Memorandum submitted by the Energy Saving Trust (FP 32)

 

This is the submission of the Energy Saving Trust to the Energy and Climate Change Committee's call for written evidence on fuel poverty.

 

The Energy Saving Trust is the UK's leading organisation working towards reducing emissions from households, communities and transport. Established since 1992, we are one of the key delivery agents for the Government's climate change objectives.

 

We welcome the opportunity to respond to this consultation on a subject which is becoming an increasingly important aspect of our work. Key issues addressed in our submission include:

- The potential for different support services to be more 'joined up' in order to reduce consumer confusion and improve access to support for vulnerable customers

- The important role of area based approaches

- The need for improvements in energy efficiency in the private rented sector

- The potential for better use of data to help target households at risk of fuel poverty

- The potential for renewables and solid wall insulation to tackle fuel poverty in off grid properties.

 

If you have any queries or would like to discuss these issues in more detail please do not hesitate to get in touch.

 

1. Improving Integration of Support Services

 

1.1 There are a large number of different support and advice services focussing on the key determinants of fuel poverty: energy efficiency, energy tariffs and income maximisation. These services are provided by a host of organisations including local authorities, energy suppliers, local and national charities and government bodies[1]. This can be confusing and impair access to support, especially for vulnerable consumers who may need greater assistance in accessing services.

 

1.2 Our advice services have a diverse customer base with users coming come from a wide range of financial and social circumstances. A high proportion of our telephone advice customers tend belong to be older age groups. We are conscious of the significant increase in fuel prices experienced over the last few years and the likely future trajectory for energy prices[2]. We are also aware that there are now over 5 million households in the UK in fuel poverty[3]. It is therefore unsurprising that our advisors receive a number of calls from people expressing concern about paying their bills. We are currently developing our advice services to support those customers concerned about paying their energy bills and those at risk of fuel poverty. This involves our advisors providing basic information on how to save money through changing energy tariffs, altering payment methods or switching suppliers and how to maximise incomes, as well as referring callers to sources of in-depth specialist support and advice. We are also strengthening and developing our referral systems to Warm Front (and the Home Energy Efficiency Scheme in Wales) and energy supplier CERT schemes to ensure customers access available support as quickly as possible and that they receive the best possible quality of service.

 

1.3 The current wide range of support services inevitably relies on the customer having to make multiple follow on calls. This is likely to lead to high levels of drop-out and vulnerable customers not accessing the support they require. In future, it may be possible to improve linkages between support services and to create a more integrated customer journey.

 

1.4 The Energy Assistance Package in Scotland provides a model of how a more integrated approach to energy efficiency and fuel poverty services could be developed (see annex 1 for summary of how the scheme works). The scheme utilises the expertise provided by existing services but provides a single point of access for the consumer. The 'journey' is managed on behalf of the customer so the service does not rely on them making multiple follow-up calls. From the initial point of contact their needs would be identified enabling other advice services to be provided to them proactively. For example, advice on tariffs or benefit entitlement is given through a follow up call at the most convenient time for the customer. Additionally, by integrating services for non fuel poor customers at the same time, the likelihood of services becoming stigmatised and this becoming a barrier to vulnerable households accessing support is reduced. The end of the current Warm Front scheme in 2011 could offer an opportunity to improve integration of services. In Wales, the Welsh Assembly Government is considering the possibility of a similar approach following the conclusion of the Housing Energy Efficiency Scheme.

 

1.5 This approach also allows for closer monitoring of service standards and customer satisfaction rates and for tough quality assurance processes to be developed. Centrally managing and monitoring the customer experience also makes it easier to track consumer needs and identify problems or gaps in services provision and for improvements to be made.

 

2. Improving access for vulnerable customers

 

2.1 Better integration of energy efficiency services with specialised fuel poverty services can in itself help increase access to services. The development of a single point of contact can also prevent fuel poverty services from becoming stigmatised and vulnerable consumers being reluctant to use them.

