4 A comprehensive approach
154. Fuel poverty is a complex issue and a comprehensive
approach is needed which draws together policies on all three
key factorsfuel prices, incomes and energy efficiency of
homes.
Delivery of a national action
planan area based approach
155. We received evidence criticising the fragmented
delivery of energy efficiency programmes. The Fuel Poverty Advisory
Group proposed an in-depth review of the interaction between CERT
and Warm Front and considered that "the case for such a review
is now evermore stronger with the £350 million in new resources
proposed by the Prime Minister for the Community Energy Saving
Programme" in September 2008.[229]
156. The Local Government Association considered
that a long-term strategy was needed which scaled up assistance
"in a coordinated area-by-area approach".[230]
It cited the example of Kirklees Council which offered all households,
regardless of income, "free insulation and other basic energy
efficiency measures" but which also had a partnership based
approach which delivered "multiple solutions to fuel povertyboth
income maximisation and energy efficiency".[231]
157. Kirklees Council's area-based approach reduces
the administrative burdens and the costs of identifying households.
Kirklees argued that their "we will come to you" message
motivates all householders to take up the offer of free insulation.[232]
Kirklees Warm Zone
This is a three year project run by Kirklees Council which began in February 2007 aiming to:
· Increase the energy efficiency of local housing stockincreasing the average SAP of 51 to 65 in the private sector (the average SAP of Kirklees social stock is now 76 following Decent Homes programme investment);
· Reduce fuel poverty;
· Reduce carbon emissions;
· Improve the health and wellbeing of Kirklees residents.
The scheme will cost £21 million of which £11 million has been provided by Scottish Power as part of its CERT programme. The remainder of the funding will come from the Council's own budget. The Council points to increased efficiency from economies of scale and the lower administrative costs incurred by not having to target specific groups.
In addition Kirklees operates a £3 million Re-Charge scheme offering interest free loans of up to £10,000 for installing renewable or low-carbon technologies in households, with 10% of funding ring-fenced for fuel poor households.[233]
|
158. The Environmental Change Institute argued for
an area-based approach and integrating energy efficiency schemes
better by giving more responsibility to local authorities and/or
the Homes and Communities Agency, together with the appropriate
funds".[234] Energy
supply companies also supported an area-based approach. Centrica
told us about its area-based programme, Green Streets, which,
by highlighting the positive impact of simple energy efficiency
products and behaviours, led to a reduction in energy consumption
of around 30% compared with the previous year.[235]
159. The Parliamentary Warm Homes Group has pressed
for "the systematic roll-out of a single national energy
efficiency scheme which is delivered at a community level"
and argued for a study of the "benefits of merging all of
the current energy efficiency and microgeneration schemes and
pooling their funding".[236]
The Group noted that a single scheme would enable the suppliers'
obligation to become "a simple financial obligation".[237]
160. The National Audit Office's report on the Warm
Front scheme published in February 2009 concluded that "there
are a range of Government initiatives and programmes at both local
and national levels to help tackle fuel poverty, which risk duplicating
efforts in targeting and assisting fuel poor households".
It recommended that DECC "make effective arrangements to
enable work on the different energy efficiency schemes to be coordinated".[238]
However Centrica argued against specifying a single approach for
all homes. The company emphasised the benefits of targeting people
at key life stages, such as moving home or retiring, when motivation
to act is higher.[239]
161. The Government's proposed new Community Energy
Savings Programme will pilot a coordinated, community-based approach
in which energy efficiency and heat generation are considered
together, "working door-to-door and street-to-street to cover
the needs of the whole house",[240]
and assessing the potential for community scale projects, such
as district heating.[241]
162. The Government is considering establishing a
single body to coordinate the schemes but it also recognises local
and regional government roles in implementing schemes and their
good local knowledge.[242]
Many local authorities have already adopted targets with local
partners to improve household SAP levels in their communities.
The Scottish approachScottish Energy Assistance Package
In Scotland a comprehensive approach is being adopted in an attempt to tackle all aspects of fuel poverty, not just energy efficiency. From April 2009 the "Scottish Energy Assistance Package" is offering a range of advice and measures.[243]
The project will receive Government funding of £55.8 million per yeara 20% increase on existing fuel poverty budgetstogether with CERT funding from the energy companies.
