuals and organisations that deliver energy advice as part of wider support roles, such as those working in money advice teams at housing associations.

As we understand it, Industry Initiatives are also an important part of the funding ecosystem for energy advice organisations. CIH works with many of these organisations, and the Warm Home Discount is essential for allowing them to maintain and grow their capacity, develop referral relationships with other organisations, and maximise the support they can provide to individual households as part of one intervention. With energy bills remaining high, the continuation of Industry Initiatives will allow energy advice organisations to continue work that is essential for alleviating and reducing fuel poverty. 

We agree.

Third-party partners, especially energy advice organisations, are typically best placed to understand how to design and deliver programmes that benefit households in or at-risk of fuel poverty. Partnership working between energy suppliers and third-party suppliers is therefore key. 

With regards to additional activities that could be funded, we broadly think that the nine categories of activities listed in the consultation remain appropriate and fit for purpose. We would make two small points:

• If the scheme envelope allows it in the future, we believe the payments made to eligible occupiers of mobile homes should be expanded to cover eligible occupiers of any home who do not pay bills directly to an energy supplier. In other words, we feel government should, in future, return to its proposals from earlier in 2025 to expand the scheme in this way. We have expanded on this point in our response to question 25 below.
• The provision of energy advice is essential, but must remain alert to the changing needs and circumstances of households in or at-risk of fuel poverty, especially in the context of the transition to a flexible, digitalised, low-carbon energy system, and climate change more broadly. For example, the need for energy advice on ventilation and keeping cool in summer is likely to grow in the coming years, as temperatures increase. The introduction of market-wide half-hourly settlement will also enable the proliferation of time-of-use tariffs, demand flexibility services, and initiatives such as heat-as-a-service. Households in or at-risk of fuel poverty could benefit from these services, but will require advice to do so in many cases. Overall, the provision of energy advice must be adaptable to the changing nature of the energy system and to climate change in the future, which will allow it to deliver the maximum possible benefit for households.

We also think that boiler and central heating replacements should continue to have a place in Industry Initiatives delivery. This is because some eligible households will have an immediate need for warmth if (e.g.) their old boiler fails in winter, and in these circumstances, a low-carbon alternative may not be suitable or deliverable at speed. However, we do encourage government to consider how this part of Industry Initiatives may need to be adjusted in the future, in light of statutory net zero targets and carbon budgets.

Debt write-off and rematching should also remain a part of the scheme, and should not be removed even if Ofgem’s Debt Relief Scheme clears a significant amount of historic debt from the market. As energy prices are forecast to stay high, debt will continue to accumulate in the coming years, and Industry Initiatives will therefore play an important role in ensuring ongoing access to some write-off and rematching is available.

Lastly, we share the views of some charities that greater transparency around the process, outcomes, and impacts of Industry Initiatives would be helpful. The annual Scheme Year reports from Ofgem provide a useful insight into the delivery of Industry Initiatives, but do not typically provide information on who is helped, how they are targeted or referred, or – importantly – what the impacts and outcomes of their interventions are. For example, the most recent Scheme Year report notes only two small case studies of pilot schemes, delivered by OVO and British Gas.

We recommend that, alongside the annual Scheme Year report, Ofgem collates and publishes a wider range of information about the process, outcomes, and impact of Industry Initiatives delivery. This could include case studies of individual programmes, such as those presented in the recent Scheme Year report. We think this would increase transparency, but also help government and Ofgem to demonstrate to stakeholders the impacts that Industry Initiatives programmes have on the health and wellbeing of households in or at-risk of fuel poverty. The exact information published should be agreed by Ofgem, suppliers and third-party delivery organisations, and we acknowledge that any procedure for publicising outcomes should be balanced against the need for suppliers and third-party delivery organisations to manage demand across each scheme year. 

Generally, we support an approach to Industry Initiatives eligibility that is flexible, and draws on the experience and expertise of third-party delivery organisations, especially energy advice organisations, working in partnership with energy suppliers. 

We welcome the opportunity to provide views in response to this question. We acknowledge that the fiscal climate is difficult for enhancing and expanding the Warm Home Discount, and that government has already delivered reforms to provide the rebate to more people, by removing the High Cost to Heat threshold. We supported these reforms in our response to the consultation earlier in 2025.

