Cutting the cost of keeping warm

Struggling to meet the cost of keeping warm is not a new issue for low income households.

For example, of an Act of Parliament in 1811 led to the establishment of a charity which provided coal or other fuel to the poor.
    
In more recent history, concerns about affordability were particularly stark in the 1970s, undeniably linked to the developments in the oil price at that time.
    
It is not simply the cost of keeping warm that was of concern: those taking an interest in fuel poverty wanted to understand the reasons why some households faced particularly high costs. Attention was focused on the quality of housing. The impact of living in cold homes was also a major driver of concern. It has long been understood that certain people, such as the very young, the oldest pensioners and people with long‑term disability or illness, are particularly at risk of poor health from cold homes.

Warm houses and energy conservation act
In 2000, David Amess MP brought forward a Private Member’s Bill that, with all party
support, became the Warm Homes and Energy Conservation Act. This established a seemingly simple target: to eradicate fuel poverty by 2016 as far as reasonably practicable. The debate in Parliament at the time suggested that many thought this not only a good target but also a reasonable one.
    
At least in hindsight, while eradicating a long-standing social problem was an admirable ambition, it was never likely to be as straightforward as originally thought.
    
The Act characterises fuel poverty as the problem of someone on a ‘lower income
[living] in a home which cannot be kept warm at reasonable cost’.  These terms have never
been specifically defined. But the first UK fuel poverty strategy, adopted in 2001 as a statutory consequence of the Act, set out the way fuel poverty would be measured in practice. This was the 10 per cent indicator under which a household was fuel poor if it needed to spend more than 10per cent of its income (measured before housing costs) on energy in the home.
    
One key feature of this definition is that it rightly focused on energy requirements, rather  than actual energy spending. This is appropriate because in many low income households actual expenditure on energy falls short of what is needed to provide adequate lighting, heating and appliance use.
    
Of course, this approach requires an understanding of how much energy a household should use in order to achieve an adequate standard of warmth and so on.

The 10 per cent indicator was therefore underpinned by a methodology that allowed energy requirements to be modelled on the basis of dwelling characteristics (such as construction type and heating system type) and household characteristics (such as occupancy patterns and household size).

This methodology continues to exist today.

Fuel poverty strategies
Future governments will now, for the first time, be required by law to tackle fuel poverty by making the coldest, leakiest homes in England more energy efficient.
    
This new Fuel poverty strategy – the first for over a decade – outlines challenges and actions for the next 15 years to ensure future governments take the right steps to tackle fuel poverty and get help to those who need it most.
    
A new legally binding target, in force since December 2014, is at the heart of the new strategy. It requires a minimum standard of energy efficiency (Band C) for as many fuel poor homes as reasonably practicable by 2030.

Early measures to tackle the problem of fuel poverty and hit the new target include new regulations so that from April 2018 private landlords cannot rent out energy inefficient properties (homes with Energy Performance ratings below ‘E’).
    
Additionally, tackling the problem of fuel poverty in off gas grid properties with a new £25 million fund to help people install central heating systems for the first time. Plus, extending the successful ECO scheme to 2017, so that a further 500,000 properties will be made cheaper and easier to heat, building on the one million homes that ECO and the Green Deal have helped in the last 2 years.

The 10 per cent indicator
The 10 per cent indicator allowed fuel poverty to be measured at a national level. In 1996, in  England, there were some five million fuel poor homes. This had dropped to around one million (an 80 per cent fall) by 2003/04.
    
In the years to 2010, however, fuel poverty quickly rose again, reaching four million by 2009. During this time considerable investment was being made in the housing stock, through schemes such as Decent Homes and Warm Front, but their impact on fuel poverty appeared limited.
    
It became increasingly clear that the 10 per cent indicator was very sensitive to energy prices.

Indeed, high prices were bringing some people who were reasonably well-off but lived in large, inefficient homes into the fuel poverty statistics. There was a danger of both underplaying the effectiveness of support schemes and undermining good scheme design.

Local projects
The strategy prepares the ground for future new measures with a series of pilots focused on priority areas, ranging from health aspects of fuel poverty through to specific housing types like off gas grid properties and park homes.
    
A £3 million pot for such pilots will see £1 million released immediately to scale up local ‘warmth-on-prescription’ projects to help primary healthcare professionals such as GPs play a much larger part in tackling fuel poverty. In the coming months up to £2 million more will be released to support innovation pilots, not just in health but also for off gas grid, park homes and community energy approaches.
    
Unveiling the strategy, Energy and Climate Change Secretary Ed Davey said: “Today marks a crucial step towards a future free from cold homes and bloated energy bills in England. We now have a legally binding commitment to plug our draughtiest houses – adding to the 1 million homes we’ve made warmer and cheaper to heat.
    
“From tackling fuel poverty in the private rented sector to facing up properly to the challenges of rural off gas grid fuel poverty, this strategy marks a significant change from the old approach. Yet even as we implement new regulations and new spending priorities to make homes warmer, we are planning for the next phase of cutting fuel poverty, with a series of key pilots, especially into the link between improving health and cutting fuel poverty.
    
“Households in fuel poverty in the least energy efficient homes (Bands F and G) typically face energy costs that are £1,000 more than those in higher quality homes. To help focus support where it is needed most, the strategy introduces interim milestones to get as many as fuel poor homes as reasonably practicable up to a minimum energy efficiency rating of Band E by 2020 and Band D by 2025.”

Fuel poverty standards
Minister for Energy and Climate Change Amber Rudd said: “We want the fall in levels of fuel poverty seen under this Government to continue – so that cold homes are gone for good.
    
“That’s the future we’re presenting, alongside our ambitious targets, so even more households can join the one million homes already reaping the benefits of lower energy bills and warmer homes this winter.
    
Last month, the government laid draft regulations to introduce minimum energy efficiency standards that will see up to 1 million people renting from private landlords benefit from warmer and cheaper to heat homes. Many of the poorest tenants will benefit and, with government support, landlords can improve their properties at no upfront cost – and landlords will only have to make improvements that are cost‑effective. This will be backed by a new law to give tenants the right from April 2016 to request consent for improvements that the landlord cannot unreasonably refuse.
    
“Nearly 2 million heating and energy efficiency measures have already been installed across the country. With ECO being extended to 2017 an extra half a million people will be able to keep warm for less, including many low-income, vulnerable households. This is on top of half a billion pounds of investment in energy efficiency schemes over three years, including the Green Deal Home Improvement Fund.”
    
Turning point
Dr Tim Ballard, Vice-Chair of the Royal College of General Practitioners, said: “The Royal College of GPs welcomes this new fuel poverty strategy. It marks an important turning point in acting on what we have known for some time: that cold homes contribute to the most vulnerable people being unhealthy and can even be lethal for them.
    
“The new strategy provides a long-term framework in which the health sector has a vital role to play, in partnership with Government. The new funding for health-related pilot projects is especially needed and will help build the case for more investment to cut the cost of warmth and help reduce the burden of cold homes on the health service.”