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September 2007
Communities and Local Government Committee NEW INQUIRY AND CALL FOR EVIDENCE Existing Housing Stock and Climate Change1. The National Right to Fuel Campaign welcomes the opportunity to submit comments to this Inquiry. NRFC was established in 1975 with a key objective to end fuel poverty by securing a warm, dry, well-lit home for all, regardless of income and location, and has taken a leading role in putting fuel poverty high on the political agenda. The Campaign has a membership comprising voluntary organisations, local authorities, trade unions, individuals, academics and professionals in housing, social welfare and environmental health. 2. The National Right to Fuel Campaign response must be set in the context of: · concern that the climate change agenda pushes the issues of fuel poverty down the government agenda and subsequently increases inequalities in living standards. · a reverse in the declining numbers of households in fuel poverty, due to the rise in domestic fuel prices over recent years; · a lack of government response to this reverse in the recent Energy White Paper; · the unlikelihood of the government achieving the targets set out in the Fuel Poverty Strategy; · recent suggestions that the budget for Warm Front may be cut. 3. Related to the above, perhaps we can express disappointment at recent progress, low levels of investment to meet the Fuel Poverty Strategy objectives and future likelihood for these for the eradication of fuel poverty. 4. The NRFC welcomes this opportunity to raise the very real housing problems for low-income and often fuel-poor households within the context of climate change and the government response. Our response addresses only points where fuel poverty should be addressed within a climate change agenda.
Background 5. The government set out its targets for the eradication of fuel poverty in its 2001 UK Fuel Poverty Strategy; vulnerable households were to be removed from fuel poverty by 2010 and all households by 2016. The three key elements in providing affordable warmth are efficient and economic heating systems and effective thermal insulation, affordable energy costs and adequate household incomes for those who are economically inactive or otherwise financially disadvantaged. 6. Improvements across all of these areas, but especially increased income measures and lower fuel prices, meant that progress was being made and numbers of households in fuel poverty in England reduced from 4.3 million households in 1996 to 1.2 million households in 2004. Over the 3 years, 2004-2007 domestic energy prices rose dramatically. 7. Research by the National Right to Fuel Campaign and NEA, showed that, with increased fuel prices, there were likely to be between 1.1 and 2.1 million households in fuel poverty by 2009, assuming no reductions to the measures being used to address the problems of fuel poverty[1]. The 2007 Energy White Paper[2] showed that there are currently some 2.5 million fuel-poor households in England and that, even on the most optimistic assumptions about future energy price movements, the Government cannot achieve its 2016 fuel poverty target. 8. The serious impact of rising fuel prices on numbers of households in fuel poverty indicates that there has not been enough investment in improving domestic energy efficiency standards, ie "fuel poverty proofing" the homes of low-income groups so they are safeguarded against rising fuel prices. We consider that the government is being over-optimistic in its assumptions regarding the future price of fuel and, therefore, there is a very urgent need to address housing standards through considerable levels of investment and stronger regulation on housing standards, both to reduce carbon and greenhouse gas emissions and to eradicate fuel poverty whatever climate change threatens. The scale of the problem 9. NRFC members have frequently raised the issue of the definition of household income in quantifying fuel poverty as we are concerned that the current definition underestimates the numbers of fuel-poor households. The current government definition is that total fuel costs of more than 10% of income on fuel to ensure a warm and healthy living environment indicates that a household is in fuel poverty. 10. The exclusion of housing costs (rents and mortgage interest payments) from household income has a profound effect on the distribution of fuel poverty. Removing housing costs before assessing the percentage spend on fuel would have an equalising effect on household income and provide a more accurate number and distribution of households in fuel poverty. This would provide the government with a more realistic picture of the problem that needs to be tackled and improve targeting to reach households in fuel poverty. 11. 12. We are concerned that rising house prices have significantly raised housing costs and, therefore, increased the need to reconsider the issue and the revision of the fuel poverty definition. We consider that addressing the issue of housing costs in the definition of fuel poverty would enable government to have a better picture of the size and distribution of the problem which needs to be addressed. Existing housing compared to new build 13. The National Right to Fuel Campaign has been consistently disappointed in levels of investment, and cohesive programmes, for improving energy efficiency standards in existing housing targeted on low income households. 14. The mere numbers of existing homes against those being replaced and new build indicates that the focus of government attention now needs to be on existing housing. From BRE analysis, in the English House Condition Survey, there are clear statistical links between housing age, its energy efficiency and the incidence of fuel poverty, with fuel poor households more likely to live in older energy inefficient housing. For example, a particular group of concern in this context are the elderly who may be still living in a large family home but on a reduced income. 15. Building regulations covering energy efficiency standards relate to new build and there are standards for local authorities and social landlords for housing refurbishment, there are no targets for energy efficiency improvements in the private sector. There are targets for Decent Homes for vulnerable private sector households albeit no specific resources to meet the objective. The effect of this is that there is very limited public support for low-income households living in energy inefficient housing to improve their situation. 16. In the private rented sector, the Housing Health and Safety Rating System and the Houses in Multiple Occupation Legislation provide a regulatory framework but, as this covers several aspects of housing condition, still need further development to assess their effectiveness, in terms of the improvement to the energy efficiency of the building. This element needs to be strengthened and would support the points in the response from the Fuel Poverty Advisory Group that on the refusal by a landlord of Warm Front or Energy Efficiency Commitment grant, resources should be available for an HHSRS inspection to take place automatically. 17. An example of regulation which can be compared with the levels of regulation needed for the housing stock is that covering car maintenance, with regular MOTs as a legal requirement to assess road worthiness. Respective roles of residents, homeowners, landlords, local government, central government and the energy industry 18. Central government has to show a strong lead in both fuel poverty eradication and climate change mitigation. NRFC does not think it has been strong enough in the fuel poverty field and has serious concerns about its ability to put in place adequate regulation for future scenarios. 