 

2.2 Any effective fuel poverty support service must work closely with local authorities and social housing providers to ensure that it is well integrated with local services and initiatives, and to ensure that vulnerable consumers are referred into the scheme.

 

2.3 For support services to be accessed by the most vulnerable it is essential that they work closely with trusted community and voluntary sector organisations[4]. This should include community groups, tenant organisations, social care services, health centres and others. The Scottish Power Energy People Trust[5] is often singled out as an example of best practice in supporting local voluntary and community initiatives working with supporting fuel poor households. Similarly, this is a key part of the new Energy Assistance Package in Scotland where community liaison officers are tasked with developing partnerships and working closely with community groups, local charities and health centres. Partnerships with national membership organisations and charities, such as Age Concern and Help the Aged, are also key to spreading awareness and supporting 'hard to reach' vulnerable consumers. Such activity is time intensive and must be adequately resourced.

 

3. Area based approaches and local programmes

 

3.1 Area based initiatives with intensive, well delivered door to door promotion of services, can help increase local consumer awareness and demand for energy efficiency measures and ensure that the most vulnerable households within an area receive support. Focussing such activity in areas of deprivation, as has been done with Warm Zones and is now being delivered through CESP, can maximise the benefits for vulnerable households.

 

3.2 It is inevitable that individual households outside of these target areas need support. As we begin to move focus towards more expensive and disruptive energy efficiency and microgeneration measures, the use of various natural 'trigger points' will be key to minimising costs and disruption. This suggests it will be important to maintain national level provision of support services to support households when most appropriate, for example when undertaking decorations or renovations.

 

3.3 It will be important for the national support schemes and the more local area-based initiatives to be well integrated. We believe it is important that the increase in area-based approaches does not lead to greater fragmentation, duplication of services and customer confusion. Area-based initiatives run by local authorities and other organisations should take advantage of the national services available and refer consumers to these services where appropriate. Equally, any national service should be aware of what local schemes are in place so it can refer consumers in to these schemes if appropriate. Ideally, both national and local schemes should mutually support and reinforce each other by channelling consumers towards the most appropriate support services for their circumstances.

 

3.4 Local authorities have a key role to play in the coordination and delivery of energy efficiency and renewable energy programmes. However, to date performance in this field has been patchy. While there are a small group of local authorities moving ahead quickly, many are lagging behind and do not have the level of experience and expertise required to take on such new roles. It is therefore vital that local authorities are appropriately incentivised to act and furthermore are given the support they need to develop their capabilities.

 

3.5 The Energy Saving Trust currently provides in-depth strategic support to over 110 local authorities through our one-to-one support programme, while our free Practical Help support line is used by over 90% of local authorities[6].

 

4. The private rented sector

 

4.1 There are a much higher proportion of highly inefficient homes in the private rented sector than in other tenures: the stock is much older on average and "G-rated" homes are nearly twice as prevalent in this sector as in other tenures. As a result tenants in the private rented sector are disproportionately likely to be living in cold homes.

 

4.2 Private landlords must be incentivised to undertake energy efficiency improvements. This could be achieved through an increase in scale and scope of the Landlords' Energy Saving Allowance (LESA). This allowance also needs to be properly promoted by government - action to tell landlords and their agents about LESA has been minimal. We also need to maximise the impact of Energy Performance Certificates (EPCs) in this sector. Tenants should be encouraged to use EPCs when they look for a home: some evidence suggests that tenants (perhaps more than home buyers) are interested in and responsive to EPC information about energy bill costs. We need to make sure that landlords are providing EPCs. Anecdotal evidence suggests there may be weaknesses in enforcement of EPC requirements. Additionally, there are no obligations to provide EPC information in web-based marketing of properties.

