Energy bills support successfully protected many people and businesses during 2022 and 2023 from rising energy prices, at a cost of £44 billion – two thirds lower than the original estimate of £139 billion - a new National Audit Office (NAO) report has found.

The UK government introduced eight different support schemes (see Notes to Editors) for households and businesses in 2022 and 2023, after COVID-19 and the outbreak of war in Ukraine caused average annual household bills to increase from £1,277 in winter 2021-22 to more than £4,000 by the start of 2023.

The final cost of the schemes was lower than the original estimate in part due to lower-than-expected wholesale energy prices and a warmer than average winter in 2022.

DESNZ reported that the schemes successfully prevented around 289,000 households in England from going into fuel poverty.

Stakeholders have highlighted other positive impacts from the schemes, such as fewer people choosing to disconnect or ration their energy use (see Notes to Editors).

However, the Department also estimated that between 2022 and 2023 - even after government support - overall around 238,000 households fell into fuel poverty.

The Government deserves credit for working quickly to introduce the schemes. But moving at speed meant the government had to accept risks to value for money, and providing universal support meant some people received financial assistance they did not need.

There was a comparatively low rate of fraud and error, which DESNZ estimates at 0.7% of energy schemes payments, worth £291.8 million of the total programme expenditure of £44bn. This was lower compared with some COVID-19 support schemes – for example, the estimated level of fraud and error for the Bounce Back Loan Scheme was 11%, worth £4.9bn

Despite distributing financial support to most households quickly, there was low take-up among harder- to-reach groups, such as people living on boats (see Notes to Editors). For those households, without a direct relationship with an electricity supplier, take-up was around one-fifth of DESNZ's provisional estimate of potentially eligible recipients. 

DESNZ is taking steps to understand what it could have done to improve take-up, while considering how a range of interventions might help mitigate the risks of a future energy crisis.

The government's understanding of commercial sector energy use was poor during implementation, which led to identical support for all businesses, despite differences in their energy consumption compared to domestic households, and capacity to engage with energy suppliers directly. DESNZ considers its understanding of the non-domestic sector has improved since implementing the schemes. 

Alongside completing its own evaluation of the energy support schemes, DESNZ is considering the inflationary impacts of the schemes. 

DESNZ is also considering future interventions if prices were to rise again, such as data matching which might help identify low‑income households to help target future financial support, but these are at an early stage.  

The government is taking action to reduce energy bills, ranging from developing renewable energy markets to improving the energy efficiency of homes and reducing emissions from buildings, but these interventions will take years to have an effect.