However, we strongly believe that in the medium- and long-term, the Warm Home Discount requires significant reform, and potential replacement, if it is to provide adequate support to households in or at-risk of fuel poverty. The current scheme remains broadly unchanged since before 2020. Meanwhile, wholesale energy prices have both climbed and become more volatile, energy network investment (funded by bills) has increased and will continue to do so, and energy market reform has not yet been able to pass the lower price of renewable energy to household bills. Fuel poverty, as measured by the government’s 10 per cent affordability indicator, has effectively doubled since 2020. In 2024, the average fuel poverty gap was modelled at £407, over double the value of the £150 rebate.

CIH strongly supports the action the government has taken to improve the energy efficiency of domestic homes, such as through the Warm Homes: Social Housing Fund. The publication of the Warm Homes Plan is likely to be a major step forward, and we support the vision and ambition that government has indicated it will include. However, for residents in the social housing sector, our research has shown that persistently low household incomes, relatively higher levels of ill-health and disability, and the widespread use of prepayment meters continue to be the primary drivers of fuel poverty, despite social housing being the most energy efficient tenure in England. Recent research based on an affordability indicator shows that in 2023, 26.1 per cent of housing association residents and 35.3 per cent of local authority residents were in fuel poverty – far more than other tenures.

We therefore believe future improvements or additions to the Warm Home Discount should be guided by the following key principles. We also believe that government should remain open to changing the structure of the scheme entirely, for example to introduce a form of energy social tariff, which CIH would support. Our suggested guiding principles for future changes are:

• Affordability. The depth of support that is provided to households must be guided by a rigorous assessment of the minimum that is required to enable people to access the energy they need for good health and wellbeing. If a rebate approach continues to be the preference of government, this at minimum needs to be guided by the fuel poverty gap both a) on average and b) for different groups of fuel poor and vulnerable households. We support the findings of a recent report by a group of charities, finding that increasing the discount to £400 could reduce fuel poverty by a similar amount to a 30 per cent discounted unit rate social tariff, but at £500 million less cost each year.
• Implementation across the entire energy market. It is critical households that do not pay their bills directly to an energy supplier can be brought inside the remit of the scheme in the future. As the professional body for the housing sector and with many of our members working for housing associations and local authorities, we would particularly like to see the rebate broadened to social housing residents who do not have a relationship to a domestic electricity supplier (e.g. those on private wire networks). According to government statistics, 24.6 per cent of social rented households received the rebate in 2024/25, over double the overall proportion of households receiving it (11 per cent), something which reflects the lower household incomes and high level of need in the sector. However, social rented households without a relationship to a supplier miss out on this support at present, despite likely having a similar level of need.
• Broadening eligibility and enrolment beyond means-tested benefits. We understand and acknowledge why the core rebate must be targeted at those in receipt of means-tested benefits. However, this largely excludes the approximately 1,100,000 households who are in fuel poverty, but not in receipt of benefits (using the government’s definition of fuel poverty and the 2024 fuel poverty statistics). We strongly support the work that government has initiated to amend the information sharing powers in Part 5 of the Digital Economy Act 2017. In the medium- and long-term, these powers should be used to target future bill support more accurately on the basis of income, as outlined in a recent report by a group of charities. However, we would note doing this will not remove the need for Industry Initiatives to exist; this will still be required to provide other forms of energy-related support to eligible households.
• Mitigating the impact of other policies. Changes to the energy market, combined with adjacent government policies on decarbonisation and digitalisation, could create complex and unforeseeable changes to energy affordability for different groups of households. Specifically, CIH supports the government’s intention to introduce Minimum Energy Efficiency Standards (MEES) in the social and private rented sectors. However, we are concerned that the design of that policy, especially the proposed inclusion of a time-limited spend exemption that will last until 2040, could leave residents in rented homes with health-related needs for continual warmth living in relatively inefficient, hard-to-heat homes for several years in the late 2020s and 2030s. For households in the least energy efficient homes (EPC Band E, F, and G), the average fuel poverty gap is between approximately £900 and £1,800. We think government should consider how to design the future of energy bill support to target deeper support to residents living in rented homes that may be exempt from MEES until 2040. In our view, this will be essential to avoiding the creation of a two-tier affordability structure in rented housing; homes that meet MEES (on the old or new EPC frameworks), and homes that are exempt until 2040 due to the cost of improving them.

We would welcome the opportunity to support the government in any work it undertakes on the above principles. 

To see the full consultation details visit the government’s website.

For more information on this response please contact Matthew Scott, policy manager, matthew.scott@cih.org.