 

4.3 While we can take action to stimulate voluntary action on energy efficiency in the PRS, due to the problem of the split incentive (whereby the landlord pays for energy saving improvements, but the tenant benefits from lower fuel bills) legislation may be required in this sector. Over time, minimum standards for rented homes should be outlined which give a clear signal to landlords of what standards will be expected along with an adequate lead-in time and sign-posting to sources of support such as CERT and LESA. More immediately, local authorities could make much greater use of environmental health regulation, which should be used to tackle homes which are too expensive to heat. The Housing Health and Safety Rating System - the assessment tool used by environmental health officers - should clearly identify dangerously cold homes as those with a SAP rating of 39 or less (EPC rating F and G). There are approximately 700,000 F and G rated privately rented properties in England.

 

5. Focussing on the least efficient homes

5.1 There is a strong relationship between instances and the severity of fuel poverty and poor energy efficiency. The Fuel Poverty Advisory Group estimates that in 2006 45% of households in fuel poverty occupied properties with SAP ratings between 0 and 40. However, 18% of recipients of Warm Front support already had a SAP rating of 65[7]. Better targeting of support towards the most inefficient properties could help improve the level of impact. This could be achieved by prioritising support to those properties below a certain SAP level.

5.2 There are approximately 5 million properties with a SAP of 39 or less (F and G rated) in England. Recent analysis we have undertaken shows that significant improvements could be made to these properties at relatively low cost. 81% of F and G rated properties could be moved to a band E level for a cost of less than 3,000 and 37% at a cost of less than 1000. Moving all these properties up to an E rating would save approximately 9.4MtCO2 per year.

6. Better use of data

6.1 The Energy Saving Trust's Homes Energy Efficiency Database[8] (HEED) is the main national resource on the energy efficiency of the housing stock. It brings together information from CERT (and its predecessors), fuel poverty schemes and other programmes, and provides information on almost half of the housing stock. We have developed a means of identifying areas with high concentrations of CERT priority group and unfilled cavities by integrating aggregated benefits and age data from the Department for Work and Pensions. Through the inclusion of additional benefit data at a finer geographical resolution this approach could be developed to improve targeting and to monitor the effectiveness of energy efficiency and fuel poverty support schemes. Additionally, we are running a pilot project integrating meter point gas and electricity consumption data which could be used to monitor and evaluate schemes.

 

6.2 Inclusion of EPC data within HEED would help to further strengthen the tool by increasing its coverage and, crucially, providing a more robust sample of properties within a given area. Over time, as EPCs begin to filter across the housing stock, their inclusion in HEED could allow very effective targeting policies and programmes towards areas with the most inefficient housing stock. These areas are also likely to have the highest levels of fuel poverty, particularly where they correspond with areas of low incomes. The Energy Saving Trust does not currently have access to EPC data for England and Wales for HEED. This is in contrast to the situation in Scotland where the Energy Saving Trust administers EPCs on behalf of the Scottish Government and has full access to the data for the purposes of research and home energy efficiency programmes.

 

7. Off grid properties

7.1 Renewable technologies such as heat pumps can offer effective solutions to those at risk of fuel poverty off the gas grid and can offer significant advantages in terms of running costs and carbon emissions, over LPG or oil boilers. This was demonstrated by the recent two year Scottish Renewables Heating Pilot[9]. The experience of the trial underlines the importance of robust assessments of what technologies may be most appropriate for different circumstances and the need for advice on how to use the technology accompanying the installation. The trials of renewables underway as part of Warm Front should also provide important insights.

7.2 Consumer preferences and acceptance of technology options are important considerations. However, a balance is required to ensure that lack of consumer familiarity with new technologies does not block the use of the most appropriate technologies for their circumstances and lead to sub-optimal solutions being installed. In future, fuel poverty support programmes need to carefully assess the way in which choices over technologies are presented to off grid consumers and the overall level of choice given to households.

7.3 Support to off grid properties should follow the principles of the energy 'hierarchy' by first always reducing consumption requirements through energy efficiency measures.

7.4 Providing solid wall insulation to households at risk of fuel poverty, has the potential to support many consumers who do not benefit from current schemes, including many off grid properties. Around 7 million properties in the UK have solid walls[10]. Evaluation of CESP projects should offer important lessons in the implementation of solid wall insulation in vulnerable households. Beyond that, there is a need for new policies to rapidly increase the rate of installation of solid wall insulation. This will be essential to achieving our carbon targets and cutting the level and severity of fuel poverty.

