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Citizens Advice response to BEIS’s consultation on the Energy Company Obligation (ECO 3) 2018 to 2020

7 August 2019

Citizens Advice response to BEIS’s consultation on the Energy Company Olbigation (ECO 3) 2018 to 2020 [ 290 kb]

We welcome the reorientation of ECO to focus on fuel poor households. It’s right that the limited funding available is focused on the people who need it most. However, overall national support for energy efficiency has decreased considerably in recent years.

The Committee on Fuel Poverty (CFP) has demonstrated that the amount of funding available within the supplier obligation falls far below what is required to meet statutory fuel poverty targets.

Other policies risk increasing this gap further. For example, minimum energy efficiency standards in the private rental sector should play a significant role in meeting the fuel poverty target. However, current proposals for a £2,500 cost cap will lead to a further funding shortfall.

More generally, the government needs to set out its coordinated plans for meeting its fuel poverty targets, including the funding gap. This includes its plans for the ECO funding beyond 2022, which we expect to involve moving beyond the current competitive supplier obligation model. Although we support continuing the supplier obligation to 2022, the competitive supplier delivery approach is not the best way to deliver the fuel poverty strategy in the long-term. Suppliers require a wide pool of eligible households to target, to limit the costs of finding households to help. This cannot be sustained if the government is to achieve the fuel poverty target cost-effectively.

The ECO delivery approach can also lead to a poor customer journey. Eligibility does not mean entitlement to help if it does not align with a supplier’s delivery plan. Even if they are referred into the scheme because of a health condition, consumers are not guaranteed support. There is a lack of transparency over what help is available, and what client contributions are required.