The government has been urged to target energy bill subsidies for low income and pensioner customers much more tightly on fuel poor households by its own statutory adviser.
The latest annual report of the Committee on Fuel Poverty, which was published yesterday (7 November), says overall progress on tackling the problem is “stalling”.
And it says there is mixed performance on the three main measures to track progress on the government’s fuel poverty strategy for England, which the committee was set up to monitor and advise on.
Despite rising energy bills, the aggregate fuel poverty gap has reduced by 7 per cent over the past four years while the average mismatch for individual households has fallen to £326 per year, it said.
But the report says that since the government introduced its strategy in 2014/15, the total number of households has increased by 210,000 to 2.55 million.
And with the Department for Business, Energy and Industrial Strategy forecasting a drop in progress on tackling the energy efficiency of fuel poor homes, the committee estimates £17.1 billion of funding will be needed to complete the strategy compared to £15.4 billion in its 2017 annual report.
Longer-term plans for household energy efficiency set out in the Clean Growth Strategy could provide up £6.1 billion of funding, the committee estimates.
But these longer-term plans are counterbalanced by the additional £2.8 billion which the committee says the Treasury must supply to meet the strategy’s milestone that as many fuel poor homes as possible should reach energy performance certificate band E and D by 2020 and 2025 respectively.
This should include the allocation by the Treasury of £1 billion to a new “clean growth challenge fund”, running from 2019 to 2021, to help meet the 2020 band E milestone.
The committee recommends that the funding shortfall could also be plugged by better targeting of the winter fuel payment (WFP) and Warm Home Discount schemes that help pensioner and other low-income households with their fuel bills.
According to research the committee carried out with the Committee on Climate Change, fuel poor households only receive around 10 per cent of the £2.1 billion disbursed under the two schemes.
Tightening the eligibility criteria for these payments could free up £800 million per year for new programmes to install energy efficiency measures in the homes of the fuel poor, says the committee.
“Eligibility requirements for the WFP need to be back on the table with the need for cross party support on this critical issue.”
In the longer term, the committee recommends that the £3,500 cap on the amount landlords are expected to pay on energy efficiency improvements, announced earlier this week, is reviewed and increased.
And social landlords should be set new targets to increase their homes’ energy efficiency levels to band C by 2030.