New analysis shows the government will miss its target of ensuring fuel poor households are upgraded to an energy efficiency rating (EPC) of C by 2030.
The government set out its target for delivering energy efficiency measures in its 2015 Fuel Poverty Strategy. According to a report by think-tank the Institute for Public Policy Research (IPPR), failure to reform policies will see the government miss this energy target by at least 60 years.
Recent government figures show the 2.55 million households that live in fuel poverty in England face an average fuel poverty gap – the amount by which a fuel-poor household’s energy bills exceed reasonable costs each year – of £326. This gap is considerably larger for households which live in the most energy inefficient homes (with EPC of G) at £1,482.
IPPR is calling for fundamental reform of the government’s scheme to tackle fuel poverty as the analysis shows the pace of progress is too slow.
Based on the current rate of deployment of energy efficiency measures under the Energy Company Obligation (Eco) scheme, the government will not meet its target for upgrading fuel poor homes until 2091 at the earliest.
IPPR research fellow, Joshua Emden, said: “While we welcome recent government plans to focus 100 per cent of funds on fuel poor, low income and vulnerable households (the Affordable Warmth group), everyone knows that there will still be problems with reaching fuel poor consumers within this group.
“Until we fundamentally redesign Eco and properly fund local authorities to deliver it, it will always look like the ghost of an old energy policy rather than the truly social policy it must become.”
The research highlights that 20 per cent of fuel-poor households (500,000) are not covered by the scheme because they do not receive, or are unaware of their eligibility for benefits.
It is also estimated that just 30 per cent of the available funds are likely to be spent on fuel-poor consumers.
According to the report, the levies on energy bills which provide the funding for the scheme are highly regressive, meaning fuel-poor households spend a disproportionately larger share of their income on energy than affluent consumers. This issue is worse for rural consumers who, despite paying more than £70 million in bill levies over two years, only received energy efficiency measures worth £3.5 million.
The report calls for fundamental changes to the Eco scheme, which include:
- Focusing the policy solely on addressing fuel poverty rather than providing energy efficiency measures for a range of households.
- Funding the scheme through general taxation rather than as a levy on bills.
- A new area-based approach delivered by local authorities with particularly intensive engagement in hard-to-reach places, such as rural areas.
- A more rigorous approach to targeting fuel-poor consumers by forcing energy suppliers to share energy consumption data and billing information with local authorities to be matched with the data that they hold on the energy efficiency of housing stock and benefits data.
IPPR’s associate director for energy, climate, housing and infrastructure, Luke Murphy, said: “The Energy Company Obligation is not delivering for the fuel poor households it is designed to help. At its current rate of delivery, hundreds of thousands of fuel poor households will be left out in the cold until the end of the century.
“If the government is to meet its 2030 target then its approach to improving energy efficiency for those households in fuel poverty needs fundamental reform.
“Our report calls for a new scheme to be focused solely on fuel poor households and delivered by local authorities in a new area-based approach. Crucially this new scheme must be funded through general taxation, rather than as a levy on bills which is hugely regressive and hits those in fuel poverty the hardest.”