The Government has pledged to help households save more than £300 per year on their energy bills, but an industry commentator believes the plans announced today will leave many out in the cold.  

The Home Energy Saving Programme, a £1bn package unveiled today by Prime Minister Gordon Brown, will assist homeowners to make their homes more energy efficient, according to the Government. It requires a £910m commitment from energy companies, in addition to an existing obligation on these companies to spend £2.8bn on helping customers save energy over the next three years.

The Government and industry contributions combined will amount to a £6.5bn programme of improvement in the nation’s housing stock. Where practical, the Government aims to have all British homes insulated by 2020.

In addition to measures outlined in the last Budget, Brown announced today that Cold Weather Payments will increase from £8.50 to £25 per week for winter 2008/9. The Warm Front scheme will also reduce 40,000 households’ fuel bills by £180 per year on average, according to the Government, with up to £2,700 of central heating and energy efficiency measures provided for low income and pensioner households.

However, the plan has been criticised as over-complicated by comparison site Energyhelpline, which claims it won’t have the immediate impact required for households struggling with rising bills.

Mark Todd, director of Energyhelpline, said: “Over the course of three years, £910 million will be given to help improve energy efficiency in homes through loft and wall insulation. That’s a meagre £10 per home, however energy insiders have revealed to us that there is already a £36 levy on a typical energy customer to fund energy efficiency measures – so it’s difficult to see who is really benefiting.

“This winter more than 5 million people will suffer from fuel poverty. They need help now, and they need it before the coldest weather hits this winter.”

Todd also said the Government’s announcement was misleading. “The freeze on energy bills for those on social tariffs is not new, most energy companies announced this when they raised their prices, following pressure from Ofgem,” he explained.

He questioned the Government’s understanding of the issues, claiming it has a short-term energy crisis on its hands, which requires immediate action. Instead, Todd suggested the Government extend the Winter Fuel Allowance to help the UK’s poorest people stay warm.

“If the Government gave £200 to the bottom quarter of households who do not quality for the Winter Fuel Allowance, around 5 million, it would cost £1bn. This is just over the amount outlined in the plans Gordon Brown has introduced today, but would have a direct and immediate effect on 5 million homes rather than 500,000.”