The Treasury has published the terms of reference for its review of the Energy Bill Relief Scheme (EBRS) – the energy cost support package for businesses. The scheme was initially put in place for six months, with a commitment to review future support beyond 31 March 2023.
The government says that while it recognises some businesses may continue to require support beyond that point, the overall scale of support the government can offer will be significantly lower, and “targeted at those most affected”. Businesses that are highly exposed to energy prices and unable to pass through or absorb these costs sufficiently, are likely to continue to receive support.
It also wants to ensure any support provided is consistent with business being incentivised to increase the efficiency of their energy consumption.
Review terms of reference
The work of the review is focused on the following areas:
- The effectiveness of the scheme in supporting vulnerable non-domestic customers
- Which groups of non-domestic customers (by sector, size, geography or other factors) remain particularly vulnerable to energy price rises, considering the latest price position and forward curves, alongside other cost pressures
- What barriers exist to these businesses absorbing increased energy costs or passing them through, and their ability to take steps to adjust to higher prices
- An assessment of wider factors, including the economic and public policy rationale for any support
- The most appropriate mechanism to support these customers – whether extending the existing scheme for some users, or replacing it with a different scheme
To achieve this, the review will consider:
- Prevailing economic conditions and the anticipated costs of support
- Evidence from businesses, suppliers, and market experts, which is being collated by the Department for Business, Energy, and Industrial Strategy
- Wider international evidence and lessons learned from interventions being made in neighbouring countries
Public sector organisations will not be eligible for support through the review. The government says the review will however consider private sector firms which are providers of public services.
Decisions on continuing support for businesses will be announced by 31 December 2022.