Disappointment at Governments Lack of energy Support

Care England, has today expressed disappointment at the energy bill support announced by the Chancellor on 9 January 2023 which leaves little financial support for energy beyond 31 March 2023.

Professor Martin Green, Chief Executive of Care England, says:
“Yet again, the care sector has been let down. The Chancellor and Health and Social Care Secretary of State continue to talk about their financial awards for the care sector which omits a multiplicity of requirements and conditions attached leaving little to address the cost of living and inflationary impact devastating the sector. In essence, there is no benefit to a care provider under the Chancellor’s new support scheme. Those who renewed their energy contracts in 2022 are likely to remain with a devastating 250% to 400% increase in energy costs. What the government has failed to address again ahead of April 2023 is the additional premia which are not covered by the announced support scheme; energy suppliers add to cover shipping and transportation of gas and electricity on top of daily standing charges and “risks” of customer failure which doubled in 2023 for gas from around 1p to 2p per kWh and increased from around 12p to 25p per kWh for electricity.

For an average 50-bed care home, the difference is an increase of energy from around £40,000 to over £120,000 per annum. Care England worked tirelessly to provide the Department for Business, Energy and Industrial Strategy and Department of Health and Social Care a raft of data to evidence the impact energy inflation is having on the care sector, yet it appears to have been totally ignored.”

A care provider who in October 2022 renewed their energy contract would have received a discount off the wholesale energy price for electricity of just under 45p per kWh. The same provider will see that discount reduce to 1.96p kWh from 1 April 2023. The same can be said for gas which would have seen a discount of 7.4p kWh reduced to 0.697p kWh from 1 April 2023.

The Chancellor offered a minimal discount off the wholesale price yet those wishing to secure energy contracts cannot achieve anything like the wholesale price which excludes the heavily inflated standing charges, on-costs and risk premia charged by energy suppliers.

Care providers who seek to renew their energy contracts will see no discounts applied until the wholesale price exceeds 30.20p per kWh for electricity and 10.7p per kWh for gas. The current wholesale price for gas is 5.7p and electricity is around 17p per kWh. This means that those securing energy currently are unlikely to benefit from any of the government’s discounts unless the energy price doubles.

Details of the announcement can be found here.

Martin Green continues:
“When will this government talk to the adult social care sector, listen to its problems, and act appropriately? When will it sit down and talk about how a correctly funded social care sector can support the NHS with discharges from hospital and reduce A&E admissions? The kickback from government will be that £7.5bn has been injected into social care over the next two years. The reality is this; when split between child and adult services, addressing 200,000 new care packages, and supporting the early discharge of people from hospital into care to ease the NHS backlog, this figure leaves far less than is needed to address the catastrophic inflation experienced in 2022 and the ONS predicted 7.4% inflation for 2023, which becomes worsened now given little to no discount is offered to care providers for energy. Social care needs to stop being seen as the problem and engaged to participate as part of the solution.”