An investigation of the additional needs and associated financial costs of disability from the perspective of disabled people themselves. While it has long been acknowledged that disabled people face additional costs to meet their needs, there has been no clear evidence of the true extent of these.
In this study, the research used a rigorous consensual standard methodology to develop budgets based on needs. The authors review disabled people's incomes, employment, benefits and other services in order to provide a context for the budget standards.
Using five case studies of disabled people of working age with physical or sensory impairments and a range of levels of need, they then draw up and explain the detail of their budget standards. They conclude with an overview of these standards, and discuss the implications of their findings. The analysis identifies a wide range of additional costs, and finds that benefits fall significantly short of the budgets required by disabled people to ensure an acceptable, equitable quality of life.
Summary
Download as PDF, 4 pages, 0.07 MB
It is well known that disabled people face additional costs to enable them to meet their needs. However, there has been no clear evidence about the true extent of these costs. This research, conducted by the Centre for Research in Social Policy with the support of Disability Alliance, presents budget standards for groups of disabled people who have different needs arising from physical or sensory impairments. The budget standards represent the amounts disabled people (of working age) require in order to cover the costs of an acceptable and equitable quality of life. They were developed by disabled people themselves, through a series of rigorously conducted focus groups. The budgets were not based on 'wish lists'. Rather, they represent the minimum essential resources necessary to meet disabled people's needs, to enable them to achieve, as far as possible, a 'level playing field' with non-disabled people. They were arrived at through debate and negotiation within the focus groups. The research found that:
- Disabled people experience additional costs in most areas of everyday life, from major expenditure on equipment essential for independence, to ongoing higher expenses for, for example, food, clothing, utilities and recreation.
- The weekly budget standards required for disabled people are as follows:
- £1,513 for a person with high-medium mobility and personal support needs;
- £448 for a person with intermittent or fluctuating needs (i.e. from relatively negligible needs to higher needs);
- £389 for a person with low-medium needs;
- £1,336 for a person with needs arising from hearing impairment;
- £632 for a person with needs arising from visual impairment.
- Deaf people face particularly high costs due to their need for interpreter/communicator services.
- The weekly income of disabled people who are solely dependent on benefits is approximately £200 below the amount required for them to ensure an acceptable, equitable quality of life.
- Unmet weekly costs for disabled people who work 20 hours per week at the minimum wage are up to £189 (for those with high-medium needs).
Background
Disabled people have a disproportionate risk of being poor, i.e. of having an income below 60 per cent of the national median average. Department for Work and Pensions statistics for 2002-03 showed that 29 per cent of households with disabled people were poor, compared with 17 per cent of households without disabled people. However, these statistics underestimate the true extent of poverty among disabled people because they are based solely on income (including disability benefits), and do not take into account the additional costs disabled people may incur because of their disabilities.
Lack of information about disabled people's living costs mean that levels of nationally provided financial benefits and local services are determined using limited evidence. Certain state benefits are meant to offset, at least partially, the additional costs associated with disability, but the extent to which these benefits meet additional needs and costs is unknown.
The purpose of this study was to investigate the additional needs and associated financial costs of disability from the perspective of disabled people themselves. Rather than focusing on what disabled people spend, the research investigated what disabled people need in order to be on a 'level playing field' with non-disabled people. Participants were allocated to different groups, based on the type and degree of their disability, and they prepared in advance for group meetings. This ensured that the full extent of additional costs was explored.
The disabled person budget standards
The budget standards developed in the study are based on one disabled person living alone in suitably adapted, rented accommodation. They do not include prescription charges or any income, benefits, services or items provided by health, social or other services.
Most of the participant groups reported additional costs in most areas of expenditure examined, i.e. food, clothing, household maintenance, fuel and power, household goods and services, transport, communications, recreation/culture, education, health, personal care, insurance and special occasions. Those with the highest needs had the highest costs in all areas except:
- transport - costs were highest for those with intermittent needs;
- communications and recreation/culture - costs were highest for deaf people.
Personal assistance costs
The biggest single cost for all groups was for personal assistance (see Figure 1). 'Personal assistance' was defined broadly to include interpreters for deaf people, trainers for visually impaired people, and personal care and other domiciliary services. Across all groups, the greatest need was for human assistance, rather than for adaptations and equipment.
The groups stated that someone with high-medium needs would require constant personal assistance, including sleep-in cover. On top of wages for personal assistants (PAs), participants identified a number of additional indirect costs, including:
- PAs' costs when participating in activities;
- employers' liability insurance;
- laundering PAs' bed linen after sleep-in duties.
Consensus among the groups of deaf people was that for profoundly deaf people to have access to public, recreational and commercial services equal to those of hearing people, they would require extensive 'on demand' interpreter/communicator services. Current interpreter/communicator services are not designed to provide this level of assistance, which explains the very high costs in this area.
The groups of visually impaired people explained that specialist training was essential to support and enhance independence, but that current levels of training provision were inadequate. The groups therefore decided that the budget standard should allow sufficient resources to enable individuals to 'buy in' training as required, even if this had to be on a one-to-one (and thus not the most cost-effective) basis.
Benefits and the budget standards
The disabled person budget standard totals can be compared with maximum benefit levels, made up of Disability Living Allowance (DLA), Income Support and Incapacity Benefit, and taking into account Housing and Council Tax Benefits (see Table 1). To compensate (approximately) for the value of current social provision, these figures do not include PA costs.
Maximum benefit levels reflect disabled people's needs insofar as people with higher needs are eligible for higher benefit payments. The study finding that deaf people and people with visual impairments incur similar costs is reflected in the similar benefit levels payable to both these groups of people.
However, even if receiving maximum benefits, disabled people still experience a substantial shortfall in income. The income of disabled people solely dependent on benefits, irrespective of the type or level of their need, is approximately £200 less than the weekly amount required for them to ensure a minimum standard of living. These figures suggest that, even without including PA costs, benefits meet only:
- 28 per cent of the costs of people with low-medium needs;
- 30 per cent of the costs of people with intermittent/fluctuating needs;
- 35 per cent of the costs of deaf people and people with visual impairments;
- 50 per cent of the costs of people with high-medium support needs.
This shortfall in income would need to be addressed through a combination of environmental improvements, enhanced service provision, improved benefits and/or wages from employment.
Paid work and the budget standards
The highest and lowest disabled person budget standards were compared with the wage of someone working 20 hours per week at the minimum wage, taking into account Working Tax Credit, Housing Benefit, Council Tax Benefit and DLA as appropriate. For disabled people on this minimum wage, unmet costs remain very high. Even if PA costs are excluded and it is assumed that full Housing and Council Tax Benefits are received, unmet costs would be between £118 and £189 per week (see Table 2).
