Examination of Witnesses (Questions 100-119)
Wednesday 22 October 2003
Sir Brian Bender, Mr Jeremy Eppel; Mr Chris Leek,Mr
Garry Worthington, Warm Front, General Manager, POWERGEN UK, examined.
Q100 Mr Davidson: So if the two areas
where Eaga underspent presumably and actually met their targets
and the north-east and north-west spent as they did, then what
would have happened? Would you have just run out of money?
Mr Eppel: The scheme managers
would have readjusted the amount they were spending in the other
areas. Yes, indeed, they would not have been able to spend more
than the resources available in a given year because clearly that
would not have been possible, but they would have had to balance
it more between the different areas.
Q101 Mr Davidson: So are you satisfied
that in all of these areas that you were spending virtually as
much as was available and, in fact, you had money left over, or
did you just manage magically exactly to spend everything that
was there with no surplus and no deficit?
Mr Leek: One of the requirements
of us is to spend all of the money that is available to the scheme
between 1 April and 31 March. We turn on and turn off the marketing
and try and adjust the amount of referrals that we get in to match
that, so that what we do is by 31 March we spend every penny.
Q102 Mr Davidson: Can you tell me
why your estimates for those two areas were so under and the other
one was so over? I would use the term "wrong" and you
would use the term "not correct". Is there a methodological
reason why there was such a wide variation?
Mr Leek: As I tried to explain
to Mr Cruddas, without trying to go through it in a lot of detail,
looking at the research that we have done of what the eligibility
is of people within each of the north and the south—
Q103 Mr Davidson: I am just trying
to clarify whether or not there were any lessons here for us for
other issues. Is there anything here in particular where you would
now say you realise why you under-estimated one or you over-estimated
another? Is it because of the greater propensity of claims or
people are less fuel poor than you thought they were, or something
else?
Mr Leek: I think there is a greater
acceptance of the grant scheme within the north than there tends
to be in the south. It is much easier through word of mouth in
the north to get clients to refer. That is one reason why we do
over-subscribe in the north.
Q104 Mr Davidson: There is a greater
willingness to take up these schemes in the north and you under-estimated
that. Is that a fair way of putting it?
Mr Leek: I think the original
targets that were set in the year 2000 could have been better,
yes.
Sir Brian Bender: It was underestimated.
Q105 Mr Davidson: I give up. Could
I just turn to the question of rural areas where we are being
told in paragraph 2.23 that they are under-represented in the
number of grants being allocated. I can understand how it is easier
to hit urban targets, and obviously in these circumstances there
is a great tendency if there are targets to meet the numbers simply
by going for the easy ones, but can you clarify for me whether
or not effectively that is what has happened?
Sir Brian Bender: Again, Mr Leek
may want to add what Eaga are doing. There has been a specific
effort with marketing road shows, working with local authorities,
libraries, care trusts and others to target rural areas, but at
present around 11 or 12% of the households assisted are in rural
areas. We have got the charity, National Energy Action, looking
at what are the barriers to take-up of Warm Front in rural areas
and ways of tackling the problem. There has not been an effective
enough hit rate in the rural areas.
Q106 Mr Davidson: How long have you
had this reduced representation in rural areas? Is this a new
problem that you have only just discovered?
Mr Eppel: I think the data has
been coming through recently. This scheme has not been going that
long so we would not have expected to have had a clear assessment
of any problems in rural areas for very long.
Q107 Mr Davidson: Okay. This scheme
has been going for a relatively short time. Can you remind me
how long the previous scheme went on?
Mr Eppel: The previous scheme
began in 1991.
Q108 Mr Davidson: That was a fair
amount of time. That was able to be used in rural areas as well?
Mr Eppel: Yes.
Q109 Mr Davidson: Did you have difficulty
with take-up in the rural areas under the previous scheme?
Mr Leek: One of the differences
that you will notice between the previous scheme and this scheme
is that the scheme managers are now responsible for the marketing.
The reason for that was following an NAO Report on the previous
scheme which was suggesting that those who were marketing the
previous scheme, who were the installers, were going for the easy
targets and, therefore, by giving the marketing responsibility
to the scheme managers and setting them targets it was hoped that
could be overcome.
Q110 Mr Davidson: That was a yes
then?
Mr Leek: Yes.
Q111 Mr Davidson: If you previously
had a difficulty with marketing to the rural areas then surely
the defence that this new scheme is a new scheme should not really
hold water because you ought to have anticipated that you were
going to have a problem marketing it to rural areas and, therefore,
we ought not to be reading that you still have under-representation
in the rural areas. Surely you ought to have learned from the
experience of the previous scheme. Surely if you have a new scheme
you do not just start from scratch with an entirely blank sheet
of paper and disregard any evidence you have from the past about
whether or not it is geographical in terms of north/south or rural/urban.
Surely you ought to be identifying that there are still rural
take-up difficulties.
Sir Brian Bender: The first issue
under the old scheme, as I understand it, was whether or not the
scheme managers were picking the easy fruit and, therefore, if
they were responsible for the marketing, that was a first attempt
to see whether we could tackle the rural problem that way. We
have now got data showing it is not good enough and we are trying
to tackle it further. I do not really accept that this is something
that was blindingly obvious 12 years ago.
Q112 Mr Davidson: I am not saying
that it was blindingly obvious 12 years ago. Are you saying that
you only noticed that there was a low take-up in the rural areas
just prior to the start of this new scheme?
Mr Leek: There was a criticism
in the last NAO Report under the old scheme that the take-up in
the rural areas was very poor. That is why the scheme managers
got the marketing. There has been a significant improvement in
that and we are still working towards improving it further. There
has been a significant improvement in the number of homes reached
in rural areas over what was in the previous scheme.
Q113 Mr Davidson: If one of your
targets is the number of properties that you are dealing with,
could you clarify for me how many properties only received light
bulbs.
Mr Eppel: I think that is in the
Report.
Q114 Mr Davidson: Can you just tell
me?
Mr Eppel: 303,000 received light
bulbs. The figures are in here.
Q115 Mr Davidson: What proportion
is that of the total number of households you dealt with?
Mr Eppel: That was all the households
dealt with. Effectively every household at the minimum gets a
pair of light bulbs.
Q116 Mr Davidson: Maybe I phrased
my question badly. How many households only received light bulbs?
Sir Brian Bender: I think we may
need to come back to you on that.[7]
Q117 Mr Davidson: Let me be clear
about this: you do not know?
Sir Brian Bender: I am sure we
know, I do not have the information with me.
Q118 Mr Davidson: If one of the ways
in which you have been assessed is the number of households you
have dealt with and a substantial number of the households you
have dealt with only received light bulbs, the take-up of free
light bulbs could be increased much more easily than almost anything
and, therefore, your figures could be manipulated no problem at
all, you could rocket up the numbers with free light bulbs in
rural areas and thereby increase the balance very easily. I am
surprised that you have not considered something like that.
Mr Eppel: I found the point in
the Report in answer to your question. "Grants which result
only in the provision of energy efficiency light bulbs were about
8% of all the grants in 2001-02", so it is quite a small
proportion.
Q119 Mr Davidson: What percentage
in rural areas?
Mr Eppel: I could not tell you
that, that we would have to come back to you on.[8]
Chairman: We have a couple of supplementary
questions from people who want to come back to you.
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