Examination of witnesses (Questions 40
- 59)
MONDAY 9 MARCH 1998
SIR JOHN
BOURN, KCB,
MR ANDREW
TURNBULL, CB,
CVO, MR
BRUCE SHARPE,
MR JOHN
CLOUGH, MBE
and MR FRANK
MARTIN
40. I understand.
(Mr Turnbull) In the social housing sector there
is a lot of the referrals work in partnership with local authorities.
They help advertise the scheme, they refer people to it and also
they readily give their permission for the work to be done. All
that is missing in the private rented sector which is why it is
a more difficult area to crack.
41. The reason I ask that is that it is
clear that the installers are paid on the basis of the numbers
that they do, keeping up with the targets that have been given,
who have an incentive to take whoever is eligible for the scheme
and do not attempt to target. I would imagine Eaga in their publicity
have not as yet tried to target specific groups. I wonder, recognising
that the majority of the group that was taking up this scheme
was in social housing, why greater efforts have not been made
through the installers and Eaga to try to target your publicity
on the groups that you clearly feel you have been missing?
(Mr Turnbull) The one answer to that is that the
scheme has been cash limited. It is dealing with about 400,000
homes a year. We know the stock of eligible people is several
times that. It has not been necessary to go looking very hard
in the most difficult areas. This is not to say that people are
then installing this in homes where in a sense we regret the work
is done. We are getting the energy efficiency, people are getting
the comfort but there is clearly a feeling that some people who
could benefit from this are missing out.
42. Can I just ask Eaga whether they have
made any attempts to target this group?
(Mr Clough) Yes, we have. Just some background
information at first. In 1993 there was an independent research
assessment done by the Building Research Establishment which was
repeated again in 1996 and that found as a benchmark, for example,
that 85 per cent of those benefiting from measures at that point
in time were from social classes D and E. Also it found that the
average income for work done under HEES, that the clients were
on about £4,790 and that compared with the UK average of
over £11,000. That gave us some surety that we were actually
meeting the needs of those in poverty. In terms of our publicity,
whilst HEES was always structured to be, if you like, spreading
the jam very thinly but giving basic measures to all those who
were eligible, clearly in terms of publicity and marketing of
the scheme it was important to ensure that the information was
available to those in greatest need. An example of that would
be the work that we did with the Benefits Agency and continue
to do with the Benefits Agency in contacting those people on Fuel
Direct, the direct payments mechanism.
43. I understand that and we are focussing
on the economic condition of the people concerned. Can I ask you
a very quick question. In the English Housing Condition Survey,
does that show that people living in social housing in housing
terms are a good deal better off than people living in the private
sector? I would suspect that it does.
(Mr Turnbull) In terms of the energy efficiency
of the house they are better. I do not know whether it says about
their incomes.
44. So in housing condition terms you are
actually missing the people who need this service the most because
the people who are living in local authority housing, although
I accept that they are poor and in social categories D and E,
as are people in the private rented sector, in housing terms are
significantly better housed than those living in the private sector.
Those living in the private sector, therefore, ergo would gain
greater benefit from having this scheme.
(Mr Clough) They would indeed and that is an area
that we have attempted to target. There are some very good lessons
to be learned again if we use the regional electricity companies
as an example. They carried out a number of pilots in Enfield
and Haringey in the private rented sector and the take-up was
abysmally low despite all efforts being made. Primarily the problem
is with regard to absentee landlords. Landlords may have many
other agendas for not wishing to improve the housing conditions
of their tenants. It is fair to say that we are not short of interest
from clients but the barriers to those clients to take up the
benefits, ie landlord's permission which is required, can be an
overwhelming barrier to them.
45. Can I just go back to Mr Turnbull. Can
we just be reassured— I accept that there are barriers,
I accept that the private rented sector may be much more difficult
in that sense to break into—that some effort is going into
research into how that can be done.
(Mr Turnbull) That is one of the important elements
of the review that is taking place.
46. Can I move on to the issue of ranking
touched on by the Chairman earlier where you are now, since 1997,
ranking the different measures. He asked you a question about
why it is that there is still pretty much the same spread of choice
made by the people even though the ranking is now taking place.
You said that you would expect over time for that to shift. Can
you just tell us is there any evidence—I know it is still
early days—that shift is beginning to take place?
(Mr Turnbull) It is. I quoted the figures for
cavity wall insulation by spend. It is now up to nearly a quarter
of the scheme.
47. Cavity wall insulation did not exist
before July 1997 as a choice.
(Mr Turnbull) No, it was not one of the options.
48. In terms of those taking draught measures,
the figures we have in the report are 73/72, it has not moved
very much. I am not suggesting that there ought not to be an element
of choice within it but I wonder whether you have any measures
you would suggest that would be able to bring home to those who
will exercise that choice those measures that will be more heat
efficient for them?
(Mr Turnbull) Well, one of the issues that I think
we need to revisit is whether we should put people in the position
of having to choose between draught proofing with its immediate
comfort benefits and loft insulation. Under the previous version
of the scheme you could get both. Under the new version of the
scheme a conscious decision was taken, and it was quite explicit,
to maximise the number of homes treated rather than treat a smaller
number of homes to a higher standard. You can have a situation,
which is something we need to look at again, where installers
go into a home and they do draught insulation and they leave the
home and there is still no loft insulation. We have got to ask
ourselves whether that is sensible as a way of prioritising the
measures. That is one of the issues that we will revisit.
