Memorandum by NEA (AFH 16)
1. INTRODUCTION
1.1 NEA is a national charity working to
ensure that low-income households have access to sufficient warmth
for health and comfort at an affordable cost. NEA develops and
promotes energy efficiency services to tackle the heating and
insulation problems of low-income families and individuals. Working
in partnership with central and local government; with fuel utilities,
housing providers and health agencies; and with consumer groups
and voluntary organisations, NEA aims to eradicate fuel poverty
and campaigns for greater investment in energy efficiency to help
those who are disadvantaged and vulnerable.
1.2 NEA welcomes the opportunity to comment
on the issue of affordable housing with particular reference to
fuel poverty. Given NEA's specialised interest in the fuel poverty/affordable
warmth-related element of this subject, comments will generally
be confined to areas relevant to this.
2. SUMMARY
2.1 Decent accommodation at an affordable
cost should be a universal entitlement. Energy efficiency is crucial
to the issue of affordability since disproportionately high fuel
costs will reduce the ability to meet housing costs and vice versa.
The formula for assessing fuel poverty is complex and potentially
intrusive in that it requires personal household income data.
However, replacing the existing formula for calculating fuel poverty
with energy efficiency standards is only acceptable where these
standards are sufficiently high to imply affordable warmth. Failure
to ensure adequate energy efficiency standards will result in
extensive hidden fuel poverty. This will mean the Government's
failure to comply with its undertaking to eliminate fuel poverty
in social housing by 2010.
3. THE DEFINITION
OF AFFORDABLE
HOUSING
3.1 In terms of simple affordability this
is clearly dependent on two factors:
However, within this simple formula there are
several complications. As would be expected, absolute housing
costs are considerably higher in London than elsewhere although
these additional costs are somewhat mitigated by higher household
income.
REGIONAL DISPARITY IN HOUSING COSTS 1997-2000[14]
| Region | Average weekly household income (£)
| Per cent of expenditure on housing costs
| Housing costs (£ per week) |
Mortgage costs (£ per week) | Rent charges (£ per week) Private sector
| Rent charges (£ per week) Public sector
| Rent charges (£ per week) Registered Social Landlords
|
| North East | 363 | 15%
| 43.50 | 43 | 56
| 36.80 | 44.50 |
| North West | 421 | 15%
| 49.00 | 46 | 75
| 40.60 | 45.50 |
Yorkshire and
the Humber
401
| | 15% | 48.70
| 45 | 68 | 35.10
| 48.10 |
East Midlands
439
|
| 15% | 51.50 | 45
| 62 | 38.10 | 48.40
|
West Midlands
445
|
| 15% | 50.30 | 50
| 70 | 39.80 | 47.60
|
| East | 484 | 16%
| 57.60 | 60 | 80
| 45.60 | 54.10 |
| London | 571 | 18%
| 74.50 | 82 | 141
| 58.00 | 61.40 |
| South East | 538 | 17%
| 67.70 | 72 | 99
| 50.30 | 59.90 |
| South West | 427 | 16%
| 54.80 | 54 | 78
| 43.80 | 52.20 |
| England | 469 | 16%
| 57.50 | 58 | 90
| 53.10 | 53.10 |
| | |
| | | |
|
3.2 Clearly an index of affordability would mean determining
a theoretical ceiling for housing costs (expressed as a percentage
of net household income) beyond which expenditure was deemed to
be unaffordable. This, after all, is the basis for the formula
used by Government and campaigning organisations in defining and
quantifying fuel poverty. Where 10 per cent or more of income
is required to be spent on fuel to meet the energy needs of a
household, the household is considered to be in fuel poverty.
3.3 However, as is shown in the table above, housing
costs are much more complex than energy costs. Whilst energy expenditure
does vary across socio-economic classes and regions this variation
is much lower in money terms than is the case with housing costs.
Whereas disproportionately high spend on fuel is a consequence
of low income, poor heating and insulation standards and (sometimes)
high energy costs, housing expenditure is much more sensitive
to market forces reflecting both regional supply and demand and
the preferences and aspirations of home buyers and tenants.
3.4 Nevertheless, on average, residual income is higher
in the area of highest housing costs (London) and lower in the
area of lowest household income (North East) and this circumstance
remains constant across all regions. Yet these averages conceal
the real nature of the problem. Whilst, in general, there would
appear to be a reasonable match between income and housing costs
this is certainly not true at lower levels of earnings. Some indication
of the particular difficulties facing low-income households can
be seen in the varying levels of housing subsidies required by
tenants in different regions.
