Targets for upgrading the energy efficiency of fuel poor homes will be missed this year, in 2025 and 2030 because available funds have not been effectively targeted, an expert committee has concluded.
The assessment is included in the Fuel Poverty Commission’s latest annual report. It calculates that 120,000 fuel poor households will still not have reached the threshold of Band E by the end of this year. It adds that without additional funding and new programmes, the 2025 target of a minimum rating of Band D energy efficiency by 2025 and Band C by 2030 will also be missed.
The committee says previous governments have not directed available funds to tackle the issue and also blames the watering down of regulations requiring the upgrade of privately rented homes, as well as limited pressure on landlords from councils.
It calls on the department for business, energy and industrial strategy (BEIS) to develop a cost estimate for delivering the Fuel Poverty Strategy, which was set out in 2015, along with a series of programmes to deliver the 2030 energy efficiency target. It also wants the deadline to be enshrined within the government’s net-zero commitment.
As a first step, the committee urges the government to amend the Warm Home Discount scheme to be more focused on providing automatic energy bill discounts to fuel poor households.
It also calls for funds to be announced in the Comprehensive Spending Review “or earlier” for the £2.5 billion Home Upgrade Grant which is part of the £9.3 billion new public funding trailed in the Queen’s Speech for energy efficiency. It adds that this would feed into the economic recovery by creating new jobs and giving a boost to regional economies.
It says that a home energy efficiency programme should be introduced from 2022 to 2028, as a successor to the Energy Company Obligation, which should focus on owner-occupied fuel poor homes. At the same time the minimum standards for landlords should be tightened and a £3.8 billion Social Housing Decarbonisation Fund (another plank of the £9.3 billion pledge) approved to commit to improve the energy efficiency levels of social housing to a minimum of Band C by 2030.
The committee stresses that the government needs to move away from using welfare benefits as a proxy for fuel poor households. Instead it urges BEIS to accelerate its work to produce a new machine learning tool to better identify those most in need.
If the government were to implement the committee’s recommendations, it would leave a £7 billion funding gap. The committee recommends this could be filled by switching existing budgets, including refocussing Winter Fuel Payments (WFP) on those who need it most. Acknowledging the political sensitivity of such an approach, the committee suggest as an alternative making WFP a taxable benefit and using the proceeds to fund energy efficiency measures in fuel poor homes.
Finally, the report says that the Covid-19 pandemic makes it even more vital that fuel poverty is viewed in health and social context, pointing to the estimated 30,000 excess winter deaths per annum linked to inadequate housing.
Hidden fuel poor
Meanwhile, a BEIS report published last week and based on the latest data available – from 2018 – points to the difficulties in identifying fuel poor households.
The number is officially recognised as 2.4 million (equivalent to 10.3 per cent of the country).
However, BEIS identified that 80 per cent of those who told the English Housing Survey that they could not comfortably heat their homes were not covered by the definition of fuel poverty, equating to 1.6 million. Furthermore, 78 per cent of those who found it difficult to meet their fuel costs (2.13 million) were also not technically fuel poor.
The report points to the clear evidence that household income is the key driver in the inability to heat homes. However, it says there is “less evidence that high fuel costs are causing households to struggle”. This is seen in those saying they cannot heat their home and find it difficult to meet their fuel costs despite having below average fuel costs.