49. Can I just ask in that regard, as far
as the installers are concerned, if they happen to prefer doing
cavity wall insulation to doing loft insulation what incentive
is there to ensure that the correct heat efficient measures are
carried out rather than what suits the installer?
(Mr Turnbull) The first thing is that they get
about £280 for doing cavity wall insulation and only about
half of that for draught proofing. We hope that by taking tenders
for both kinds of work there is not a bigger margin on one than
on the other.
50. Can I just ask Eaga what you are doing
to bring home to people the different energy efficiency values
of the choices that they have?
(Mr Clough) We feel quite strongly that the best
way to communicate this to often vulnerable clients, elderly clients,
is to do that face to face. Quite often energy advice is presented
at the survey stage where someone enters the house as an installer
and does a professional assessment of how they could best benefit
from what the scheme can offer. To supplement that Eaga is now
reviewing a lot of the information and advice sheets which we
produce for installers which they can then photocopy and leave
as appropriate with the clients which advises them on the specific
benefits from all of the measures and others in terms of condensation
reduction and such like. They can be left with the client but
we feel quite strongly that the best way to do that is to advise
them face to face because it means so much more to them.
51. Thank you. Now my final question in
this regard. This is going back to the issue of price versus quality.
You indicated that the reason why you had not emphasised the price
that the installers could set for the different types of work
being your interest in ensuring quality, yet is there not a much
larger role for price? Are there not mechanisms you could develop
that would ensure an element of competition on price for installers
in the same area?
(Mr Turnbull) That was the shift that was made
in the 1996 review. We had brought in a greater element of price
because by then we felt more confident that we had got quality
established. The issue here is should we be taking this on still
further, that is what the report recommends and what we are saying
is that we will work with the recommendation. We will try to develop
that further.
52. You have not convinced me by that answer
that is something that you see as bring a priority, a way forward,
that you can still maintain the quality. After all, according
to the report the quality is very high.
(Mr Turnbull) Yes.
53. I do not know what it is, 99 per cent.
(Mr Turnbull) The quality for this kind of work
is astonishing.
54. The issue is that there are large variations
in price even within the same area and, therefore, do you not
think that the priority now should be in terms of price rather
than worrying about the quality which is already very high?
(Mr Turnbull) In the tenders received under the
new scheme the variations have contracted quite considerably.
This is definitely the direction in which we want to move.
Mr Clifton-Brown
55. Good afternoon. Has the scheme been
a success, Mr Turnbull?
(Mr Turnbull) I think it has been a success in
a number of senses. It has greatly increased the take up of measures,
it gets very high satisfaction ratings from the people who have
benefited from it and it has made a significant contribution to
Government's energy global warming policy. I think if continued
at this level it will be a significant part of achieving the reduction
in CO2 that we are seeking.
56. If that is the case why in page 23,
paragraph 2.8, have only 26 per cent of those people on benefits
and 11 per cent of the eligible over 60s taken up the scheme since
it has been in operation since 1991?
(Mr Turnbull) We have not provided more money
for them to do it. The scheme has been cash limited. It has always
been a scheme where if we had made more money available we could
have almost certainly found a larger number of homes to do. There
is always a degree of excess demand which is why we have not had
huge campaigns. During 1996/97 we had rather an embarrassing over-subscription.
57. So we are rationing on price. Could
the qualitative measurements be improved still further? It does
seem to me a sap measurement improvement of only five points on
each scheme is a fairly undemanding target, could it not be improved
still further?
(Mr Turnbull) I am told SAP is a logarithmic scale
so it is actually bigger than you think. For an existing home—I
am not an expert in this—I am told five percentage points
is a significant improvement and will deliver savings of at least
a pound a week, probably more. Just putting it in context, a really
poor home will have a SAP rating of 15 to 30[2],
the current building regulations would have homes built at about
60 but we are trying to ratchet that up further.
58. Can I take you to figure 22 and the
top right-hand figure for loft insulation which the electricities
typically can get done for a cost of £181 per application
whereas the average cost of loft insulation—this is paragraph
3.44—increased by 40 per cent last year and now stands at
£283. I appreciate there was a change in specification there.
(Mr Turnbull) Yes.
59. It does seem a difference of £100
per application on loft insulation compared to what the electricities
could get these applications done for seems an awfully big difference
between the electricity companies and HEES.
(Mr Turnbull) There were two changes made. One
was an increase in the specifications from 150 millimetres to
200 millimetres and, secondly, a change in the way the pricing
was done. Instead of simply saying "Here is a price with
an upper limit on it for a loft of a certain size", Eaga
sought a tender on the basis of a square metre of insulation up
to a larger grant maximum. The effect of that was to bring in
a number of larger properties which otherwise would not have been
done within the maximum grant. On the question of the electricity
companies, I think the answer is on the basis that we are not
sure these are very comparable figures.
2 Note: The figure should, in fact, be 20. Back
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