Thousands of homes could miss out on crucial financial support to help cut their energy bills permanently.

The Energy Company Obligation (ECO) is the longest running fuel poverty scheme in Great Britain. Across the country it has provided energy saving measures, such as insulation and upgrading heating systems, to 523,045 existing ECO homes, making their homes warmer and cheaper to heat.

Despite promising that funding to support warmer homes would not be cut, the Chancellor is reportedly considering a U-turn and slashing funding to this important scheme, a move that would hit the worst-off households hardest as they struggle with persistently high energy bills.

The charity National Energy Action estimates that around 6 million people live in fuel poverty. Energy bills hit record levels during 2022/23 as international gas prices spiked as result of Russia’s invasion of Ukraine and other global factors. While bills have fallen since, they remain over 80% higher than four years ago and driven by the volatile price of gas.

Analysis has shown that previous cuts to the ECO programme actually added billions of pounds to customers’ bills, who could have otherwise benefited from the resulting savings, particularly during an extended period of high energy costs.

In addition to high energy bills, the UK has some of the draughtiest homes in Europe and those living in them are more likely to be on low incomes and unable to afford upgrades without support. This means that people are facing higher bills than necessary as heat escapes through windows, roofs and doors.

Improving energy efficiency reduces people’s bills permanently. The latest round of ECO has run from April 2022 and ends in March next year. Over that time an estimated £138.5 million has been cut from bills every year, as customers see their annual energy costs reduced by hundreds of pounds.

Whilst there is a clear need to take action on bills immediately, this is a step in the wrong direction as it means millions of low-income households will lose the chance to cut their energy bills permanently.

It’s wrong that those can least afford it are most likely to pay more for their energy because of draughty properties.

There are other measures the Government could take which could bring down bills immediately and won’t come at the expense of desperately needed support for low-income households.

Stew Horne, Group Head of Sector Intelligence and External Affairs, Energy Saving Trust said:
“The Energy Company Obligation provides vital support to make low income and fuel poor homes warmer and we urge the Chancellor to protect this crucial funding. Cutting this funding would be a significant setback for thousands of households already struggling with high energy bills.

The UK government’s forthcoming Warm Homes Plan must address the root causes of high bills namely our ongoing dependency on imported gas. Improving the energy efficiency of people’s homes and upgrading their heating systems is the most effective way to permanently bring people’s bills down.”


Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:
“We obviously understand the urgent need to cut energy bills, but the Chancellor is in danger of making a grave error.

"Cutting funding for energy efficiency measures would undermine efforts to reduce energy demand, improve cold, damp homes and ease long-term pressure on the NHS."