February 2010
Annex 1: Summary of Scottish Energy Assistance Package

 

Overview

The Energy Assistance Package is a holistic package to help maximise incomes, reduce fuel bills and improve the energy efficiency of homes. It replaced the Central Heating and Warm Deal programmes from April 2009.

The new package provides a more holistic and integrated approach to tackling fuel poverty by bringing together the hard measures and the advice, reaching more people and providing a wider range of support.  The package was a recommendation of the independently chaired Scottish Fuel Poverty Forum as necessary in order to eradicate fuel poverty.

The package has four stages:

Stage 1: offers free expert energy advice to anyone who phones the Energy Savings Scotland Advice Centre (ESSAC) network on 0800 512 012

Stage 2: benefit / tax credit checks & advice on social tariffs to those at risk of fuel poverty

Stage 3: provides a package of standard insulation measures (cavity wall and loft insulation) to older households and those on one of a range of benefits through the energy companies' CERT schemes.  

Stage 4: bespoke energy efficiency measures (including but not limited to central heating systems, new boilers, draught proofing, air source heat pumps and solid wall insulation) for eligible groups who live in homes in the private sector with poor energy efficiency (SAP < 54)

 

Full eligibility criteria can be found at: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/access/FP/eap

 

Delivery

The Energy Saving Trust is responsible for developing, marketing and administering the scheme. Delivery will be through the existing network of Energy Saving Scotland advice centres (ESSacs) which the Trust manages on behalf of the Scottish Government. Five centres exist across Scotland: Highlands and Islands; South West; South East; North East; and Strathclyde and Central.

 

The EST role will be to manage the customer journey; various third parties will deliver some of the different EAP measures following referrals from the EST. These are as follows:

 

Stage 1: Energy advice is delivered via the ESSacs

Stage 2: Social tariff advice is delivered via the ESSacs working with the energy companies. Benefit and tax credit checks are delivered by the Pensions Agency (over 60s) and CAB Direct (under 60s)

Stage 3: CERT measures are delivered by suppliers

Stage 4: Installations will be carried out by Scottish Gas as managing agent for 2009/10



[1] http://www.eeph.org.uk/uploads/documents/partnership/EEPH%20Briefing%20Paper%20revised%2025-02-2009.pdf

[2]http://www.ofgem.gov.uk/markets/whlmkts/discovery/documents1/discovery_scenarios_condoc_final.pdf

[3] UK Fuel Poverty Strategy: 7th annual progress report http://www.decc.gov.uk/en/content/cms/what_we_do/consumers/fuel_poverty/strategy/strategy.aspx

[4] For example see: CSE (2006) Integrating Welfare Rights and Fuel Poverty Services, for the Energy Efficiency Partnership for Homes, http://www.cse.org.uk/pdf/pub1058.pdf

[5] http://www.energypeopletrust.co.uk/

[6] The Energy Saving Trust has recently begun developing specialist local authority advice services specifically on area-based approaches, see http://www.energysavingtrust.org.uk/business/Business/Local-Authorities/Area-Based-Approaches-Best-Practice-Guide

[7] National Audit Office (2009) http://www.nao.org.uk/publications/0809/the_warm_front_scheme.aspx

[8] http://www.energysavingtrust.org.uk/uploads/documents/housingbuildings/heed_bn%20April08.pdf

[9] See http://www.scotland.gov.uk/Publications/2008/11/17115604/0 and http://www.energysavingtrust.org.uk/corporate/Corporate-and-media-site/Media-centre/Hot-topics/The-role-of-renewable-heating-in-tackling-fuel-poverty-in-Scotland

[10] For more information please see Energy Saving Trust (2008) Energy Efficiency in Hard to Treat Homes http://www.energysavingtrust.org.uk/uploads/documents/housingbuildings/14_htth_s.pdf