19. As mentioned above, we would like to see housing standards regulations strengthen to address energy efficiency issues, especially in the private rented sector where fuel poverty is endemic. Current regulation of this sector is currently inadequate to ensure decent housing standards for tenants, let alone energy efficient accommodation. 20. While the government has made effective use of contributions from the fuel suppliers, it has, to some extent, used this as a substitute for investment and support from the public purse. Our concern, if this source of funding was to be extended to include both fuel poverty and climate change mitigation measures and along with other fuel poverty groups, is that the levy on fuel is effectively a flat rate tax on all consumers, regardless of income, ie. a regressive tax impacting on low-income consumers to a greater extent than others. We believe that the government should look to fund programmes in these areas from public taxation which is a fairer way of raising funds. 21. To date, the approach to energy efficiency improvements has been unco-ordinated, resulting in poor targeting, duplication of effort by different programmes and failing to reach some fuel-poor groups. We support calls to increase the role of local authorities in co-ordinating programmes to eradication fuel poverty, and address the problems of climate change. There has long been a call for local authorities to have statutory targets for the eradication of fuel poverty as they have a cross cutting role for their local populations and have the benefit of a local knowledge base. 22. We would highlight, again, the particular problems for low-income households, that they have no capacity to carry out any energy efficiency improvements to their homes (even the purchase of low energy light bulbs may be beyond their means as they do not have sufficient spare resources to invest to save later). Furthermore, in many cases, low-income households have a small carbon footprint because they cannot afford to heat or light their homes adequately or to make use of other energy services to the extent that higher income households do. For this group, central government must maintain and improve on current programmes for improving energy efficiency. 23. Although not directly related to this inquiry into housing, the appalling inefficiencies of energy utility infrastructure provision need to be addressed and the energy utility companies need to solve the technical problems of distributing electrical power from distributed generators. Government efforts to reduce carbon emissions from existing housing stock 24. The government sets a SAP rating of 65 as being the level at which fuel poverty is generally unlikely. The Warm Front scheme has this target where feasible. However, where there are problems other than lack of, or poor, heating and insulation, co-ordination with other agencies, such as local authorities, needs to be made to undertake a more comprehensive approach to the improvement of housing stock. 25. A problem which reduces the effectiveness of Warm Front in helping its potential clients is the demand for a client contribution where the maximum grant is insufficient.. NRFC does not think any household which qualifies for Warm Front should be asked for additional funding, as the reason they qualify is that they are on a low income and therefore have limited resources. 26. Members of the Campaign have had cases where the funds being demanded range from a few hundred to over two thousand pounds. A quick analysis of the figures from Eaga Partnership, the scheme managers, showed that while the overall percentage of households needing to find additional money was around 5%, where central heating was being installed the percentage of cases needing top up was about 32%. These are the households with the coldest conditions if they need central heating and this is a very high percentage of these cases. 27. Improving co-ordination with other programmes, including non energy efficiency improvement programmes such as Care and Repair, could go a long way to solving this problem. 28. The threat to reduce funding for Warm Front is a great concern to NRFC members, especially as there does not appear to be additional long-term funding proposed for any other fuel poverty initiatives. The Pre-Budget Report 2006 allocated a sum of £7.5million to develop area-based initiatives but it was for the current financial year only with very short deadlines for submission and no further funding to support the schemes. It takes considerable input from all partners over a long period of time to establish effective joint initiatives and this funding did not seem to recognise that. 29. The Warm Zones approach works along more comprehensive lines and needs to be strengthened. Currently, addressing solely fuel poverty issues, we would support the points in the NEA response that it could be broadened to incorporate climate change initiatives. 30. As mentioned above, the various standards relating to housing conditions need more effective implementation and, in relation to the private rented sector, greater powers for local authorities to ensure decent, energy efficient housing for tenants. It is worth noting that with the recent increase in "buy to rent", the scale of this problem is likely to increase. Technologies to reduce emissions 31. While some of the technologies available to reduce emission are currently developed enough for use on social housing, such as CHP, we are very concerned that funding for further development may reduce funding available for fuel poverty programmes. As stated in our opening points, we are seriously concerned about increasing inequalities in housing standards. The balance of finance between technical fixes and the eradication of fuel poverty must be weighted in favour of the latter. 32. There is considerable evidence to show that improving energy efficiency throughout the housing stock can be effective in reducing carbon and greenhouse emissions. This route has the effect of reducing fuel bills and is therefore more appropriate for low-income households. 33. 34. The other group is housing referred to as "hard to heat" which results from the building construction. In many cases, the building is of a solid wall construction which loses heat rapidly but which is difficult and expensive to insulate. Further developments in low emission technology or advances in insulation techniques, such as external wall insulation, may be needed for these situations. Costs associated with reducing carbon emissions from existing housing 35. We have referred on several occasions to our concerns about adequate funding for improving the energy efficiency across the housing stock, and not just improving the standards for new build. 36. To ensure an equitable approach to this funding, the government needs to use central funds raised through the general tax system. Its extensive use to date of money raised by a levy on domestic energy consumers is a regressive tax on low-income households. 37. We have also referred to the scale of the problem of fuel poverty, with increased fuel prices and housing costs which limit the scope of low-income households to invest in energy efficiency improvements. Improved targeting and co-ordination of area-based approaches need to be established to ensure that the government reaches its target of the eradication of fuel poverty by 2016.
[1] The Fall and Rise of Fuel Prices and Fuel Poverty, NRFC/NEA, July 2005 [2] Meeting the Energy Challenge, DTI, May 2007 |