Energy Bills Support Scheme Contingent Liability Notification

Today, I have laid a departmental minute which describes a contingent liability undertaken by the Department for Business, Energy and Industrial Strategy to support citizens of Northern Ireland with their energy costs this winter, through the energy bills support scheme and alternative fuel payment in Northern Ireland.

It is normal practice, when a Government Department proposes to undertake a contingent liability in excess of £300,000 for which there is no specific statutory authority, for the Minister concerned to present a departmental minute to Parliament giving particulars of the liability created and explaining the circumstances; and to refrain from incurring the liability until 14 parliamentary sitting days after the issue of the statement, except in cases of special urgency. A letter has been sent to the Public Accounts Committee and Business, Energy and Industrial Strategy Committee to explain the need behind this retrospective notification.

The energy bills support scheme and alternative fuel payment in Northern Ireland (EBSS AFP NI) is being delivered through the six domestic electricity suppliers operating in NI. Suppliers have indicated they will engage with the Post Office for voucher production and delivery, and for the Post Office to fulfil its role in the delivery of the scheme, a contract is required between it and each of the NI electricity suppliers.

The departmental minute sets out details of the new liability undertaken by BEIS. The liability provides post office with a letter of comfort, enabling the removal or amendment of some of the company’s standard contract terms in this instance. This has enabled the Department to progress with scheme delivery to provide much needed support with energy bills to the people of Northern Ireland.

Our assessment of the expected value of the total liability is £3.125 million, with the immediate beneficiaries being the Post Office (for which the Secretary of State is the sole shareholder) and the relevant NI electricity suppliers. If the liability is called, provision for any payment will be sought through the normal supply procedure. There is no sunset clause built into the letter of comfort, as it is tightly linked to the delivery of the specific scheme, and it is our expectation that the likelihood of the liability being called will reduce significantly following the completion of the end of scheme audit in quarter 3 of 2023-24.

HM Treasury has approved the proposal. A full departmental minute has been laid in the House of Commons providing more detail on this contingent liability.

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