To show how these figures vary according to the range of disabled people's work situations, the highest and lowest disabled person budget standards totals are also compared with the national average full-time wage, plus DLA where appropriate (see Table 3).
People with low-medium needs need to receive the national average wage before their costs would be covered (and then only if there were no PA costs). However, for people with high-medium needs, an income consisting of the average wage and DLA would still not meet their needs. Even excluding PA costs, a person with high-medium needs in full-time work would face unmet costs of over £80 per week.
About the project
The study used needs-based consensual budget standard methodology. A total of 78 disabled people completed questionnaires and participated in a series of focus groups and workshops. Participants were recruited on the basis of their self-defined needs. Groups with common needs constructed budget standards for people in their circumstances (i.e. groups of participants with high-medium needs developed the budget standard for a person with high-medium needs, and so forth). All decisions about what should be included in the budget standards were made by group members through a process of informed discussion, negotiation and 'check-back' groups. The fieldwork for the study took place in Derby, Birmingham and Nottingham in 2003-04.
http://www.jrf.org.uk/publications/disabled-peoples-costs-living
PDF version 
An additional £125 million in 2009/10 and £145 million in 2010/11 has been allocated to the Social Fund in the 2009 budget.
The Social Fund provides interest free loans to allow people to meet and spread the payment of unexpected costs.
Funding guides
A Guide to Grants for Individuals in Need
From the Directory of Social Change, 24 Stephenson Way, London NW1 2DP, tel: 08450 77 77 07.
Lists charities that help individuals and have more than £500 to give away. There are separate sections on regional charities and those connected to specific occupations, illnesses or disabilities. Published every two years. Current edition: 10th edition 2006.
The Educational Grants Directory
From the Directory of Social Change, 24 Stephenson Way, London NW1 2DP, tel: 08450 77 77 07.
A comprehensive listing of national and local charities which give to individuals for education. Published every two years. Current edition: 9th edition 2006.
A Guide to Financial Help Towards the Cost of a Holiday or Respite Break
Published by Tourism for All at £3.50. This 30 page publication includes details of trusts for specific disabilities, occupations, ages and regions. To order email info@tourismforall.org.uk or call 0845 124 9973.
Regional Guides
The North East Guide to Grants for Individuals
From Funding Information North East, John Haswell House, 8-9 Gladstone Terrace, Gateshead NE8 4DY, tel. 0191 477 1253.
Details of charitable trusts making grants to indiviuals in County Durham, Teeside, Northumberland and Tyne and Wear, both to relieve need and for educational purposes. Current edition: 2008/2009.
Web-based resources
There is a vast amount of information available on websites about funding, support and advice for both individuals in need and for those seeking help with funding for education, particularly higher education.
Many individual universities have their own lists on their websites. If you are looking for funding for education it is always worth starting with your prospective college or university website.
See Other useful sites – Individuals for a wide range of web based resources for individuals.
http://www.funderfinder.org.uk/personalsupport.php
This website links to search charities online and disability online resources
The cost of living for those living on minimum household budgets is rising faster than inflation, the Joseph Rowntree Foundation has calculated.
It says that the costs for a single household on its low-income budget were up 5.3% this year, with rises of 5% for pensioners and couples with children.
The reason is that the poor spend more on fuel, food, and public transport, which have risen by 7% to 12%.
Benefits for working age people are well below minimum income standards.
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 The mood is not so much one of austerity, but of prudence  Joseph Rowntree Foundation
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However, the report says that pensioners who get the full amount of pensioner credit do receive enough to meet the minimum income standard.
The think tank had created the benchmark measure last year in order to determine the income people need "to reach a minimum socially acceptable standard of living" which includes "having what you need to in order to have the opportunities and choice necessary to participate in society".
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MINIMUM WEEKLY INCOME STANDARDS 2009
Single person: £166.47
Pensioner couple: £211.30
Couple with 2 children: £388.51
Lone parent with one child: £220.88
source: Joseph Rowntree Trust (excludes housing costs and childcare)
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It is based on detailed survey evidence from the public about which items of expenditure are essentials.
Rowntree says that its preliminary findings suggest that despite the recession, the public "continue to believe that a minimum standard of living should allow people in Britain not just to survive, but to play a full part in society".
However, it points out that in tough economic times a growing number of people are concerned about whether they have enough income to meet the minimum acceptable standard of living.
And it warns that some people losing their jobs will have to survive on less than half of that minimum standard of living.
According to the report, a single person of working age would only receive benefits worth 42% of the minimum income needed, while a lone parent with one child would only receive 67% of the minimum.
And it says that the national minimum wage would have to rise by £1 in order for it to provide enough money for to raise a single-earner household out of relative poverty.
Poverty line
The report is an attempt to raise the debate about the level of relative poverty in Britain beyond the government's official poverty line of 60% of average earnings - and as the government prepares to legislate to make legally binding its target of cutting child poverty in half by 2020.
It points out that on this relative measure, poverty is likely to have decreased or stabilised this year, simply because during the recession average earnings have stopped growing while benefits went up by 5% in April 2009 in line with the September 2008 inflation figure.
It says that "this apparently beneficial effect on the poverty figures does not represent a real improvement in the living standards of people on low incomes" because their cost of living is going up faster than for the average family.
And it warns their standard of living could fall if the inflation rate for those on minimum incomes continues to outstrip the general inflation rate.
Rowntree found that people in its focus groups continued to believe that everyone should have access to items that met key social needs, but there was a scaling down of how much should be spent to achieve these needs.
People thought some needs could be met through a more modest level of consumption, for example by shopping at discount supermarkets, or going out less frequently for meals or entertainment.
"The mood was not so much one of austerity, but of prudence," it said.
Sharp rises in food prices have pushed up the minimum cost of living twice as fast as the rate of inflation over the past year, a report from the Joseph Rowntree foundation reveals.
The charity, which introduced the concept of a minimum income standard in 2008, says it is now harder to live on a low income than it was last year. Its minimum income standard calculates the earnings needed to afford a socially acceptable standard of living in the UK.
The foundation says that a single adult with no children now needs to earn at least £13,900 a year before tax to reach the minimum standard. This is a £500 rise from 2008 and nearly half of this extra income is needed for food. A couple with two children are estimated to need a combined gross income of £27,600 annually.
