diff --git a/changelog.d/2767.changed.md b/changelog.d/2767.changed.md new file mode 100644 index 0000000000..31a3989d03 --- /dev/null +++ b/changelog.d/2767.changed.md @@ -0,0 +1 @@ +Document why the model leaves out Great Britain's £200 Alternative Fuel Payment. diff --git a/docs/book/programs/gov/treasury/cost-of-living-payments.md b/docs/book/programs/gov/treasury/cost-of-living-payments.md index 6b20bafc34..91747e3729 100644 --- a/docs/book/programs/gov/treasury/cost-of-living-payments.md +++ b/docs/book/programs/gov/treasury/cost-of-living-payments.md @@ -30,9 +30,9 @@ spike in domestic energy prices. Two strands: package. Northern Ireland paid £600 in one go from January 2023: £400 of support and a £200 Alternative Fuel Payment, to each domestic electricity customer on 2 January 2023, whatever fuel the household heats with (EBSS - AFP NI Direction, 23 December 2022, paragraph 3 and footnote 1). Great - Britain's £200 Alternative Fuel Payment, for households that heat with - heating oil, LPG, biomass and other alternative fuels, is not modelled. + AFP NI Direction, 23 December 2022, paragraph 3 and footnote 1). The model + leaves out Great Britain's £200 Alternative Fuel Payment, which suppliers + paid on electricity meters the government listed in areas off the gas grid. PolicyEngine models these via: @@ -78,6 +78,33 @@ calendar year in the same way; it counts in household net income and government spending but not in HBAI income. The model keeps one timing for both schemes for now. +### Great Britain's Alternative Fuel Payment + +Electricity suppliers in Great Britain paid £200 to 1,842,760 customers, +£368.6 million in all ([DESNZ supplier data](https://www.gov.uk/government/publications/alternative-fuel-payment-gb-payments-made-by-electricity-suppliers-to-customers)), +and local authorities paid 89,750 more through the Alternative Fund +([DESNZ applications data](https://www.gov.uk/government/publications/energy-bills-support-scheme-alternative-fund-gb-ni-and-alternative-fuel-payment-alternative-fund-applications-made-by-customers)). +The model leaves out both, so it understates 2023 income and government +spending by about £387 million. The omission affects 2023 alone. + +Suppliers paid whoever held the account, at the start of 1 February 2023, for +each electricity meter the Secretary of State named ([direction](https://assets.publishing.service.gov.uk/media/63ceba6fe90e071bac7eadce/alternative-fuels-payment-gb-ministerial-direction.pdf), +paragraph 6). The department built that list from postcodes not connected to +the gas grid and removed areas with high use of electric heating +([interim evaluation](https://www.gov.uk/government/publications/domestic-energy-affordability-support-schemes-in-great-britain-interim-evaluation), +page 54). + +Spending on liquid and solid fuels does not pick out the households on that +list. In the Living Costs and Food Survey, about a third of Great Britain +households buying these fuels have gas central heating, and more than a third +of households with oil, solid fuel, calor gas or other gas central heating +report no purchase. The enhanced FRS 2023-24 carries neither +`liquid_fuel_consumption` nor +`solid_fuel_consumption`. PolicyEngine's Microcosm dataset carries both from +2024, and its 842,000 Great Britain households with spending on either fall 54% +short of DESNZ's count. None of the model's datasets with a 2023 year records a +household's heating fuel or gas connection. + ## Household Energy Payment (2026-27) Budget 2026 (paragraph 6.24) announced a one-off £100 Household Energy diff --git a/policyengine_uk/variables/gov/treasury/energy_bills_rebate/monthly_ebr_alternative_fuel_payment.py b/policyengine_uk/variables/gov/treasury/energy_bills_rebate/monthly_ebr_alternative_fuel_payment.py index 8ec5791536..9a07704fc4 100644 --- a/policyengine_uk/variables/gov/treasury/energy_bills_rebate/monthly_ebr_alternative_fuel_payment.py +++ b/policyengine_uk/variables/gov/treasury/energy_bills_rebate/monthly_ebr_alternative_fuel_payment.py @@ -7,9 +7,9 @@ class monthly_ebr_alternative_fuel_payment(Variable): "Northern Ireland's £200 Alternative Fuel Payment for the month. " "Electricity suppliers paid it with the £400 Energy Bills Support " "Scheme amount, as one £600 payment to each eligible domestic " - "customer, whatever fuel the household heats with. Great Britain's " - "Alternative Fuel Payment, for households that heat with heating oil, " - "LPG, biomass and other alternative fuels, is not modelled." + "customer, whatever fuel the household heats with. The model leaves " + "out Great Britain's Alternative Fuel Payment, which suppliers paid on " + "electricity meters the government listed in areas off the gas grid." ) entity = Household definition_period = MONTH