The integrated package is aimed at helping to increase incomes, reduce fuel bills and improve the energy efficiency of homes through, for example energy, benefits, tax credit and tariff checks, standard insulation measures provided free for those most vulnerable to fuel poverty and enhanced energy efficiency measuresincluding central heating, renewable heating systems and insulation for hard to treat homesfor properties occupied by low income households.
|
163. We welcome the Secretary of State for Energy and Climate
Change's recognition that energy efficiency proposals have to
date been incremental and his support for a comprehensive national
approach delivered at a community level.
164. We regret that there has to date been a lack
of ambition in the Government's plans to upgrade the energy efficiency
of our existing homes, which is in stark contrast to the clear
aims for improving the energy efficiency levels of new homes.
We consider that the piecemeal approach to programmes has been
a deterrent to setting higher ambitions for energy efficiency
of English homes and that the arguments for an area-based approach,
focusing first on the areas of most need, are compelling.
165. Given the experiences already gained under
existing schemes such as CEEF and Warm Zones we do not think it
is justifiable to wait for the outcomes of CESP before developing
detailed proposals on area-based approaches. We therefore recommend
that DECC undertake an assessment within the next six months of
the costs and benefits of realigning existing programmes into
a comprehensive, area-based programme, examining the potential
benefits to be had from more efficient targeting and delivery,
with improved customer awareness and uptake. This assessment should
encompass how area-based approaches could enable integration of
energy efficiency with income maximisation and price minimisation
measures for the fuel poor. It also needs to address the benefits
of integrating energy efficiency and heat generation programmes.
166. Locally-led programmes can be highly effective
in utilising local knowledge, joining together local partners
and engaging local residents. Local authorities are well placed
to lead on energy efficiency and fuel poverty programmes, with
their unique combination of cross-organisational links, democratic
mandate to deliver local priorities, contacts with local residents
and in-depth understanding of local circumstances on a range of
factors such as the condition of housing stock and socio-economic
profiles.
167. We recognise that there is a need to define
areas for schemes carefully, including setting the appropriate
geographical scale as well as location and therefore support the
use of local authorities as coordinators and delivery agents of
area-based programmes, and not merely as partners in delivering
energy companies' targets.
168. This approach could enable energy company
delivery of CERT programmes to be replaced with a levy on energy
companies paid into a central fund. Combined with funding from
other programmes this would be distributed to local authorities
to fund delivery of the national action plan to upgrade energy
efficiency.
Refocusing Government priorities
169. Many submissions referred to the apparent low
priority given by the Government to tackling fuel poverty. Up
until 2008 Defra had a Public Service Agreement (PSA 7) to "eliminate
fuel poverty in vulnerable households by 2010 in line with the
Government's Fuel Poverty Strategy objective". Since 2008,
however, fuel poverty has been downgraded to subsidiary objectives
under PSAs on poverty.
170. Since the creation of DECC fuel poverty has
been the responsibility of one departmentpreviously responsibility
was split between Defra and DBERR. Consumer Focus welcomed the
integration of fuel poverty within DECC but expressed concerns
about its level of resources.[244]
171. Fuel poverty has slipped down the list of
Government priorities at a time when rising energy prices mean
action is most needed. The creation of the Department of Energy
and Climate Change provides the opportunity to rectify this but
there is little indication that this is yet happening.
172. We recommend that the Secretary of State
for Energy and Climate Change sets out in the next three months
the level of priority his department will give to fuel poverty
objectives and how it will work with other Government departments,
agencies and private organisations to fully implement its proposals.
A comprehensive fuel poverty
strategy and action plan
173. A number of organisations highlighted the need
for a comprehensive review of the Government's fuel poverty strategies
and programmes. RWE npower argued for a poverty working group
comprising Government and key industries impacted by poverty issues
tasked with producing a long term, coherent and integrated strategy".[245]
Scottish and Southern Energy argued for an independent central
"National Fuel Poverty Agency" to coordinate information
sharing, energy efficiency schemes and benefits assistance.[246]
The Parliamentary Warm Homes Group called for Government to develop
a "fully costed, cross-departmental fuel poverty strategy"
including a "distinctive rural fuel poverty strategy which
responds to the particular challenges experienced by those living
in more remote areas".[247]
The Minister told us that she had instigated a thorough review
looking at all aspects of fuel poverty.[248]
A NATIONAL PLAN FOR ENERGY EFFICIENCY
174. Energy efficiency measures have a central role
in delivering sustainable, long term reductions in fuel poverty.