The minimum cost of living has risen by 5%, contrasting with official inflation figures in April of 2.3% for the consumer price index and -1.2% for the retail prices index. The RPI includes mortgage costs, which have fallen sharply after sharp cuts in interest rates, while the CPI does not.
"A low-paid worker whose earnings were linked to the RPI could be 6% worse off this year, relative to the minimum cost of living," says the report.
Official data shows food prices are up about 9% from last year in April while mortgage costs fell 47%, dragging the RPI down very sharply.
An online calculator is available for people to check whether their income meets the minimum standard for Britain at www.minimumincome.org.uk.
http://www.guardian.co.uk/money/2009/jul/01/wage-rowntree-minimum-cost-l...
I wrote to the Independant Living Fund and asked How many people with HIV/AIDS accessed the fund?. I was advised that this data would only show those listed as a HIV/AIDS as a primary conditions and today I received thier repsonse.
The number of people supported by the Independant Living Fund dated in the March 2009 report was 21,534 people. http://www.ilf.org.uk/reports/statistics/index.html
We know and estimate that 64,000 people live with in the UK, we know about 7310 +/- access Disbaility Living Allowance from the Dept. of Works and Pensions and now 3 access the ILF fund for (2008/2009).
http://www.ilf.org.uk/index.html
To be eligble to access the ILF this requires:
Eligibility - who can apply?
To qualify for ILF, you must:
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get at least £320 worth of support a week or £16,640 a year from social services. This support could be something like going to a day-centre or getting money from a direct payment scheme;
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get the higher rate care component of Disability Living Allowance (DLA);
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be at least 16 and under 65. You must apply before your 65th birthday. The funding can continue after your 65th birthday as long as you still meet all the other conditions;
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be living in the United Kingdom (UK);
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have less than £23,000 in savings/capital (this includes any money your partner has.
In all cases, you will have to contribute half of your care component of DLA, and all of your Severe Disability Premium, if paid to you with your Income Support, towards your care costs.
Applications are also subject to prioritisation. We give priority to applicants who fall into the following goups.
Our first priority group is:
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If you are in work or self employed for at least 16 hours per week your application will be accepted so long as you meet the rules about who can apply to the ILF
Our second priority is:
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If you are in receipt of Income Support, Pension Guarantee Credit, Income Based Job Seekers Allowance, Income Related Employment and Support Allowance or have an income similar to Income Support level* even though you do not receive the benefit AND have a total care package which is expected to add up to at least the minimum package cost currently fixed at £500 per week**.
* Only once the financial information form is completed and returned to us, will we be able to tell if your income is close enough to Income Support levels for your application to be accepted. From 31 March 2009 people with income no more than 25% above income support level will be prioritised.
**£500 refers to the total cost of the care package, including Social Services and ILF funding and any personal contribution.
If you are not in one of the groups listed above, it is unlikely your application will be successful.
If you meet the eligibility criteria and wish to apply you can download an application form. Click here for more information.
An correction made by the ILF
I wrote to the Independant living Fund and asked
"Dear ILF,
I attached the information received.
According to the DWP statics at November 2008 (737,540 people accessed High Care) based upon the 21,534 who currenlty access the IL Fund. This would suggest and show that only 2.92% would receive social service care provision. I would suggest and thought that this figure would have been higher given the numbers accessing DWP High care allowance?
Disability Living Allowance - all entitled cases Caseload (Thousands) : Care Award Type by Gender of claimant
| Total | Gender of claimant | |||
|---|---|---|---|---|
| Female | Male | Unknown | ||
| Caseload (Thousands) | Caseload (Thousands) | Caseload (Thousands) | Caseload (Thousands) | |
| Total | 3,044.55 | 1,516.99 | 1,527.55 | - |
| Care Award Type | 737.54 | 373.53 | 364.01 | - |
| Higher Rate | ||||
| Middle Rate | 1,032.48 | 481.21 | 551.28 | - |
| Lower Rate | 842.93 | 452.54 | 390.39 | - |
| Nil Rate | 431.59 | 209.72 | 221.88 | - |
As ever, the devil is in the detail. The options for reform, the green paper makes clear on page 105, apply only to the costs of people's care, not their accommodation. "This is because the state would not pay for people to buy their food or pay their mortgage or their rent if they were living at home."
While this is logical and consistent with the position in Scotland, it was not expected. Hitherto, the debate around a new system of care and support for elderly and disabled people in England had made no discernible distinction between the costs of bed and board and those of help with washing, dressing, eating and drinking.
So what does this mean? As the green paper states, the costs of accommodation in a care home can be "as much again" as those of personal care. Therefore the proposals for debate could cover as little as half the total bill facing an older person entering a residential home.
Ian Owen, chairman of Partnership Assurance, currently the only company offering pre-funded long-term care insurance, said: "This is buried in the green paper. It seems like a little bit of smoke and mirrors."
All the costings in the document are based on this distinction. At 65, it says, a woman can expect to face average care costs of £40,400 and a man (who will not live as long) £22,300. Overall, men and women face an average bill of £31,700.
Against this, the three options set out for debate would leave an individual paying an average £20,000-£22,500 under a basic partnership scheme, though some would pay far more; £20,000-£25,000 under a voluntary insurance scheme, though the uninsured might pay much more; and £17,000-£20,000 under a compulsory comprehensive scheme.
On top of this, however, people with the means to do so would still need to pay for their own accommodation costs. At present, care homes do not separate such costs within their overall fees.
Sheila Scott, chief executive of the National Care Association, which represents many smaller care home providers, said care costs could in many instances be approaching two-thirds of total fees because of the growing dependency of people entering residential care.
The other controversial issue in the green paper is the proposal to "consider integrating some elements of disability benefits, for example attendance allowance (AA), to create a new offer for individuals with care needs".
This would mean stopping payment of AA, which is not means-tested and is currently paid to 1.6 million people aged 65 or over at rates of £47.10 or £70.35 a week, costing £4.4bn, and converting it into a discretionary grant focused on those most in need. Existing claimaints would have their money protected.
Stephen Burke, chief executive of older people's charity Counsel and Care, while praising the green paper as a whole, warned of "a massive rearguard action to defend this benefit which is very popular with older and disabled people".
The green paper appears to rule out integrating similarly the equivalent benefit paid to younger disabled people, the care component of disability living allowance. Ministers, who are known to have been agonising over the benefits proposals, may have decided that would have been a provocation too far.
Younger disabled people were hoping that the document would offer a clear commitment to "portability" of entitlement to care and support – that is, a right to move from one local authority area to another and retain the same services.
