10 June 2009
ENERGY EFFICIENCY AND FUEL POVERTY: URGENT ACTION REQUIRED TO END FUEL POVERTY
With failure to meet its statutory obligation to end fuel poverty imminent, the Government should instigate an action plan as a matter of urgency to help the millions of UK households who remain in fuel poverty as a result of fuel price rises.
The Winter Fuel Payment should be made taxable and stopped for those paying higher rate tax so that more money can be directed to fund bigger and better-targeted energy efficiency programmes aimed in the first instance at the fuel poor.
To ensure more rapid improvement of the entire English housing stock, the range of current energy efficiency programmes should be consolidated into one comprehensive area-based programme to upgrade all homes and to be delivered by local authorities.
Launching his Committee's latest report - Energy efficiency & fuel poverty (HC 37) - Rt. Hon Michael Jack MP, chairman of the Environment & Rural Affairs Select Committee said:
"We need action and clarity - not further consultation - to tackle the three elements that drive fuel poverty: prices, incomes and energy efficiency levels.
"Firstly, the Government must act swiftly to bring forward practical measure before next winter, using technologies that are already well understood, to help the millions of households who remain in fuel poverty .
" Secondly, the Government should tax the Winter Fuel Payment and stop paying it to higher rate tax payers so that the money saved can be used to fund a larger programme of practical energy saving improvements. This should be aimed in the first instance at the fuel poor but then also for other vulnerable households - such as the disabled - with unusually high personal energy needs.
"Thirdly, ministers must clarify their objectives and stop confusing policies required across the board to improve the energy efficiency of England's entire housing stock with those programmes required to tackle fuel affordability in vulnerable households or fuel poverty in hard-to-heat homes."
To that end the Committee calls on the Government to:
Produce a detailed "road map" setting out how to deliver a national plan to make every home in England energy efficient to a minimum SAP* level of 65 and to SAP 81 wherever practicable.
Create a central budget into which energy companies pay their CERT contributions so that they can be pooled with money from other programmes, to fund a single consolidated comprehensive, area-based programme led by local authorities to deliver the national plan.
Michael Jack adds:
"The Government told us earlier this year it has plans for a 'Great British refurb' to provide basic insulation in all UK homes by 2015. The ambitions of these plans do not go far enough and so far little has been done to deliver them."
In a detailed review of the Government's policies and programmes on fuel poverty and energy efficiency the Committee also concludes:
Resources for tackling fuel poverty are inadequate and getting worse. Warm Front, the Government's main programme aimed at helping vulnerable households cut their energy bills, should see its budget increased rather than cut repeatedly. The recent increase in the maximum grant available under Warm Front was a positive development but unless the overall budget is raised, the net result will be that less work can be done and fewer families can benefit.
Warm Front should now be extended to include all hard-to-treat properties. The scheme should also be reviewed in 12 months' time to evaluate whether the revised grant maximum has been set high enough to fully address the challenge. Likewise, a review of Warm Front must examine whether timescales for completion of work can be reduced; whether the target SAP 65is being achieved; whether complaints about the scheme's contractors are being handled effectively; and whether it is possible to ensure greater use of local contractors.
CERT's emphasis on cavity wall and loft insulation should be altered, and the range of technologies available under Warm Front, should be expanded to include options such as ground source heat pumps, so that it becomes possible to improve solid wall dwellings or those off the gas grid. The Government must also develop a financing model for these technologies to make them accessible to fuel poor households.
Transparency around the Carbon Emissions Reduction Target (CERT) must be improved. Ofgem should require energy companies to make customers' bills clearer about the costs being passed on to them to pay for energy efficiency schemes being implemented under CERT. In addition, Ofgem should require energy companies to report annually both their overall spend on such schemes and how much of this comes from their own funds.
Ofgem has finally conceded that some customers, notably those using a pre-payment meter, have not fully benefited from competition. It must now do more to ensure energy companies tell customers about social tariffs and about who is eligible for them.
Tighter energy efficiency requirements for new homes under Building Regulations are welcomed but the Committee emphasises that these regulations must now be fully enforced.
The Government is also told that it should impose a higher level of energy efficiency in the capital investment programme which follows on from Decent Homes. It should also evaluate the cost of making the SAP 81 standard the norm for this programme.
Lastly, and by no means least, all schemes designed to help the fuel poor or improve energy efficiency would be better targeted if those organisations in charge of their delivery had better access to data on a range of variables including energy efficiency levels in homes, household incomes and fuel costs. DECC should survey current data needs and access arrangements as a matter of urgency.
NOTES TO EDITORS:
The Government has a statutory target to eradicate fuel poverty, as far as reasonably practicable, in vulnerable households by 2010 (and in all households by 2016).
Only 12% of 2.9 million people getting Winter Fuel Payments (WFP) in 2008-09 were classed as living in fuel poverty. Many fuel poor households did not qualify for this support.
* SAP is the Government's Standard Assessment Procedure for Energy Rating of Dwellings and uses a scale of 1 to 100, with a higher rating indicating a better level of energy efficiency.
CERT is the Carbon Emissions Reduction Target energy efficiency scheme funded by energy supply companies.
Further details about this can be found on the inquiry web pages at:
Energy efficiency and fuel poverty
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