The UK Government confirmed earlier this week that the scheme would be capped.
Scotland’s national membership organisation has said that a cut to energy bill support announced by the UK Government could have “disastrous consequences” for the voluntary sector.
Last year ministers unveiled plans for a package of support for non-domestic users - including charities and other voluntary groups - worth £18billion to see them through this winter.
The Energy Bill Relief Scheme currently runs until the end of March, and is now set to be replaced by the Energy Bill Discount Scheme (EBDS) from April 1.
Like the previous scheme, the EBDS will also automatically discount charities’ energy bills until the end of March 2024.
The new scheme will provide significantly lower amounts of support, with the EBDS capped at £5.4bn over the year of its operation, compared to the relief scheme’s estimated £18.4bn cost over the six months to March 2023.
The EBDS will be subject to a wholesale price threshold, set with reference to the support provided for domestic consumers, of £107/MWh for gas and £302/MWh for electricity.
This means that charities experiencing energy costs below this level will not receive support.
Chancellor Jeremy Hunt said: “My top priority is tackling the rising cost of living – something that both families and businesses are struggling with. That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.”
A number of groups have already expressed fears about the effect this could have on groups’ finances, as bills continue to rise unsustainably.
The Scottish Council for Voluntary Organisations, SCVO, has now called for long-term solutions to avert a catastrophe for the voluntary sector in Scotland.
SCVO chief executive, Anna Fowlie, said: “While we are pleased that the Energy Bill Discount Scheme will continue to support charities at the same level as businesses, we are disappointed that the level of support will fall, and worried about the implications for Scotland’s voluntary sector.
“An overall reduction in support from £18.4billion over six months to £5.4bn over 12 months, combined with a tightening of eligibility criteria, could have disastrous consequences.
“We know that voluntary organisations across the country are under huge pressures due to rising costs, and that the difficulties of sourcing income to meet these rises can lead to concerns about ongoing viability, regardless of the size of the organisation or the levels of energy use.
“We must therefore find solutions that are accessible across the sector.
“We are calling on Scottish Government to reopen their Electricity and Natural Gas framework agreements to voluntary organisations, providing access to more reasonable prices through bulk purchase of energy.
“Together with our partners in NCVO, we are also calling on the UK government to recognise the particular challenges faced by high-energy use voluntary organisations such as hospices, refuges, social care and community leisure providers, and for government to work together with the sector on long term solutions to the energy crisis.”