The green paper does not go this far. It proposes portability of one's assessment of need, but not necessarily a guarantee of the same services to meet that need. Part of the debate to come, it says, must be about whether local authorities should retain the power to vary provision of services.
The debate, which will run until 13 November, is designed to be a followed by a white paper in 2010. But a general election looms and Labour may not be in a position to follow through.
Much attention will focus on the Conservative shadow health secretary, Andrew Lansley, who promised on BBC
radio yesterday, ahead of the green paper's release, that if it did not contain costed proposals, "we will come forward with our proposals before the election".
http://www.guardian.co.uk/society/2009/jul/15/social-care-green-paper-costs
The Health and Social Care Advisory Service, is an evidenced based service development organisation working in all aspects of mental health and older people’s services across the health and social care continuum.
The Health and Social Care Advisory Service started out as the Health Advisory Service within the Department of Health. Throughout its 40 year history, the Health and Social Care Advisory service has made an important contribution reporting independently on good and bad practice and offering advice and support to local services, starting with the Ely Hospital scandal in 1967. In April 1997, the Department of Health transferred management responsibility for our organisation to a consortium comprising the Royal College of Psychiatry, the British Geriatric Society and the Office of Public Management. Since this time the Health Advisory Service has evolved into the Health and Social Care Advisory Service (HASCAS). We have been a registered charity and a Company Limited by Guarantee since 1997.
Since 2005 HASCAS has not been managed by its original consortium, choosing to become entirely independent.
HASCAS maintains its traditional links and functions. We are proud of the fact that our organisation very much pioneered the usage and adoption of standards and systematic methodology when conducting service reviews and inquiries. This evidence based, objective and robust way of working is central to everything that we do. Our values encompass the following:
- the experience of service users and carers is a priority for us and we aim to make a positive difference to people’s lives and their experience of the services that they use;
- we aim to be systematic, rigorous and reflective, building on the available evidence provided by research, practice and user experience;
- we aim to add value to health and social care through using our extensive experience to work alongside organisations, starting with where they are and using interventions designed to strengthen local capacity;
- we aim to be an organisation that is constantly learning from our work, and that contributes to the learning of others.
HASCAS affords a real opportunity to the service because of its independence and its ability to be reflective and raise issues that may otherwise be overlooked because of other priorities. HASCAS adds choice and diversity in service development and enhances and challenges the thinking about services and the experience of those that use them. Over every 24 month period HASCAS works with an average of 60 NHS Trusts. In addition we also work with SHAs, social services, Higher Education institutions, the Department of Health and the Ministry of Defense.
We believe that we can help your organisation in a wide variety of ways, and can ensure excellent service, value for money and an experienced team with national standing.
http://www.hascas.org.uk/
Key messages contained in our on the day briefing:
- The LGA has long called for reform of our adult social care and support system. Councils do an incredible job to ensure the vulnerable members of our society get the services they need but the system is not fit for the challenges of the twenty first century. The combination of insufficient funding, increased demand from an ageing society and escalating costs is already placing an immeasurable strain on adult care.
- We recognise the perceived and real unfairness that has resulted from the way the current system is funded and therefore support a nationally consistent system of assessment alongside a commitment for the state to fund an agreed minimum portion of each individuals care package.
- Councils know all too well, as the Government acknowledges in the paper, that there is a need for society to pay more for care and support in the future if we are to meet the needs of all those who require care. We accept therefore the need to consider options such as insurance schemes. This must be done alongside a wider debate on the total funding for health and social care, to ensure scarce resources are used effectively and focused on prevention, particularly after a decade that has seen funding for health increase in real terms by more than 6 times the increase in funding to local government to deliver services like social care. We do not believe it is right to conclude that there is not enough money in the system before having this debate.
- Local government already contributes a significant amount to total local adult social care expenditure through Council Tax. We estimate that local government contributes 39%, or more than £5.3bn to total adult care spend of over £13bn. In some areas councils fund more than 80% of their adult care expenditure through Council Tax.
- The Green Paper presents two system options: a part local/part national model and a fully national model. We want to see a part-national, part-local system with a single, transferable assessment of needs and means being applicable anywhere in the country but the services to meet need and the amount to pay for them decided locally.
- The LGA would strongly reject any attempt to ‘nationalise’ the care service. We do not support the option for a National Care Service that is fully nationally funded. This would:
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undermine councils’ flexibility in commissioning and designing care services around the needs of the user, which is clearly at odds with the commitment to personalisation;
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hamper the ability of councils to join-up social care, health, housing and other systems to provide better outcomes for local people;
be less responsive than a locally-funded and locally-managed system; -
lessen accountability by removing overall decision-making from democratically elected local councillors. Local people would effectively lose their voice on a service area that will affect everyone; and
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change the nature local government funding which could reduce local flexibility.
- Balancing national consistency and local flexibility is key to the future of a successful, reformed system of adult care and support. Democratically elected local government must be able to decide with individuals what form support should take, within a national framework and an adequately funded system. This means adequate resources being allocated at a local level to take account of local need, local markets, and the local range of statutory and non-statutory organisations that are involved in care and support, which are unique to each area.
- Reform will take time but the difficult decisions that need to be made must not allow this crucial issue to slip down the agenda nor can the real funding pressures that are facing councils today be ignored. We are pleased that social care is finally getting the recognition it deserves and no longer being seen as the Cinderella service alongside health and education.
The LGA set out detailed proposals for a reformed system in A Fairer Future
Social Care Green Paper - LGA on the day briefing (PDF, 11 pages, 169KB)
http://www.lga.gov.uk/lga/core/page.do?pageId=2203259
The big six energy suppliers have told the regulator Ofgem that there is little chance of any further cuts in their tariffs this coming year.
They were responding to a call from Ofgem last month to pass on more of the recent fall in wholesale energy costs.
Ofgem's latest report says these lower costs will boost suppliers' gross profits, on each dual-fuel customer, by £60 this year.
The firms say other costs which make up 40% of bills are rising steeply.
Consumer Focus said the industry's responses were a "chorus of excuse and self-justification".
"In spite of increased margins and lower wholesale gas prices, there is the inevitable talk of higher domestic bills," said Robert Hammond of Consumer Focus.
"Ofgem asked the big six companies to let their customers know what to expect.
"That's precisely what they have done," he added.
Response
In August, Ofgem wrote to the chief executives of each of the big six energy firms, urging them to "respond" to falling wholesale prices as some poorer customers would be suffering hardship from high prices during the winter.