AVERAGE WEEKLY HOUSING BENEFIT—BY REGION AND TENURE
(£ PER WEEK—2001) [15]
| Local authority
(£)
| Registered social landlord (£)
| Private rented sector
(£)
|
| North East | 37.30 | 47.40
| 65.30 |
| North West | 42.00 | 51.90
| 57.10 |
| Yorkshire and Humberside | 37.20
| 57.10 | 53.40 |
| East Midlands | 39.80 | 52.70
| 51.90 |
| West Midlands | 41.60 | 50.70
| 59.90 |
| East | 45.40 | 58.30
| 63.90 |
| London | 62.10 | 76.30
| 98.70 |
| South East | 49.30 | 61.10
| 73.70 |
| South West | 43.00 | 53.90
| 61.50 |
| England | 45.50 | 58.60
| 66.60 |
| | |
|
3.5 The table indicates that the most affordable housing
is to be found in the social rented sector generally and, within
that sector, in properties rented from the local authority. With
regard to fuel poverty this tendency compounds the problem for
private sector tenants—not only are they liable to higher
housing costs, they generally experience considerably worse housing
conditions.
ENERGY EFFICIENCY STANDARDS—BY TENURE AND PER CENT
OF HOUSEHOLDS[16]
| Tenure | Mean
SAP
| >20 | 20-30
| 30-40 | 40-50 |
50-60 | 60+ | All
households
(000s)
|
| Owner occupier | 44.6 | 6.1
| 6.9 | 17.6 | 31.3
| 23.1 | 15.0 | 13,581
|
| Private tenants | 35.7 | 20.6
| 10.3 | 20.1 | 24.0
| 13.8 | 11.3 | 1,817
|
| Council tenants | 43.9 | 7.6
| 9.8 | 19.7 | 25.8
| 19.5 | 17.5 | 3,340
|
| RSL tenants | 47.4 | 6.8
| 6.8 | 14.3 | 23.4
| 25.5 | 23.2 | 905
|
| All tenures | 43.8 | 7.7
| 7.7 | 18.0 | 29.4
| 21.8 | 15.5 | 19,643
|
| | |
| | | |
| |
3.6 Since there is a clear relationship between energy
efficiency standards and affordable warmth, it is apparent that
private sector tenants are further disadvantaged in that their
energy costs will be disproportionately high. This assumption
is borne out to some extent by further scrutiny of the proportion
of households in fuel poverty. Although housing association tenants
are more likely to be in fuel poverty this is presumably a consequence
of their lower average household income and greater homogeneity
in this sector. In contrast, the private rented sector is highly
polarised: at one extreme being the dilapidated properties comprising
pre-1919 houses; at the other is that element of the housing stock
consisting of houses in good condition and purpose-built flats.
FUEL-POOR HOUSEHOLDS BY TENURE (NUMBERS IN 000s AND PER
CENT OF HOUSEHOLDS) [17]
| Per cent | 000s
| All
households |
| Owner occupied | 14.8 | 2,058
| 13,908 |
| Local authority | 39.2 |
1,293 | 3,299 |
| Private rented | 38.4 | 691
| 1,799 |
| Registered social landlord | 42.4
| 418 | 985 |
| | |
|
4. THE FITNESS
STANDARD
4.1 The existing Fitness Standard is defined in the Local
Government and Housing Act 1989 and covers dwellings deemed not
fit for human habitation as a consequence of failing to meet one
or more of a range of criteria including:
— It is free from disrepair.
— It is free from dampness prejudicial to the health
of occupants.
— It has adequate provision for lighting, heating
and ventilation.
The English House Condition Survey 1996 indicated
that just over 1.5 million dwellings were unfit. The overwhelming
majority of unfit dwellings are in the owner-occupied sector as
would be expected given the preponderance of this tenure group
in the housing stock.
| Household tenure | Number
unfit
| Per cent
unfit | All
households
|
| Owner occupied | 732,000 |
5.4 | 13,560,000 |
| Private rented | 331,000 |
18.5 | 1,788,000 |
| Local authority | 227,000 |
6.8 | 3,333,000 |
| Registered Social Landlord | 34,000
| 3.8 | 898,000 |
| | |
|
However, as indicated in the table above, in percentage terms
the private rented sector is by far the worst tenure group. Perhaps
most surprising of all is the large number of public sector dwellings
that failed to comply with the Fitness Standard.
5. THE HOUSING
HEALTH AND
SAFETY RATING
SYSTEM
5.1 It is proposed that the current Fitness Standard
be replaced by a Housing Health and Safety Rating System. In monitoring
compliance with the new standard, local authorities will take
account of the potential adverse health consequences of cold,
damp and energy-inefficient dwellings in determining whether to
use enforcement powers to remedy failings.
5.2 NEA was supportive of this proposal in principle
but was concerned that:
— The recommended energy efficiency standards would
be inadequate to achieve what ought to be a priority objective
of removing the occupant(s) from fuel poverty.
— Energy efficiency improvements could not be considered
in isolation since, in many cases, more general repair work would
be needed to tender energy efficiency measures effective.
