The Newington Estate, Kennington, is part of a communal heating network.

People were sent into a panic when the National Housing Federation warned that the energy price cap appeared to exclude households on heating networks.

But the 17,000 Southwark properties served by 100 heat networks across the borough should be protected after the government hinted at a “discretionary fund”. 

In a factsheet published on September 8, the Department for Business, Energy and Industrial Strategy said: “Those households not on standard gas or electricity contracts, such as those living in park homes or on heat networks – and so outside the scheme – will be no worse off and will receive comparable support through a discretionary fund.” 

Chancellor Kwasi Kwarteng is set to announce an emergency mini-budget on Friday, September 23, which could contain the details of the fund.

Emel, whose sister Kezi is disabled and lives on the Newington Estate, just one estate heated by a communal network, needs affordable electricity more than most.

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Emel said: “She’s got no choice but to use electricity for things like mobile hoists, her bath chair and electric chairs. These things are essential.

“My family are all working people and would never leave her without electricity but somebody who lives on their own and only relies on universal credit – they’re the ones who really need the help.” 

There have been fears that people like Kezi will be excluded because heating networks, unlike other households’ heating, are not currently regulated by Ofgem.

Associations that run heating networks negotiate their contracts on the open market so are not protected by the price cap. 

The National Housing Federation has warned that district heating households “face a potential bill increase of £68 per week, £1,130 per year, over October’s energy price cap”. 

Alex Dique, a resident of Montague House, Peckham, also served by district heating, said: “It worries me for people who are struggling to pay the bills as it is. Anything that pushes these costs up will push them out of the neighbourhood which is what you’re seeing a lot in Peckham and south London.”

If the ‘discretionary fund’ is to truly ensure district-heated households are no worse off, it will also have to match the £400 Energy Bills Support Scheme which other households are getting.

Energy prices were initially set to hit £3,459 for the average household annually. But the Energy Price Guarantee and the Energy Bills Support Scheme (EBSS) mean costs for gas and electricity combined will stop at an average of £2,500 per household per year. 

Councillor Stephanie Cryan, cabinet member for finance, democracy and digital, said: “We have a huge amount of sympathy for anyone struggling with their bills and we know that many people are worried about the energy crisis. 

“We have put together a comprehensive strategy to tackle the cost of living crisis, which includes a £5m fund to support our most vulnerable residents – about 30,000 low-income households will receive £120 in extra support this year. This is on top of £150 Council Tax rebate paid to more than 100,000 Southwark residents this year. Further support will be announced in October.”

The Department for Business, Energy and Industrial Strategy has been approached for comment.

For more details on the energy price cap, visit: https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

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