National Energy Action (NEA) response to Call for evidence: data-matching and benefit letter evidencing routes in ECO4 and GBIS

Summary of our Response

NEA has previously engaged with ECO consultations, including the ECO4 consultation in 2021 and the Great British Insulation Scheme (GBIS, then-ECO+) in 2023. NEA has long made the case for improved use of DWP data-matching in order to capture vulnerable, fuel poor and low-income households who were not being identified and, as a result, failing to receive necessary support. We welcome the intentions of this call for evidence and the proposal to introduce automated DWP data-matching for evidencing eligibility. However, it is crucial that the impacts of either the proposal to introduce new data-matching evidencing routes or to remove existing evidencing routes on vulnerable households and those with protected characteristics are understood at a granular level.

In addition to the answers provided to the call for evidence’s questions, below, NEA suggests the following proposals:

• Communications regarding the use of automated DWP data-matching to evidence eligibility must consider diverse accessibility needs.
• Ofgem must undertake research to better understand, and mitigate, the impacts of proposals on vulnerable groups and those with protected characteristics.
• Data-matching must be complemented by utilisation of existing data held by suppliers.

Communications with households regarding the use of automated DWP data-matching to evidence eligibility must consider diverse accessibility needs.

While we approve of the use of data-matching to capture households who had previously fallen through the gaps in support, without understanding how this will be communicated to households, or how households (particularly those who are vulnerable) will interact with this process, we are  concerned about where households may have engaged with the data-matching process, been positively identified as eligible, but then do not receive measures due to their property characteristics.

As a result, it will be crucial to consider how accessibility needs may create barriers for households, particularly those with vulnerabilities, if communications aren’t carefully considered. For this, suppliers will need to think about how they currently engage with households and be mindful of any gaps in existing engagement.

There are a number of household characteristics which must be taken into account when designing these processes. A non-exhaustive list includes:

• Digital exclusion needs: older households and disabled households are more likely to experience these barriers, but there are lots of digitally excluded households who do not fall within these categories. If engagement takes place digitally, there must also be non-digital options for those without digital literacy or who face physical and/or financial barriers to digital assets, such as computers, smart phones, and wi-fi.
• Additional support must be provided for households with accessibility needs, particularly for disabled households. These households already face a premium due to a lack of accessible services, and thus it is paramount that they are able to access fuel poverty alleviation schemes such as ECO4 and GBIS.
• Low household income could not only result in lack of digital access due to financial barriers, but also may prevent households accessing schemes due to fear of losing access to benefits. This must be taken into consideration when designing household communications.

It is worth considering proxies for vulnerability that may enhance identification of marginalised households or those who are at risk of being missed out of support. There is a considerable risk that if fuel poor, low-income and vulnerable households are unable to access the benefits of ECO4 or GBIS, the schemes will face reputational damage. It may also be difficult to engage affected households at a later stage, therefore undermining the purpose of the schemes, which are designed to alleviate fuel poverty (at least for ECO4 and 20% of GBIS).

Some households will be eligible for support but may be unable to access measures due to other constraints (for example, minimum requirements for buildings), or will not be eligible but will still be struggling to pay energy bills, keep warm, or to increase the energy efficiency of their homes. It will also be important to build in alternative offers for these households, so that when they are contacted to check eligibility, they are not left without any support. This will require a sensitive approach to communication to ensure expectations are managed and avoid reputational damage to ECO, suppliers, and net zero more generally.

Ofgem must identify, and mitigate, the distributional impacts of proposals on vulnerable groups and those with protected characteristics.

While we have outlined some of the groups which may be impacted by a lack of accessible information, we do not fully understand the implications of either moving to DWP data-matching as the default method of verification to evidence HTHG and low-income group membership, or of removing benefit letters as a method of evidencing eligibility. Given that we do not know who would qualify, yet not be identified by the data-matching process (and therefore would rely on benefit letters to evidence their eligibility), there is a risk that certain groups are excluded by removing this method, which could have implications inconsistent with the Equality Act.

As such, it is crucial that Ofgem works with DWP to identify the groups that are most likely to not be identified by data-matching, even if they do indeed receive the required benefit.  This should look to uncover whether any groups are disproportionately represented within these. This will be paramount to understanding barriers to engagement. Ofgem should then look to provide recommendations on how to mitigate any negative or unfair distributional impacts arising from these proposals before Ofgem enacts any new approaches.

Data-matching to evidence receipt of benefits must be complemented by utilisation of existing data held by suppliers to identify vulnerability.

We welcome efforts to make better use of data through automated data-matching routes to maximise ECO delivery to low-income, fuel poor and vulnerable households. However, we are also conscious that there is a wealth of data possessed by suppliers on the vulnerability of their customers, which is not being used to its full potential (if at all) and yet would enable them to better identify households eligible for ECO. This data includes households on the Priority Services Register (PSR), which identifies vulnerable households in need of additional support; the amount of energy debt held by households, which tends to correlate with financial vulnerability; and whether households are on prepayment meters, which exposes them to the risk of self-disconnection if they are unable to pay upfront for energy.

Data providing information on how much energy homes have used can also be combined with EPC data to identify levels of energy efficiency within homes, and whether households are paying high bills as a result of low-efficiency homes. Overlaying this with data held by the DWP on financial vulnerability and receipt of benefits could identify not only households who are eligible, but also properties which are eligible. This could, in some cases, help to manage expectations regarding eligibility and, therefore, mitigate the risk that households are identified due to personal circumstances and yet ineligible due to property characteristics.

While this will not identify every single household eligible for support, it will make it more likely that those currently falling through gaps are caught. In particular, using this data would help to capture marginalised households who are, by definition, less likely to be identified. Furthermore, this could mitigate the risk of fraud without making households have to jump through unnecessary hoops or further complicating the customer journey.