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Islington Council to tackle fuel poverty by launching energy partnership

Islington Council is set to launch its own energy brand, offering affordable gas and electricity tariffs to help lift the poorest residents out of fuel poverty and many more cope with the rising cost of living.

The new brand – a first in London and a partnership with OVO Energy – would offer thousands of residents the opportunity to change supplier and save hundreds of pounds, benefitting from value-for-money gas and electricity tariffs.

Most importantly, it will help thousands of residents whose fuel bills are a major factor in keeping them trapped in fuel poverty – a key priority for the council.

At least 20,000 households using pre-payment meters – or one in five households in Islington – will be able to switch and get access to new smart meters, which let them move on to much cheaper tariffs.

The number of pre-payment customers in Islington is rising year-on-year, and up to half of all residents on housing estates use them.

Data suggests pre-pay users are more likely to be in debt – and have bigger debts – than those using other payment methods.

Last year the average pre-pay user in Islington paid £177 more on their gas and electricity bills than a customer paying by Direct Debit, with a difference of £432 between the most costly pre-pay tariff and cheapest Direct Debit tariff.

The proposed energy partnership is set to be agreed by Islington Council’s Executive next Thursday (10 March).

Cllr Claudia Webbe, executive member for environment and transport, said: “In recent years we have seen fuel bills rocket and households faced with ever-greater stresses on their finances.

“Tackling the cost-of-living crisis in Islington – particularly the scourge of pre-payment meters, which residents seem to be increasingly forced to rely on – is more pressing than ever and a top priority for us.

“We do not want anyone to be faced with deciding whether to heat or eat, and want significant numbers of residents to benefit from cheaper energy now.

“Joining forces with an energy company is an innovative new way to help improve the lives of all residents.”

Domestic energy bills have risen significantly over the past decade. Since 2006, average dual fuel bills have risen from £760 to £1,320 in 2013, despite average consumption actually falling.

The proposed scheme will operate at no cost to the council, and each household switching to one of Islington’s competitive tariffs will save an average of £200 per year on their bills. In the first year Islington residents could shave £600,000 off their bills in total.

Encouraging elderly and vulnerable residents to switch to an Islington-branded energy supply should also reduce cases of people avoiding heating their homes because of the cost.

For more information contact:

Stephen Moore
Senior Media Officer
020 7527 3224
Stephen.Moore2@islington.gov.uk

Notes to editors

Notes to editor

+ Pre-payment meters are more expensive and often much less convenient than other payment methods. Moving to a new tariff and smart meter makes payments easier and can decrease costs. For more information, see www.energyadvice.islington.gov.uk/prepayment.

+ OVO will cover Islington’s set-up, marketing and operational costs for the length of the proposed three-year partnership.

+ Islington Council will manage the scheme, with both partners marketing the scheme and tariffs to residents. OVO will also provide all customer-facing services and supply the energy.

+ In the first year the council will concentrate on encouraging Islington residents to switch tariffs, but could in future look to recruit more customers across London and further afield.

+ Islington Council will work to sign up approximately 3,000 customers in its first year of operation. With an average saving of £200 per household, this will lead to a financial benefit of at least £600,000 being realised in the first year by residents who switch supplier to take advantage of the competitive energy tariffs.

+ The council will agree a brand name for the partnership and finalise the contract in due course.

+ The council approached several energy providers, selecting OVO based on its performance and its offer for residents compared to the ‘big six’ energy companies. This includes offering the Warm Home Discount, its award-winning customer service, experience of delivering this service with other local authorities, and its ‘priority service’ register for vulnerable residents. It also installs smart meters for pre-payment customers and produces some of its energy from renewable sources.

+ OVO has won many awards, including uSwitch Supplier of the Year for 2014 and 2015 and coming 1st in 11 out of the 12 categories (www.uswitch.com/gas-electricity/campaigns/uswitch-energy-awards-2015) and recently became the only Which? Recommended Provider for energy.