— Without financial assistance property owners might
be unable or unwilling to fund improvement works.
— Robust enforcement systems would be required to
overcome lack of co-operation on the part of private sector landlords
and to address those circumstances where tenants did not feel
secure in bringing their landlord's failing to the attention of
the authorities.
— Proposals as framed indicated that the vulnerability
of the occupant(s) would be a factor in deciding whether poor
housing standards posed a health and safety threat. NEA's view
was that the condition of the property should be the main consideration
regardless of the characteristics of those living in it.
6. THE DECENCY
STANDARD FOR
SOCIAL HOUSING
6.1 A core element of the Government's strategy to eradicate
fuel poverty within a 15 year timescale is the commitment that
all social-rented properties should meet a "decency standard"
by 2010. The initial consultation paper[18]
proposed that, in order to meet decency criteria, a property should:
— be above the current statutory minimum standard
for housing;
— be in a reasonable state of repair;
— possess reasonably modern facilities and services;
and
— provide a reasonable degree of thermal comfort.
6.2 This last element, which is of most relevance to
NEA, is the most contentious. The Department for Transport, Local
Government and the Regions suggested that the thermal comfort
criteria could be used as a proxy for affordable warmth. This
would mean that the existing formula used to identify fuel poverty
would no longer be applicable to social housing.
6.3 NEA's response to the consultation paper expressed
qualified support for this proposal. The existing formula for
assessing fuel poverty required information about household income
and energy costs that would not necessarily be held by social
landlords, and the proxy concept seemed a pragmatic solution to
these difficulties.
Unfortunately the Department's proposed standards were totally
unacceptable as a guarantee of affordable warmth.
7. INSULATION STANDARDS
7.1 Effective insulation is defined in the document as
the presence of cavity wall insulation, if appropriate, and/or
at least 50 mm loft insulation where there is an accessible loft.
There is no discussion of improvement potential for properties
that lack one or other of these building characteristics. This
is despite the fact that some 20 per cent of local authority properties
have no cavity to fill and that 35 per cent of dwellings in this
tenure group have no loft or no access to the loft.
7.2 With regard to proposed levels of insulation, NEA
was extremely disappointed and concerned about what was suggested
as adequate loft insulation. The document indicated that 50 mm
of loft insulation should be considered "effective";
this despite the fact that, since 1992, the Home Energy Efficiency
Scheme has allowed top-up grants where 50 mm of loft insulation
was present. The re-branded Home Energy Efficiency Scheme, Warm
Front, allows for 200 mm of loft insulation material to be
installed—an indication of what is currently recommended
and acceptable. In fairness it should be noted that insulation
standards for electrically heated properties are considerably
higher but since many of these properties will have neither loft
spaces nor cavity walls the concession is largely academic.
8. HEATING STANDARDS
8.1 The consultation document contained little detail
of what would constitute efficient heating. The implication seems
to be that a gas or oil-fired central heating system of virtually
any form or age will be deemed satisfactory. The Energy Report
of the English House Condition Survey 1996 indicated that whilst
78 per cent of all households had central heating provision, 3.5
million systems (23 per cent) were between 13 and 19 years old
and four million (26.4 per cent) were 20 years old or more. It
cannot therefore be assumed that the 25 per cent of tenants of
local authority tenants and 35 per cent of tenants of Registered
Social Landlords without central heating represent the full extent
of the problem.
8.2 NEA has proposed that a reliable and objective indicator
such as the SAP rating should be used to determine which properties
meet an acceptable energy efficiency standard, and that the DTLR
should seek to establish a SAP rating of 70 across this element
of the housing stock. It may be necessary to accept, in the short
term, a lower standard in older properties or those of unconventional
construction.
| Advantages of proposals | Disadvantages of proposals
|
| Simplifies identification of eligible households
| Cannot identify worst cases for priority assistance
|
| Guarantees practical improvements | Proposed standards are inadequate
|
| Facilitates coherent work programmes | Ends the holistic approach to fuel poverty by excluding prices and income data
|
| Eliminates variables of income/prices | Hypothetical energy efficiency does not ensure affordable warmth
|
| Has potential to adopt best practice criteria
| Conflicts with the definition of fuel poverty adopted by the UK Fuel Poverty Strategy
|
| Establishes benchmark for other tenure groups including the private rented sector
| Will not ensure compliance with requirements of the proposed Housing, Health and Safety Rating System
|
| |
14
Regional Trends 2001. Back
15
House of Commons Hansard, 13 February 2002, Col 508. Back
16
Energy House Condition Survey 1996: Energy Report. Back
17
Fuel poverty in England in 1998, DTI and DEFRA, 2001. Back
18
Change to the Decent Home Definition-Consultation, DTLR 2001. Back
| 
