Memorandum submitted by Age Concern and
Help the Aged (FP 18)
From April 2010 Age Concern and Help the
Aged will be known as Age UK. We will celebrate ageing and work
to create opportunity in later life; and we will also challenge
disadvantage and unfairness wherever we find it.
Age UK will work with partners in the UK and
across the globe. We will be working with Age Cymru, Age Scotland
and Age NI and with local Age UK partners in communities across
England. Internationally we will work through HelpAge International
to support a network in 100 countries around the world.
1. INTRODUCTION
1.1 Age Concern and Help the Aged welcome
the opportunity to respond to this inquiry into Fuel Poverty by
the Energy and Climate Change Select Committee. Older people account
for around half of the more than 5 million UK households
now living in fuel poverty. This means that one in three pensioner
households were in fuel poverty last winter. It is now clear that
the Government will not meet its statutory target to eliminate
fuel poverty among vulnerable households by 2010. Progress has
clearly been hindered high energy prices over the past few years.
The Government cannot insulate the population from the effects
of rising energy costs. However, it can—and must—do
more to prevent the poorest and most vulnerable households from
falling into fuel poverty.
2. PROGRESS AGAINST
GOVERNMENT TARGETS
2.1 In the early years of the Fuel Poverty
Strategy, there was clear progress, with the number of households
in England in fuel poverty falling to 1.2 million (of which
1 million were "vulnerable") in 2004. But as energy
prices began to rise sharply, that was not ever going to be maintained
with the programmes in hand. By 2007, the last year for which
official figures are available, there were 2.8 million households
in fuel poverty (2.3 million vulnerable), and the Government
estimates 3.6 million in 2008, and 4.6 million in 2009.
About half of these are pensioner households. Clearly, the 2010 target
is history. To stand any chance of reaching the 2016 target
to eradicate fuel poverty in all homes in England, particularly
in the face of irresistibly upward moving fuel prices as indicated
by both the Committee on Climate Change and Ofgem, we will need
much more challenging and vigorous policies than are currently
in place.
3. DEFINITION
OF HOUSEHOLDS
IN FUEL
POVERTY
3.1 The definition was formulated over 20 years
ago, and the numbers in fuel poverty are estimates derived from
modelling. So it is not a precise measure. However it gives a
feel for a problem which we all recognise exists, though for practical
purposes (such as targeting available resources to appropriate
households) it is not particularly helpful. With the development
of domestic Energy Performance Certificates we will slowly build
up, at individual dwelling levels, a picture of the energy efficiency
of our housing stock. With more work on income data-sharing, we
can then match the household income to the energy efficiency of
the individual dwellings. In this way we can begin to develop
a more precise map of fuel poor households, but it will require
an unprecedented degree of co-operation and data-sharing between
Department for Energy and Climate Change (DECC), Department for
Communities and Local Government (DCLG), Department for Work and
Pensions (DWP), Her Majesty's Revenue and Customs (HMRC) and local
government.
4. COHERENCE
OF THE
GOVERNMENT'S
INITIATIVES ON
ENERGY EFFICIENCY
4.1 Government strategies in this area have
always sought to elide two objectives within the energy efficiency
elements of its domestic housing framework—to reduce energy
use and thus carbon emissions and to reduce fuel poverty. This
twin track is not always coherent, since the various programmes
in play are designed to achieve differing objectives and are available
to differentiated parts of the population. Certainly from the
perspective of the consumer, the picture of what is available
looks anything but coherent. In addition, the specific programme
to address fuel poverty, Warm Front, has been the victim of some
erratic budgetary decisions, and the stop/go nature of its funding
has caused confusion for customers as well as the service providers.
4.2 What emerged clearly from the Government's
evidence in last year's judicial review of its fuel poverty targets
and strategy, was that it had a strategy to do whatever was "reasonably
practicable" to meet its targets, but if what was examined
(for example extending the mains gas network) was outwith existing
budgets, it was considered not reasonably practicable. So effectively,
its fuel poverty strategy was constrained by existing budgets
regardless of how effectively it was or was not reaching its targets.
