People struggling to pay their soaring energy bills finally have something to look forward to.

The Department for Energy and Climate Change has announced a competition that will allow local authorities to bid for a share of £40 million in order to improve energy efficiency in fuel-poor homes.

As part of the scheme, a homeowner or tenant would be able to make energy-saving improvements to a building like draught-proofing, double glazing and loft insulation without having to pay all the costs upfront.

Under the Green Deal the bill-payer takes out a loan that is repaid through their electricity bill with loan repayments that should not exceed their expected savings.

Councillor Colin Hall, deputy leader of Sutton Council, expressed the authority’s support for the scheme, and said: “Household energy bills are soaring due to the high price for gas, oil and coal combined with the fact the UK’s homes are some of the most energy-inefficient in Europe.

“The council is deeply concerned that one in four homes are in fuel poverty and cold homes are damaging the health of vulnerable members of society, with cold-related illnesses costing the NHS nearly £1billion each year.”