Depending on how good suppliers were at buying their energy in advance, the regulator says their wholesale electricity costs have fallen in the past six months by more than £7 per megawat hour, equivalent to £29 per customer's annual bill.
Meanwhile gas wholesale costs to the energy companies have dropped by an average of 10p per therm, or £59 for each customer's bill.
A spokesman for Ofgem stressed that the regulator was not ordering the suppliers to cut their prices, but merely to explain their pricing policies more clearly to their customers.
Falling costs, higher profits
The regulator's previous two quarterly reports on the relationship between wholesale and retail prices found that there was no evidence that suppliers had failed to drop prices when costs fell.
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If retail prices do not change, these lower cost will be reflected in higher gross margin Ofgem
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However its third quarterly analysis suggests there is now scope for the firms to do so.
Ofgem estimates that the gross profit of each of the big six firms for the next year will amount to an average of £170 per dual-fuel customer.
That compares to an average gross profit of £110 over the past three years.
Looking ahead by 12 months, Ofgem estimates that the wholesale cost of electricity will fall by around £25 per customer and that of gas by around £40.
"If retail prices do not change, these lower cost will be reflected in higher gross margin," Ofgem says.
No cuts likely
The big six firms were united in rejecting the suggestion they should agree now to cut tariffs in the coming months.
Some even hinted that customers' tariffs might be higher in a year's time.
• British Gas - "Prices [are] likely to remain at historically high levels, and in fact likely to increase as non-commodity costs rise ever upwards."
• EDF Energy - "We would of course be prepared to reduce tariffs if market conditions allow."
• E.ON - "[We] do not believe there is a clear message regarding future wholesale costs movements that can be communicated to customers."
• RWE - "A retail price commentary cannot be based only on a narrow view of wholesale costs and in any event wholesale costs need to be weighed against increases in other costs."
• Scottish and Southern Energy - "With forward annual wholesale prices significantly higher, and with upward pressures in terms of distribution, environmental and social costs, seeking to avoid an increase between now and the end of 2010 is an important goal."
• Scottish Power - "There are no immediate signals that would indicate a fall in retail prices for this winter, and risks of an increase next year."
Volatile costs
The gross margin made by energy firms has to cover their every-day running costs, such as paying staff and selling their services, and so does not automatically translate into profits either for further investment or dividends for shareholders.
Ofgem acknowledged that energy firms also have other important costs which push up domestic and industrial bills.
Among them are the cost of subsidised "social tariffs" for poorer customers, and the cost of dealing with the bad debts of those customers who cannot pay their bills.
The bills that customers do eventually pay are also heavily boosted by the cost of paying for the transportation and distribution of gas and electricity around the national networks, and the cost of meeting the government's environmental obligations.
These cannot be controlled by the energy suppliers and are passed straight on to the consumer.
Overall, these extra costs now make up £360 of the average annual dual-fuel bill, compared to the £597 wholesale cost of the fuel itself.
Ofgem also noted that firms may start to face higher wholesale energy costs in the spring of next year.
The firms argue that there will always be a lag between wholesale price movements and customer tariffs.
"Prices are very volatile," said Andrew Horstead of energy consultants Utilyx.
"If they were fed through immediately consumer bills would naturally be very volatile," he added.
http://news.bbc.co.uk/1/hi/business/8262360.stm
Five of the UK's big six energy suppliers have no plans to reduce prices for customers who pay by cash or cheque, the BBC has learnt.
This is despite a licensing system that came into effect at the start of the month designed to achieve just that.
The new Ofgem licence aims to reduce any price difference between paying by quarterly bills or direct debit.
The suppliers say the higher prices for cash and cheque customers reflect the extra processing costs.
The news comes as consumers prepare for the extra costs of winter.
Passing savings on
Despite the provisions in the new licence, five of the big six suppliers, British Gas, E.On, Npower, Scottish Power and Scottish and Southern, say they have no plans to reduce their prices for cash and cheque customers.
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What the companies are doing is when they're able to drive down costs, they're passing those savings on to the customers Garry Felgate, Energy Retail Association
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Only EDF is considering price changes.
Garry Felgate, chief executive of the Energy Retail Association, which represents suppliers, said Ofgem was happy that their prices already reflected their costs, and the big six were trying to keep bills down.
"What the companies are doing is when they're able to drive down costs, they're passing those savings on to the customers," he said.
A spokesman for Ofgem, the energy regulator, said it would be keeping a close watch on the situation and would take action if necessary.
'Paying over the odds'
Watchdog Consumer Focus says the average difference between the annual bill for direct debit customers and those paying quarterly bills is now £97, up 10% since April.
Zoe McLeod from the organisation said the new licence clearly stated that higher prices for quarterly bills could not be an excuse for squeezing out extra revenue. They could only be justified by extra costs.
"We do have concerns that despite the introduction of new licence conditions, consumers who pay by cash or cheque continue to pay over the odds," she said.
According to Malcolm Keay, an expert at the Oxford Institute for Energy Studies, there is also a suspicion that higher prices for customers who do not use direct debits can be a punitive measure, designed to encourage them to switch their payment method.
http://news.bbc.co.uk/1/hi/business/8274183.stm
The number of vulnerable people seeking help to pay their water bills in England has risen 20% in the past year, figures from the regulator Ofwat show.
The data also reveals that the take-up of the WaterSure tariff varies widely in different areas of England.
Every water company in England must offer the tariff to those households on certain benefits and with children, or those housing people who are ill.
Ofwat is to investigate how suppliers deal with vulnerable customers.
Vulnerable
The WaterSure tariff was formerly known as the Vulnerable Groups Scheme and was introduced in 2000.
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Unfortunately there are still many people out there who could benefit from the tariff who do not know about it Regina Finn, Ofwat
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The payment system is open to people on water meters who receive benefits or tax credits and have responsibility for at least three children aged under 19.
It is also available to households where somebody has a medical condition that means they need more water, such as Crohn's disease or Eczema.
Those in the scheme will pay no more than the average household bill for their region.
Applications must be made every year and they increased from 24,121 in 2007/08 to 28,879 the following year. The numbers have grown year-on-year from 4,171 in 2000/1.
However, an estimated 100,000 customers could take advantage of the tariff and a more detailed breakdown of the figures shows how some areas of England see a much higher take-up than others.
There were 6,782 applications to South West Water for the tariff, many more than the next highest take-up of 3,399 Severn Trent customers.
Although the size of the companies' customer base, the proportion of customers who have meters, and household income all affect this take-up, Ofwat chief executive Regina Finn said promotion of the scheme was an issue.