Organisations including Consumer Focus, Friends of the Earth,
Age Concern, Barnardos and the Child Poverty Action Group have
called for a "national programme to bring all properties
up to a minimum energy efficiency standard of SAP 81 starting
with the homes of the fuel poor".[249]
The TUC estimates that £3 billion could fund free cavity
wall insulation for every home in Britain and that insulation
work would provide "around 40,000 person years of employment",
supporting the construction industry".[250]
Unite told us about the German mass insulation scheme planned
jointly by the German Government and the unions in the early 2000s
which saved 200,000 construction jobs and helped to get "every
home up to a high degree of energy efficiency".[251]
175. The Minister told us that SAP 81 across all
housing stock was unrealistic but believed it was "not unreasonable
to have a SAP rating target of 65" for the Warm Front programme.[252]
176. The Government has a challenging aim for "emissions
from existing buildings to be approaching zero by 2050" as
well as for all homes to have received a "whole house package
including all cost effective energy efficiency measures"
by 2030 and all lofts and cavity walls to be insulated by 2015.[253]
The Secretary of State for Energy and Climate Change called this
"the Great British refurb".[254]
177. The Government needs to set out a road-map
showing how it intends to meet its fuel poverty targets and identifying
the contributions from each of the three elements affecting fuel
poverty levels (namely prices, incomes and energy efficiency levels)
towards reaching the targets. This strategy should include a costed
action plan which identifies the levels of funding required to
deliver the programmes needed, together with a timetable for planned
phasing of expenditure and identification of key funding sources.
Responsibilities of each department should be clearly set out.
178. The major factor in derailing the Government's
progress towards its 2010 target was the unanticipated and unplanned-for
hike in electricity and gas prices. While it is not always possible
to accurately forecast price movements it is nevertheless possible
to set out a range of likely price scenarios. DECC's action plan
therefore needs to be based on a range of scenarios for fuel prices,
covering the spectrum from high to low, in the coming years and
decades. This should set out specifically how it plans to meet
the 2016 target within its fuel price scenarios.
179. We recommend that as part of this plan the
DECC sets a target date for improving the English housing stock
to a specific level of energy efficiency. This level will be dependent
on the modelling of the impact of price rises and income levels
on fuel poverty. We recommend that SAP 81 should be adopted wherever
practicable, with a minimum SAP level of 65.
180. We are surprised that the Government has not
previously undertaken work to examine how the experiences of other
European countries could be used to inform approaches in the UK.
Alongside the work on the action plan, we recommend that DECC
commission, and report on within 6 months, a review of fuel poverty
reduction policies undertaken by similar European countries and
assess their effectiveness in a UK context.
229 HC (2007-08) 1099, Ev 5 Back
230
HC (2007-08) 1099, Ev 99 Back
231
Ibid Back
232
Ev 96 Back
233
Ev 97 Back
234
HC (2007-08) 1099, Ev 123 Back
235
HC (2007-08) 1099, Ev 61 Back
236
HC (2007-08) 1099, Ev 88 Back
237
Ibid Back
238
Report by the Comptroller and Auditor General, The Warm Front
Scheme, HC 126 (2008-09), p 7. Back
239
Ev 102 Back
240
Department of Energy and Climate Change and Department for Communities
and Local Government, Heat and Energy Saving Strategy Consultation,
February 2009, p 4. Back
241
Department of Energy and Climate Change and Department for Communities
and Local Government, Heat and Energy Saving Strategy Consultation,
February 2009, p 69. Back
242
Department of Energy and Climate Change and Department for Communities
and Local Government, Heat and Energy Saving Strategy Consultation,
February 2009, p 70. Back
243
"Energy Assistance Package", The Scottish Government,
website housing pages, http://www.scotland.gov.uk Back
244
Q 263 Back
245
HC (2007-08) 1099, Ev 33 Back
246
Ev 91 Back
247
HC (2007-08) 1099, Ev 86 Back
248
Q 319 Back
249
HC (2007-08) 1099, Ev 19 Back
250
HC (2007-08) 1099, Ev 83 Back
251
Ibid Back
252
Q 331 Back
253
Department of Energy and Climate Change and Department for Communities
and Local Government, Heat and Energy Saving Strategy Consultation,
February 2009, p 3. Back
254
Ed Miliband, Speech to launch the Heat and Energy Saving Strategy
Consultation, 12 February 2009. Back
|