In the absence of new funding from the Treasury, if it was to
up the tempo of energy efficiency work, the Government had to
rely on arm-twisting the energy companies to increase their social
spending, and in the area of social tariffs for example, that
has led to a very confusing and incoherent system. Each supplier
has a different "product" with different eligibility
criteria, and consumers and consumer advisors struggle to identify
what is available. The proposal in the current Energy Bill to
introduce a mandatory "social price support" scheme
from 2011 will at least introduce clarity to this area.
5. THE METHODS
USED TO
TARGET ASSISTANCE
AT HOUSEHOLDS
WHICH NEED
IT MOST
Warm Front
5.1 The NAO, with its report in February
2009, has had the last word on targeting Warm Front. Since fuel
poverty is essentially a theoretical construct, we have had to
rely on proxy measures, such as entitlement to particular benefits,
to target the scheme. The NAO identified that 57% of households
in fuel poverty (on the vulnerable definition) do not qualify
for Warm Front because they do not claim the appropriate benefits,
and at the same time, 75% of households claiming those appropriate
benefits (and so would qualify) are not in fuel poverty. Since
that report, there have been changes to both the design and delivery
of the scheme which have improved it—for example, raising
the upper limit of the grant per household has largely eradicated
the ludicrous position where people in receipt of means-tested
benefits were being asked for capital contributions in order to
get work deemed necessary carried out. The Government repeatedly
rolls into its litany of the support it provides to the fuel poor
the cash payments it makes, and these are discussed in (6) below.
5.2 Last year Age Concern and Help the Aged
ran a campaign to improve the Warm Front programme. A major issue
was top ups which were forcing the poorest older people to withdraw
from the programme. Complaints to our information and advice services
about top ups seem to have receded since the increase in the level
of the grant.
5.3 The main issue we have encountered over
this winter has been delays with fixing broken boilers. Warm Front
is not an emergency programme and waiting times can lead vulnerable
older people with multiple health conditions to spend months without
heating and hot water. There are also continuing concerns regarding
the standard of workmanship and information given to clients.
5.4 We have included some of our case studies
on this issue as an annexe to the written submission. As some
of these case studies show, problems arise when older people can
no longer cope without heating and hot water, take things into
their own hands and get the job done by a local contractor who
is not part of the Warm Front programme.
Community Energy Support Programme
5.5 The proposed Community Energy Support
Programme will deliver area-based, street-by-street, house-by-house
improvements in areas with high levels of multiple deprivation.
This is likely to be better targeted, but it is currently a very
small programme. If it is the model for the future (as is envisaged),
and if it was significantly up-scaled, it too would become less
focused on fuel poor households over time. The only way to really
understand and target fuel poor households would be the comprehensive
survey and data-matching approach discussed in (2) above.
6. SOCIAL TARIFFS
6.1 Age Concern and Help the Aged have campaigned
for a number of years for social tariffs to be made mandatory
and we very much welcome the provision in the current Energy Bill
that will achieve this. Our campaign was partially realised in
July 2008 when Ofgem introduced guidelines that required
companies to make their social tariffs at least as low as their
lowest tariff (usually for those paying online or by direct debit).
Prior to this, research showed that the social tariff was not
necessarily the lowest. However, we also think it is important
that the same eligibility criteria and core elements should be
required. At the moment, each supplier's social tariff is different
in terms of eligibility and level of discount.
6.2 We are not persuaded by the companies'
opposition to this on the basis that it stifles innovation and
their ability to differentiate. The point about social tariffs
is they should be available to fuel poor households who are very
unlikely to be searching for the cheapest tariff on websites.
These households are more likely to seek advice and help from
local advice agencies such as Age Concern. The variation between
the companies of who is eligible and what the tariff offers makes
it difficult for advice agencies to be sure of advising the client
on which supplier is offering the best tariff for them, let alone
individual households.