"Unfortunately there are still many people out there who could benefit from the tariff who do not know about it," she said.
Prices
The regulator sets guidelines on how companies deal with vulnerable customers and a workshop is being held next year to encourage companies to communicate effectively with these groups of people.
The WaterSure tariff is advertised in a number of ways, including information on bills, leaflets in GP's surgeries and libraries, as well as talks to community groups and charities.
The two water companies operating in Wales have similar tariffs, but only operate on a voluntary basis.
In July, Ofwat revealed how much companies could charge for water and sewerage in 2010 to 2015.
In a snub to the companies, it said the typical bill in England and Wales should be cut by £14 to £330 over the five years, excluding inflation, although the companies had wanted prices to rise.
But companies suggest that customers might suffer as a result of the plans.
Water and sewerage services in Scotland and Northern Ireland are regulated separately.
A "home protection scheme" to prevent older people having to sell their properties to fund long-term care has been unveiled by the Conservatives.
In England, residential care costs must be met by the individual if they have assets of more than £23,000.
Tory health spokesman Andrew Lansley said the party would invite people to pay a one-off fee of £8,000 at age 65 to waive residential fees for life.
Ministers have dismissed the voluntary scheme as "flawed and hasty".
The government put forward its own proposals on elderly care at the Labour Party conference.
Gordon Brown outlined plans for a "National Care Service" so those with "the highest needs" could be cared for in their own home.
'Weight of worry'
The Conservatives say that their scheme could be operated by existing insurers using branded products, with the government setting out basic rules and safeguards to ensure it remained financially viable over the long term.
They insist the voluntary scheme would be self-financing as only 20% of those paying in would get ill enough to have to draw on the scheme, and say no public money would be needed to operate it.
The party says 45,000 people are forced to sell their homes each year to pay for residential care, with a typical two-year stay costing £52,000.
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I think what that indicates is that at long last this issue is at last central to the political debate Patrick South,
Age Concern and Help the Aged |
Mr Lansley added: "This scheme is a genuinely huge step forward for England's care system and will lift a major weight of worry from the shoulders of all older people and their families.
"In 12 years, Labour have failed to offer older people any hope of a way out of the forced home sales crisis.
"A vote for the Conservatives is now a vote for a real, affordable alternative to losing your home if you need to enter residential care."
Ideas welcomed
Writing in the Daily Mail, shadow chancellor George Osborne said it was an injustice that people were forced to sell their houses to fund the cost of going into a care home.
But Care Services Minister Phil Hope called it a "flawed and hasty" idea.
He said: "£8,000 would not be enough to cover the cost of residential care. So where do they propose the rest of the money comes from?
"Few people choose to pay into voluntary schemes. And it's hard to see how it would prevent people from having to sell their homes. How many pensioners have £8,000 lying around? Or £16,000 if you're married?"
Patrick South from Age Concern said he welcomed ideas from all the political parties.
He said: "Last week we had the prime minister making his announcement on homecare for people with critical needs for care in the home and this weekend we're getting a proposal about residential care.
"I think what that indicates is that at long last this issue is at last central to the political debate."
Richard Humphries, from the King's Fund, the health think-tank, said: "I think the big challenge will be persuading enough people to join the scheme so the figures do add up.
"The more people join, the better it is, because there's more money going in. The crucial thing is will people be persuaded that this is something which is right for them and something they can afford."
http://news.bbc.co.uk/1/hi/uk_politics/8288111.stm
Care information
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Care home checklistChoosing a care home is an important decision. Finding out as much as you can about a home will help you to make an informed choice.
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How to find a care homeOur honest‚ easy-to-follow information guide on choosing the right care home will ensure you make the right housing choices.
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Help with care in your own homeOur clear‚ easy information guide to sources of help and first steps towards obtaining that help.
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Direct Payments videoThis film features older people in receipt of Direct Payments who feel that their lives have been enriched by being able to access support that they have chosen.
- Attendance Allowance
- Attendance Allowance - FS34
- Basic guide to attendance allowance and disability living allowance - IS21
- Care home checklist
- Care home closures - IS10
- Care home funding and attendance allowance - IS13
- Carer's allowance - IS15
- Choice of accommodation - care homes - FS60
- Choice of accommodation - Care homes - IS25
- Deprivation of assets in the means test for care home provision - FS40
- Deprivation of Liberty Safeguards - FS62
- Disability equipment and how to get it - FS42
- Disability Living Allowance - FS52
- Finding care home accommodation - FS29
- Finding help at home - FS6
- Help with health costs - IS20
- How to resolve problems and make a complaint about a local authority - FS59
- Later life as and older lesbian‚ gay or bisexual person
- Local authority assessment for community care services - FS41
- NHS continuing health care and NHS-funded nursing care - FS20
- Paying for care and support at home - FS46
- Paying for care in a care home if you have a partner - FS39
- Paying for permanent residential care - FS10
- Paying for temporary care in a care home - FS58
- Planning for later life: transgender people - IS30
- Self directed support: direct payments‚ personal budgets and individual budgets - FS24
- Supporting people: paying for supported accommodation - IS19
- Treatment of property in the means test for permanent care home provision - FS38
http://www.ageconcern.org.uk/AgeConcern/care_information.asp
It's the dogs that do it. Whenever people are struggling to grasp the idea of personal budgets, the mist tends to clear when they hear one of a growing number of stories of people who have used taxpayer funding to get and keep a dog.
Personal budgets are the most significant social policy reform of this government, and as budgets shrink and thoughts turn to how we can do more for less, it is clear that it is an idea that has the potential to transform the landscape of public services.
Instead of assessing a person's need and eligibility for a public service, then deciding on the most appropriate service for them, the individual is given an indicative cash pot and invited to plan how to spend it to meet agreed outcomes. So people who need to exercise may get a dog. People who are socially isolated may join a local art club.
Bicycles, and even cars, have been purchased where a case for mobility has been made. Famously, disabled football fans have bought season tickets for friends to accompany them to matches, thereby giving respite to family carers.
When the concept was unveiled to the first NHS agencies that are to adopt it for people living with long-term health conditions, a man recovering from mental illness was asked to explain what he had spent his personal budget on. "I joined a dating agency," he said, to a collective dropping of jaws. "It didn't work out in the way of lasting romance, but it did a lot to restore my self-confidence."
The personal budget – in particular, the transparent, upfront allocation of resources rather than the cash transfer – embodies a fundamental shift of power from the professional to the individual. In the jargon, it is called "self-direction" or "co-production", and it starts to bring public services up to speed with other aspects of 21st-century life.
