Document why the model leaves out Great Britain's Alternative Fuel Payment

changelog.d/2767.changed.md

@@ -0,0 +1 @@
+Document why the model leaves out Great Britain's £200 Alternative Fuel Payment.

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

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