6.3 There are also issues about customer
"churn"—how do customers know when they have slipped
into eligibility for help, and more significantly how are they
deprived of their social tariff if their circumstances change
for the better? The Government seems minded to restrict the social
price support scheme to older people (possibly over 70) on Pension
Credit, a group which is unlikely to churn very much, but this
restriction is likely to seriously upset the other parts of the
population in fuel poverty—who probably make up more than
half the total household numbers.
7. WINTER FUEL
PAYMENTS AND
COLD WEATHER
PAYMENTS
7.1 Cold Weather Payments are clearly well
targeted in that they are only paid to people on means-tested
benefits when the weather is cold. But of course this begs the
question of whether people claim their means-tested benefits,
and Pension Credit (for example) is only claimed by 65-70% of
those households entitled. The Winter Fuel Payment, on the other
hand, is universal so is hardly a policy to help the fuel poor.
It is really a Winter Payment to all pensioner households, since
though it was introduced in 1997, it assumed its present scale
(and became universal as against means-tested) during the period
when the State Pension was uprated by only 75p per week. It can
be seen as a fig leaf to cover the decision to hold the State
Pension increases to the link with inflation rather than earnings.
This point is worth emphasising, because the amounts of money
spent on the Winter Fuel Payments constitute the most substantial
part of the support which the Government claims to be allocating
to fuel poverty measures. However helping poor households with
money has to be a central part of any fuel poverty strategy until
such time as their houses have been sufficiently refurbished to
allow them to be adequately warm at an affordable cost.
8. SUPPORT FOR
HOUSEHOLDS WHICH
ARE NOT
CONNECTED TO
THE MAINS
GAS GRID
8.1 Gas currently offers the cheapest space
heating, and so the best fuel to provide to help the fuel poor.
This will not always be true. Renewable technologies (such as
photo-voltaics or heat pumps) have a part to play for households
off the mains gas network today, but their deployment as part
of the Government's fuel poverty strategy has barely started.
District heating schemes using renewables could also be helpful
to communities away from the mains gas network, but these initiatives
receive only minor recognition in the suite of Government programmes
on the table. Meanwhile since only gas and electricity supply
companies have license obligations to provide customers with energy
efficiency services, other fuel users lose out, and as only gas
and electricity prices are regulated by Ofgem the users of other
fuels enjoy no such protection.
February 2010
Annex 1
WARM FRONT CASE STUDIES
Mrs P had a new boiler installed in February
2009 under the Warm Front programme. Over Christmas she had
to contact the firm who installed her heating system on numerous
occasions as she had no heat. They did come out to the property
three or four times for the same problem—frozen pipes. The
last time she contacted them they refused to come out and told
her to boil a kettle and pour it over the pipes. To do this she
would have needed to climb a ladder as the pipe is located quite
high up on her gable end. At 92 she did not feel this was
an option. She eventually managed to get a private contractor
in who said that whoever installed it had done a poor job and
the pipes should not have been placed where they were. She has
had to pay £240 for the work and would like to be reimbursed
by Warm Front.
Mrs M is experiencing problems with the outside
pipes of her heating system, which you fitted last year. The outside
flue became blocked with ice causing the system to break down.
Emergency action was requested by the adviser.
Mr and Mrs M have been waiting for an engineer
to assess their heating system since November. Originally, the
system worked but not properly but then stopped working altogether
leaving them without heating. Mr M rang the call centre and was
informed that they could not deal with the matter until the end
of the month due to the current cold weather conditions. The adviser
requested that they treat the case as an emergency and provide
temporary heating in the meantime—the latter was not offered
by the call centre.
One adviser commented, "In this exceptionally
cold weather we are concerned about older people waiting for Warm
Front installations, where their heating systems are no longer
functioning. In the last few weeks we have had two clients who
have contacted Warm Front because they have no source of heating
and both were offered heaters but they have not been delivered.
One client has become so desperate she has cancelled the order,
borrowed £1k from family and ordered a new boiler privately.
She is using her recently awarded Attendance Allowance to repay
the loan. She wanted her plight highlighted to save other older
people". Eaga informed the adviser that they have a limited
stock of temporary heaters available.
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