How NGN have spent the available allowances
Below are our 3 funding streams. Click each one to find out more...
Vulnerability and Carbon Monoxide Allowance (VCMA):
Vulnerability and Carbon Monoxide Allowance (VCMA) – Ofgem funded allowance for NGN to spend over 5 years (2021-2026).
Total allowance increased from £6.85m to £19.64m in October 2023 (plus inflation).
Minimum of 25% to be spent on collaborative projects with the other Gas Distribution Networks.
Strict criteria for what this can be spent on – the 4 main categories are:
- Providing support to reduce fuel poverty and support energy affordability (including energy efficiency advice and income maximisation)
- Providing support to priority customers including targeted work for these groups and raising awareness of the Priority Services Register (PSR)
- Services beyond the meter, including support for the repair/replacement of appliances identified through GDN interventions
- Raising awareness of the dangers of carbon monoxide
All projects must demonstrate a positive Social Return On Investment (SROI) through a consistent SROI framework
Highlights from 23/24
- Increased spend due to additional VCMA allowance confirmed in October 2023
- Forecast year 3 was £4m, but actual spend was 45% higher
- Projects ranging from small amounts of less than £1,250 (NGN) to £567k per annum (collaborative)
- 53 current live VCMA projects
Spend focus during year 3 (updated strategy informed by partners and stakeholders):
- Health - effort to increase partnerships in this area, including an ambitious collab NEA health project
- Targeted projects with more in depth support for specific vulnerable groups
- Extending and scaling up of existing projects to end of GD2 (many collaborative)
- Increased resource for vulnerability team to efficiently manage the increased allowance/projects
Customer Support Fund (CSF):
NGN/Shareholder Funded - £150k per year (increased to £600k for 2022 – 2023 due to the cost-of-living crisis).
In place for 2021 – 2026. This fund was created to plug-gaps in existing funding streams. Designed by customers and stakeholders and reviewed every year, to ensure it is addressing funding gaps and reaching those in most need.
Highlights from 23/24
- Moved projects that could be funded under VCMA – ensure maximum impact for this fund
- Addition of un-billed energy revenue utilised – commitment for GD2
- Predominantly tier 1 support (high needs/intensity of support)
- CE project – predominantly supporting people pensionable age, with low income and multiple health issues (filling funding gaps)
Spend focus during year 3 (updated strategy informed by partners and stakeholders):
- Continuation of enhanced compensation payments for customers left without gas through emergency supply interruptions – an additional, early payment was introduced at 4 hours, to support increased energy costs
- Support first time gas connections/central heating
- Redcar Community Fund to support small grassroots projects, alongside the Redcar Hydrogen village trial
Customer Support Fund (CSF):
NGN/Shareholder Funded - £50k per year.
This fund has been in place 2016. It was created to identify grass roots projects, that can potentially be grown through the VCMA.
Highlights from 23/24
- In 2023/24 we continued to work with Tyne and Wear Community Foundation to fund projects based in the North East area
- We have developed 7 new projects using this year's fund:
o Bright Futures
o Headliners UK
o North Tyneside Disability Forum
o Easington Lane Community Access Point
o Community Action Northumberland
o ICOS
o Shiney Advice & Resource Project (SHaRP)
3 Tier Model:
This year we have adopted a 3 tier model to categorise the support that we fund
- Tier 1 - Includes projects focused on appliance repair/replacement, in-depth case work and targeting support towards high-risk groups, where there may be complex barriers to accessing or engaging in support.
- Tier 2 - Includes projects focused on direct awareness and lower-level advice.
- Tier 3 - Includes projects focused on awareness campaigns, lighter touch and self-initiated support.