In the past five years, more than 20,000 people in England have moved on to personal budgets. In Manchester alone, almost 3,500 people now operate their own service accounts. Within the next 12 months, all new social services clients should be offered a budget at the outset. The idea is being tested not just in the NHS, but in education and for homeless people.
Evaluations have found that people using the budgets like the choice and control, report improved quality of life, and feel more a part of the community. They do not themselves have to handle the cash: payments can be made on their behalf, if they prefer, and the idea can be varied so that budgets are held by professionals or carers while the user of services still makes the decisions. It also puts people who are eligible for state funding on a par with others who pay their own way: if you don't like the service offered by the council or local NHS trust, you can look around for another.
Critics say personal budgets are not for everyone and not for every public service – both of which are true – and fear that they will be used to cap spending by not being increased in line with people's changing needs. This is an implicit danger demanding further thought, but the transparency of the resource allocation is infinitely preferable to the cutting and rationing that goes on behind the closed doors of the traditional system.
But there is another point that gives the idea real relevance to the current fiscal crisis. Emerging results suggest that when people are given control of a budget, they typically underspend it. Citizens make better shoppers than the state. Some of the earliest estimates put savings at an average 10% overall, rising to 15% among people whose needs remained stable.
The exchequer could simply pocket such a dividend or, by way of incentive, budget-holders could be allowed to keep a share. More imaginatively, there could be a three-way split: a saving for the state, a cash incentive for the individual, and a third portion for the local community to invest in whatever it so chose.
The beauty of this would be that the community would have an incentive to support residents in receipt of personal budgets. The more informal care and help given by friends and neighbours, or by full-blown volunteer schemes, the greater the payback for local people. How to build "social capital" is one of the key challenges for policy-makers across the political spectrum. This proposal would make a practical start.
http://www.guardian.co.uk/commentisfree/2009/sep/29/personal-budgets-old...
Elderly people living in care homes are being put at risk because of sub-standard systems for handing out medicine, according to a report.
University of London researchers found seven in 10 residents were victims of drug errors, having carried out half-day snapshot inspections of 55 homes.
They blamed inadequate information, over-worked staff, poor teamwork and often complex courses of medication.
The government said a review was focusing on medication "weaknesses".
Nurses are part of some of the workforces in specialist units caring for people with severe problems, such as late stage dementia.
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This is just one of the many flaws in the current care system which can have a huge impact on the quality of life for many older people Andrew Harrop, of Age Concern and Help the Aged
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But the majority of teams working in more than 20,000 care homes across the UK do not include people with clinical training.
Instead, they rely on pharmacists and GPs signing-off repeat prescription requests without any or little face-to-face contact with residents.
The report, published in the journal Quality and Safety in Health Care, said the system meant vulnerable residents were put at risk.
During the inspections, which took place in the mornings when two-thirds of the daily drug courses would be taken, researchers gathered data on 256 residents.
In total, mistakes were made in 178 cases with many the victims of more than one error.
The most common mistakes involved wrong dosages, insufficient monitoring of residents after medication had been taken and people being given the drug at the wrong time.
But rather than blaming the care home staff, the researchers said they were often not given enough training or information about handing out medication.
The report said part of the problem was that care home residents were increasingly being given complex courses of medication - each resident was taking eight different pills on average a day.
Lead researcher Professor Nick Barber said: "It is a cause for concern. Residents are usually taking a cocktail of medicines and are more susceptible to drug side-effects as a consequences of ageing.
"I think care homes need more help. Pharmacists and GPs should be taking more responsibility and visiting care homes more than they do."
Consequences
The researchers also collated information on the consequences of the mistakes.
Most were only minor, although one resident did suffer a thyroid complication.
Sheila Scott, of the National Care Association, agreed care homes needed help.
"Mistakes are always indefensible, but this is a problem we keep hearing about," she said.
"We need to face this challenge and find a solution. Staff working in care homes are not medically trained and yet they are being asked to look after people with more and more complex needs."
Andrew Harrop, of the newly merged Age Concern and Help the Aged charity, said the findings were "shocking".
"This is just one of the many flaws in the current care system which can have a huge impact on the quality of life for many older people."
The Department of Health said the government was aware of the issue and was now working with the regulator, the Care Quality Commission, which was carrying out a review of healthcare in care homes.
A spokeswoman added: "The review will take into account the findings of the research and will focus on strengthening weaknesses in the systems involving medication."
http://news.bbc.co.uk/1/hi/health/8291629.stm
The minister was addressing the Labour Party conference when she announced that volunteer centres would not receive any new government funding in the short-term and must find ways to become self-sustaining.
Ms Smith suggested volunteer centres should buy buildings and rent them to other groups, forming community hubs that would generate income.
She also suggested they focus on winning contracts with primary care trusts and raising their profile in order to retain their funding from local authorities.
These measures were responded to by Kevin Curley of infrastructure body NAVCA, who suggested they were unrealistic for most volunteer groups:
“It’s a huge departure from volunteer centres’ core business, which is helping people to get involved with voluntary work.”
Mr Curley also expressed his fear that volunteer centres will face local government cutbacks:
“I’m disappointed that when local authority budgets are being squeezed, the minister isn’t saying that protecting funding for volunteer centres will be a priority.”
Source: Third Sector, 02/10/2009
http://www.fundingcentral.org.uk/newsview.aspx?WCU=DSCODE%3dOTSSCMLIVE%2cNEWSITEMID%3d248-N7359
Fuel bills have become a "scandal" as the biggest suppliers in the £25bn-a-year industry make vast profits supplying gas and electricity to Britain's 20 million families, independent experts say.
Today The Independent launches a campaign demanding that the "Big Six" power companies lower their prices, amid accusations that they failed to pass on cuts in fuel bills after the price of oil fell from last summer's record highs.
Utility companies put up power prices by about 42 per cent last year, or about £382 per household. Since then, the wholesale cost of gas and electricity has halved but bills have fallen by only 4 per cent.
Critics say there is too little competition between British Gas, E.ON, EDF Energy, Npower, Scottish & Southern and ScottishPower. The average domestic fuel bill paid by direct debit is £1,141 – but it varies by less than £20 between the six companies.
Over the past month, the mark-up charged by the established power suppliers has been exposed by two new operators who are taking advantage of rock-bottom wholesale gas and electricity prices to slash bills. First:Utility's typical tariff for bills paid online is £954, while Ovo Energy charges £978, a saving of £163 to £187 over the Big Six. Quarterly and pre-payment customers who switch to Ovo or First:Utility would save £287.
