Demonstrating Warm Home Discount Scheme Compliance

What is Warm Home Discount? 

The Warm Home Discount (WHD) Scheme places a legal obligation on Energy Suppliers to deliver support to persons on low-income and who are vulnerable to cold-related illness or living wholly or mainly in fuel poverty. Eligibility and spending requirements are calculated proportionately to domestic market share. 

The WHD scheme has evolved over time since its implementation in 2011. From Scheme Year 12 (2022), separate guidance came into effect for Scotland, which is different to England and Wales. The scheme in Scotland varies due to the way eligible consumers/ homes are identified. Further changes took place from Scheme Year 13 (2023), seeing the threshold for mandatory participation reducing from 50,000 to 1,000 domestic customers, with the reduction ensuring more customers can benefit from scheme spending. 

There are three components to WHD. In England and Wales, these are referred to as:

  • Core Group 1, for those in receipt of the Guarantee Credit portion of Pension Credit,
  • Core Group 2, for low-income customers with high energy bills,
  • Industry Initiatives, which consist of a wider range of support, including energy efficiency advice, measures and energy debt write-offs.

These vary slightly for Scotland:

  • Core Group, for less well-off pensioners,
  • Broader Group, for certain low-income households, 
  • Industry Initiatives. For the Core and Broader groups, all eligible customers are given a £150 discount on their electricity or gas bill. 

Demonstrating Compliance 

Scheme participants must provide annual data notifications and spending reports to Ofgem, for spending obligations to be calculated. These reports set out intended approaches to meeting the scheme requirements and subsequently progression against these plans. 

End-of-year reports for Scheme Year 13 must be provided to Ofgem by 26th May 2024, with results to be independently checked to be accurate and compliant with scheme regulations. Annual report submissions must be accompanied by separate audit reports outlining the assurance steps taken and outcomes. 

Ofgem also maintains its own audit programme that could cover any element of the scheme. These are likely to target new scheme activities, a newly obligated supplier or where earlier audits have identified recommendations. 

How can we help? 

We combine our deep industry experience with auditing accreditation to offer a comprehensive assurance service for annual WHD reporting. Several of our consultants have ISO:9001 Lead Auditor qualification and have carried out multiple WHD scheme audits to this standard. 

Our tried and tested auditing approach delivers the reporting assurance required to demonstrate scheme compliance, while our sector understanding allows us to see the wider picture to be able to highlight potential process efficiency improvements. 

If you would like to find out more about our WHD services, it’d be great to hear from you – Please contact Tom DesmondClaire Gwyer or James Hill

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