Switch hit for energy bills

Northern councils are spearheading a scheme to secure lower energy prices for their residents.

All 10 Greater Manchester councils together with Calderdale and St Helens will next week invite nationwide energy companies to bid for the business of people who have signed up for the scheme to collectively switch providers.

The price of electricity and gas has soared recently, leaving thousands more families in fuel poverty.

Government ministers have encouraged people to switch providers to secure lower bills, but all energy companies have put up their prices and their complex tariffs make it hard for non-experts to work out what the best deal might be.

Local authorities taking part in the scheme – pioneered by Oldham Council last year – believe they can turn the tables on energy companies, persuading them to offer lower prices by bringing them a high volume of business.

Savings

A reverse auction takes place on 29 January.

“There are more than 200,000 households in Manchester who are in fuel poverty,” said Manchester Council leader Sir Richard Leese. “This switching scheme will make a huge difference to the lives of residents by enabling them to knock hundreds off their household bills.”

The idea was developed in Belgium by iChoosr, which boasts over 300,000 users across Europe switching suppliers.

In Oldham more than 8,500 people signed up to receive an offer from the winning bidders, with those who accepted saving an average of £171.

Fifty-six-year-old Paul Lambert of Oldham, who saved more than £470, said: “The more people sign up for this the better, because this means these big energy companies aren’t getting their own way. There’s always better bargaining power in numbers, with people doing it as a collective.

“You can opt out of it if you don’t feel secure with the offer.”

Another family saved more than £700 in the switch.

“We’re really proud that it was a success and that other councils want to follow our lead,” said Oldham Council cabinet member Arooj Shah. “We’ve had contact from over 40 other councils from across the country who want to run similar schemes over the next few months.”

Ovo Energy won the dual fuel and electricity-only online billing bids in Oldham, while Co-operative Energy took the contract for customers using paper billing.

Rationing heat

However, no bid was offered for those customers using pre-payment methods to heat their homes, because only 308 meter-using residents had registered.

Shah said she was hopeful of those users getting an offer this time round but promised: “We’re looking at other ways to help those on pre-payment meters – particularly to help them move to cheaper payment plans, so watch this space.”

All those who signed up to receive an offer in Oldham last year will have to re-register their details in order to remain eligible.

A recent survey by the Energy Bill Revolution Campaign has shown that one in four mothers feel they have to choose between feeding their children or heating their homes, and that eight out of 10 families are already rationing heat usage.

Colder homes

A poll by parenting website Netmums found that one in five believe their children are ill more often as a result of living in colder homes.

Fuel bills for some elderly people have doubled since 2005, according to Saga, the over-fifties company.

Ian Stewart, Salford mayor, said. “I would encourage every resident of Salford to seriously consider joining this scheme.

“There is the potential for each household to reduce their energy bills by up to £250 a year. That’s a really important saving for most families in this city.”

A similar iChoosr scheme led by Northumberland County Council and including Blackpool Council, Cheshire West and Chester Council, and Hull City Council, will also hold its reverse auction next week.