Conclusions and recommendations
1. Much of the public funding of £150
million for Warm Front annually does not help those most in need.
Currently only around a third of grants made under the Warm Front
Scheme help the fuel poor, and a third or more fuel poor households
are not eligible for Warm Front grants. Fuel poverty is a factor
of personal incomes, fuel prices and the energy efficiency of
homes. The Department uses certain passport benefits as an indicator
of income but these passport benefits do not provide a good match
in identifying the fuel poor. To improve the Scheme's effectiveness,
the Department should establish eligibility criteria which best
identify low income groups, for example those on means tested
benefits.
2. The Scheme needs to reach more of those
in fuel poverty where real needs exist, and practical help can
be given. The Department should consider
whether a proportion of current Scheme funding could be ring fenced
to a discretionary fund through which the most fuel poor could
be prioritised, assisted quickly and with sufficient measures
to make a real difference.
3. Benefit health checks, visits and local
networks such as doctors' surgeries and shops may provide a better
way of identifying those most in need of assistance and helping
them apply for a grant. The Department
is using these approaches in some areas and should extend them
if they prove effective in addressing fuel poverty, particularly
for those living in rural communities who may be harder to reach.
4. The Department currently has no eligibility
criteria reflecting the energy efficiency of the home.
It should concentrate on resources on homes with low energy efficiency
but which can be significantly improved to reduce occupiers' fuel
costs.
5. 8% of all grants have been for two energy
efficient light bulbs only, and 20% of all jobs have resulted
in light bulbs or draught proofing only.
£14 million was spent on providing light bulbs and draught
proofing to households in a sample year, though they have limited
impact on energy efficiency and hence fuel poverty. The Department
should reduce expenditure on measures which have limited impact
on fuel costs, and on homes which are already energy efficient,
and use the money saved to help those households most in need.
6. Some Scheme rules result in poor value
for money by requiring installation of more expensive and less
efficient options for some claimants than alternative solutions
available. The current Scheme rules require
like for like replacement of central heating systems and boilers
even when an alternative would be cheaper and more effective for
the household. Nor can inefficient systems be replaced and repaired
unless they are broken at the time of the Warm Front survey, even
though the defective equipment may be condemned later. The Department
should remove the requirement for like for like replacements,
and create more flexibility within the Scheme rules to provide
assistance where systems are in a poor and potentially dangerous
condition but still operate.
7. The Scheme offers few practical options
for hard to treat homes such as those off the gas network or with
solid walls. And in some hard to treat
homes, the current grant maxima do not cover feasible but more
expensive options. The Department should undertake research to
develop new solutions for hard to treat homes, and the Scheme
rules should recognise that some potential claimants in such homes
may need additional financial assistance, perhaps through a discretionary
fund. Scheme Managers should be set objectives to increase assistance
in this sector.
8. Delays in installing measures under the
Warm Front Scheme continue to occur with over 50% of all jobs
exceeding target times. These delays may
partly reflect a shortage of suitably qualified engineers. But
the Department should also work with Scheme Managers and suppliers
to prioritise those cases most likely to benefit, for example
homes where the agreed measures will significantly improve home
energy efficiency with a resultant reduction in fuel costs (or
provide better comfort at the same or similar cost).
9. The Department's Public Service Agreement
target measures success in terms of the numbers of households
assisted regardless of whether the assistance has had any significant
impact on energy efficiency and on the occupier's fuel costs.
The Department and the Treasury should revise the target to better
measure the impact of the Scheme in reducing fuel poverty and
on the fuel efficiency of the homes assisted. The Department's
targets for Scheme Managers should similarly provide greater incentive
to Scheme Managers to identify and help those most in need.
10. The Department should also seek to assess
the wider impact of the Warm Front Scheme by researching whether
the Scheme is moving people out of fuel poverty.
Such an exercise should inform the planned scheme redesign in
2005, and in particular identify whether the Scheme will contribute
fully to achieving the aim of eliminating fuel poverty in vulnerable
groups by 2010.
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