A LOCAL council has launched an initiative designed to reduce the cost of gas and electricity for people all over the country.

More than 1,600 households across Scotland saved a combined total of £507,000 – or around £300 each – on their annual bills by signing up for a previous version of North Lanarkshire’s It Pays to Switch scheme.

The only Scottish council to embark on such a venture, it hopes to help even more consumers to lower their energy bills this time round with a new one-year fixed-price deal it will negotiate on their behalf.

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North Lanarkshire energy solutions officer Tracey Harper said: “Our residents have been affected by both rising energy costs and other increasing cost pressures. Saving them money and enabling them to heat their homes to a comfortable level is, therefore, the focus of It Pays to Switch.”

Profit margins for the Big Six gas and electricity providers – ScottishPower, SSE, British Gas, EDF, E.ON and npower – are at the highest level on record, yet all have increased their prices this year.

British Gas was the latest to do so, with a 12.5 per cent rise in its standard variable electricity tariff earlier this month affecting 3.1 million people.

Ben Wilson, energy spokesman for price-comparison website GoCompare, said: “Though it’s not surprising to see British Gas hike their electricity costs just as energy usage increases, it’s still incredibly disappointing for the millions of homes that will be impacted.

“Energy providers are continuing to punish loyal customers year after year, rewarding their loyalty with higher prices and poor excuses. Simply put, if you’ve been with your supplier for more than a year, then there’s a good chance you’re paying more than you should be for your energy.”

Many households have already taken action by signing up for providers’ lower-cost fixed-price deals. However, these typically last just 12 to 18 months, after which those who fail to switch again will be rolled onto more expensive standard variable tariffs.

Around 40 fixed-price tariffs come to an end this month alone – about the same number as ended in July and August. As a result, website comparethemarket.com says 300,000 people across the UK face an average annual bill increase of £290.

The total additional cost for Scottish households could be over £7 million, if they allow themselves to be transferred to a standard tariff instead of going in search of a better deal.

There are significant savings to be found. Energy market regulator Ofgem calculates there is a difference of more than £450 between the average annual household dual-fuel bill of £1,292 and the cheapest option available, yet many people do not bother to look.

Mr Wilson said: “There are still around 17 million households on energy companies’ standard variable tariffs, which generally offer the worst value.

“If they all switched to a better deal, they’d be keeping money in their pockets rather than paying it to the Big Six energy companies. Loyalty only pays if you’re the one sending out the bills.”

North Lanarkshire’s scheme is designed to save participants the time and effort of comparing prices and choosing a new supplier for themselves. Last October’s auction was won by SSE and Robin Hood Energy.

The latest switch is open to homeowners and tenants all over the country, signing up is free and it takes just a few minutes. The more people who register interest, the better the saving the council stands to achieve, but there is no obligation to proceed.

Once applications have closed, national switching organisation iChoosr will auction the potential supply contracts on North Lanarkshire’s behalf, with the suppliers offering the lowest 12-month fixed-price deals for monthly and pre-paid gas, electricity and dual-fuel customers winning the business.

When the suppliers have been selected, everyone who registered before the closing date will be sent details of the deal appropriate to their needs plus a calculation showing how much they stand to save.

They can then choose whether to accept the offer. If they decide not to, they will simply remain with their current provider. If they accept, the switch will be completed on their behalf, with no need for them to contact their existing supplier.

To register for the council’s big switch, you will need details of your current contract and energy consumption from a recent bill then visit www.northlanarkshire.gov.uk/switch or call 01698 274526 by Tuesday, October 10.

Offers will be sent out from October 20 and anyone who wants to go ahead has until November 28 to accept. The switching process generally takes four to six weeks after that.