By contrast, millions of Big Six customers are languishing on standard deals far costlier than online tariffs offered to savvy customers who shop around.
Some of those expensive packages will hit home this winter when the two British-owned power companies reveal their profits to the City. One million families served by E.ON, ScottishPower and EDF Energy will also find themselves paying up to £296 a year more for gas and electricity after their fixed tariffs ended last week.
As part of the "Great Energy Rip-Off" campaign, The Independent is encouraging its readers to switch supplier to spark greater competition. We are also calling on the Big Six to lower prices by 10 per cent, or about £125 a year, and urging ministers to remove the licences of suppliers that do not pass on falls in wholesale fuel prices.
Of the Big Six, four are owned by foreign corporations which have been accused of treating Britain like a "treasure island". They are expected to report vastly higher profits thanks to falling wholesale costs. While the firms were paying 85p per therm of gas last September, the price now is 35p. Electricity prices have fallen from £90 to £40 per megawatt hour.
According to a review by the Energy Contract Company, an independent energy forecaster, wholesale gas prices will stay low this winter and remain so for three years. "The fall in spot prices has meant the domestic market is now highly profitable," it said in its Gas Market Review, which put current profit margins at 20 to 30 per cent.
In August, the energy regulator Ofgem's request for price cuts was rejected by suppliers who warned that they might even raise bills. Using confidential commercial data, Ofgem – which has been accused of treating the Big Six too leniently – estimated that while they usually made £110 per year on "dual fuel" customers who obtained gas and electricity from one company, this year they would make £170 per customer – an increase of 55 per cent.
According to a "conservative" estimate by the campaign group Consumer Focus, bills are about £100 too high. But an independent energy expert, David Hunter, said that given Ofgem's "caution" he estimated that a figure of £120 a year was more accurate.
"The failure of the suppliers to pass on the massive reductions in energy prices... is approaching scandal proportions," said Mr Hunter, of Britain's biggest independent energy analyst McKinnon & Clarke. "Some suppliers have recently made small reductions to niche tariffs. However, these token discounts are only open to direct debit and online customers and do not change the overall trend."
Last year, Ofgem dismissed any suggestion that the power companies were colluding to fix prices. However, after initially insisting that the market was working, the regulator's Energy Supply Probe found that pre-payment and electricity-only customers were being overcharged by £500m. Energywatch, the disbanded consumer body, blamed a lack of competition.
As a result of takeovers since privatisation in the 1980s, the number of household power suppliers has fallen from 20 to six. EDF Energy, E.ON, ScottishPower and Npower have been taken over by overseas corporations, making them more resistant to national pressure to lower bills.
Confusing bills from the firms, which have a baffling array of 4,000 different tariffs, also make customers less likely to search for a better deal.
The Government urged firms to lower prices this spring, but since then ministers have been quiet and the Department for Energy and Climate Change has issued no press releases on household bills all year. The Big Six, which control 99 per cent of the domestic market, are likely to face new pressure later this year as they reveal bumper earnings. This month, Scottish & Southern is expected to announce interim profits of almost £600m – twice last year's figure.
http://www.independent.co.uk/news/business/news/the-great-energy-ripoff-and-how-you-can-avoid-it-1798701.html
The UK site for statistics on poverty and social exclusion.
This site monitors what is happening to poverty and social exclusion in the UK. The material is organised around 100 statistical indicators covering all aspects of the subject, from income and work to health and education.
The indicators and graphs can be viewed by age group or by subject using the menu on the left.
The material covers all parts of the United Kingdom, with specific sections for Scotland, Wales and Northern Ireland.
All data is from official sources and is the latest available. All graphs and text are updated whenever new data becomes available.
The INDICATORS
Browse the UK indicators, or those for Scotland, Wales, Northern Ireland, rural England or the European Union.
THE REPORTS
The eleventh annual UK report was published in December 2008. Reports are also available for Scotland, Wales, Northern Ireland, rural England, ethnicity and disability.
WHAT IS NEW
The latest UK-wide analysis was published in December 2008. Each month, all the analyses for which there is new data are updated.
SUBJECT OF THE WEEK: rural poverty and social exclusion
At the end of September, we published a comprehensive report on poverty and social exclusion in rural England for the Commission for Rural Communities. It shows that, although levels of poverty in rural areas are generally less than than those in urban areas, the differences are not great. In other words, most of the indicators in the report reveal significant levels of poverty and social exclusion in rural England. View the full report as PDF
Customers are being overcharged by an average of £74 on their annual energy bills, an independent consumer watchdog has said.
Consumer Focus says energy suppliers have not been fully passing on declines in wholesale costs.
Crude oil has fallen from $147 a barrel in July last year to about $70.
But the Energy Retail Association says that other costs have gone up and there is no evidence of suppliers increasing prices faster than they reduce them.
Consumer Focus says its research, based on applying hedging strategies outlined by the energy regulator Ofgem, shows that energy suppliers are overcharging customers by a combined £1.66bn this year.
But Ofgem, which concluded an investigation into the energy market last year, said it was "entirely confident" in its analysis of wholesale and retail energy prices.
"We cannot accept Consumer Focus' claim to have used our methodology for calculating wholesale costs. They have borrowed some of it but they appear to have made assumptions that are simply wrong," the regulator said.
Fuel fears
All of the six main energy suppliers have cut their prices since the beginning of the year, but Consumer Focus claims that current gas bills should be at least 7.4% cheaper (£60.10 annually) and electricity bills at least 3.1% cheaper (£13.80 annually).
"Consumers have feared for months that the big six suppliers might not have passed on the full cuts in wholesale energy prices, but the companies claimed to have acted fairly," said Philip Cullum from the watchdog.
"Our new research for the first time shows the reality. The companies are pocketing £1.6bn extra, while millions of households struggle to make ends meet."
British Gas cut its gas prices by 10% in February and its electricity prices by 10% in May.
E.On, EDF Energy, Scottish and Southern, Scottish Power and Npower all lowered their electricity prices by the end of March.
Energy companies argue that bills are not based on wholesale costs alone.
"The amount of gas and electricity a customer uses can form as little as half their annual bill," said Garry Felgate from the Energy Retail Association
"The remainder includes other costs, such as transporting gas and power around the country and meeting the government's carbon emissions reductions targets. All these costs have risen sharply in recent years. Consumer Focus has ignored these facts during its research."
http://news.bbc
.co.uk/1/hi/business/8117962.stm