Students on all-inclusive bills will get £400. As long as they’re not actually all-inclusive

Just when you thought that students were going to get a bit of financial help, it turns out that they probably won’t.

Jim is an Associate Editor at Wonkhe

As you’ll recall, the Energy Bills Support Scheme provides a £400 non-repayable discount to “all” households to help with their energy bills over winter 2022 to 2023.

I say “all” because while “normal” domestic households are getting help, and those in other types of settings will be getting £400 through another scheme (residents of care homes, housing association tenants, park home people, house boaters, travellers and those off the grid), it looks like BEIS plain forgot students in halls and in houses on non-domestic supply.

The latest from the BEIS press office? No answer on why students are missing from the Energy Prices Act impact assessment, just an ominous:

We are working to finalise the details of the Energy Bills Support Scheme Alternative Funding.”

Still. The good news is that students in HMOs on a domestic energy supply will still get it. After all, the government has been telling anyone that will listen for months now that it was intending to legislate to force landlords to pass the £400 rebate on to tenants with all-inclusive bills.

It has even dropped the £400 into written answers on student finance questions to DfE ministers.

But alas it might not actually be the case.

The Energy Prices Act 2022 provides for regulations requiring third-party intermediaries, such as landlords, to pass support through to end users, such as tenants. Those regs have been approved, and there’s official guidance out on those regs from BEIS.

The regulations say this:

If and to the extent that the relevant intermediary does not pass through the whole of the scheme benefit provided to it in a period to its end users, it is for the relevant intermediary to demonstrate to end users that the pass-through it has effected in respect of the period concerned is just and reasonable, and in so doing it is entitled to take into account the extent to which its charges to end users reflect the increased cost of energy as a result of the energy crisis.”

So if you have a tenancy agreement that says “if you spend more than £X a month on energy the landlord will charge you for anything you use above that”, the impact of the price cap should have come through in bills, and the £400 coming via the energy supplier has to be passed on.

But agreements like that aren’t really “all-inclusive”, are they? If anything, they’re the opposite.

So what about tenancies where the bills really are all-inclusive?

Remember, the landlord is entitled to take into account the extent to which its charges to end users reflect the increased cost of energy as a result of the energy crisis. And on a tenancy like that, it is unable to levy additional charges at all.

Indeed the guidance says:

If the intermediary has shielded its end users from the impact of increased energy prices it may be just and reasonable for it to retain some or all of the scheme benefit.”

Now the landlord will say…

Well prices have shot up since I signed, I’ve not been able to pass on the price increases, so I’m keeping the benefit”.

But the tenant might say…

It was obvious prices would go up, you took that into account when you set my all-inclusive rent – so the £400 and any relief on bills is to go to me, because I’m supposed to get the discount.”

Maybe you could argue that the legislation directs the landlord to work out how much the cost of energy was on the day they signed the contract to work out how much they’re paying now. But surely many landlords anticipated it going up when they set the rent. So how do you work out what is “just and reasonable”? And what if the bill is split between tenants who signed on the line at different times?

You’d have thought that the tenant should be able to say “you include bills regardless of the amount you pay in my rent. You’ve been given £xx for help paying those bills. I’m paying, in my rent. Give me the benefit.” But apparently not.

In other words when the regulations say “the extent to which its charges to end users reflect the increased cost of energy as a result of the energy crisis”, we need to know when “increased” applies from, and whether we’re looking at what was being charged at that point, what had been announced by then for the next energy price cap date, or what was merely anticipated by the landlord (or reasonable to have expected the landlord to anticipate) by then.

And naturally the legislation is framed so that the landlord decides and then a tenant can challenge them, which would depend on the tenant having absolute clarity on what they were entitled to, wouldn’t it.

The guidance offers no clarity, of course, and the BEIS press office hasn’t offered me any either (despite repeated attempts to obtain it). The legislation then allows a student to go to court – but as nobody in government can clarify what the hundreds of thousands of students in this situation would base their claim on, I can’t see it, somehow. Can you?

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