Memorandum submitted by the Local Government Association Group (FP 57)

 

The LGA Group

 

The LGA Group is made up of six organisations: the Local Government Association (LGA); the Improvement and Development Agency (IDeA); Local Government Employers (LGE); Local Authorities Co-ordinators of Regulatory Services (LACORS); Local Partnerships and the Leadership Centre for Local Government

 

Our shared ambition is to make an outstanding contribution to the success of local government. Together we work with and on behalf of councils to lobby for changes in policy and legislation, build a strong and positive reputation for local government and support them and their partnerships to continuously improve and be innovative.

 

We provide services at the national level which support and are complementary to the regional and local support provided to councils, as well as the work councils themselves undertake. We work with authorities across England and in some activities across Wales, Northern Ireland and Scotland too.

 

The 424 authorities who make up the LGA Group cover every part of England and Wales. Together they represent over 50 million people and spend around 113 billion a year on local services. They include county councils, metropolitan district councils, English unitary authorities, London boroughs, shire district councils and Welsh unitary authorities, along with fire authorities, police authorities, national park authorities and passenger transport authorities.

 

Introduction and Summary

 

 

1. The LGA is extremely concerned about the rise in the number of people in fuel poverty as the result of rising energy prices and the economic downturn. Despite efforts to reverse this rise, we have seen the number of households living in fuel poverty in England rise from 1.2 million in 2004 to more than 4 million in September 2008.

 

2. Councils across the country are leading the way in tackling fuel poverty in their localities. They are promoting new, cost-effective ways of generating low cost and low carbon energy and are working to improve the energy efficiency of homes, reducing fuel poverty and helping cut all household energy bills.

 

3. Local action is cost-effective, co-ordinated and comprehensive. Councils, which are democratically elected and trusted by their residents, work with their communities and local partners to co-ordinate their work to eradicate fuel poverty.

 

4. More needs to be done to ensure that projects to help decrease fuel poverty can be initiated and managed at the local level. Centralised projects and targets are not the best way of dealing with the specific, local concerns of different areas. Councils will understand the income pressures of their residents on, for example, higher living costs, house prices, rental costs and food prices, particularly in London and city centres, or higher transport costs, particularly in rural areas. This affects the proportion of income then available to spend on energy. The current definition of fuel poverty does not incorporate these local issues, but instead has an absolute national definition, which is not representative.

 

5. Councils can also understand, and lever in funding for, renewable energy projects that are appropriate to the local area and can provide affordable heat and electricity, such as ground-source heat-pumps for fuel poor households in rural areas (Harrogate Council), or combined heat and power plants in built-up areas (Westminster and Southwark Councils).

 

6. Councils are best placed to understand the specific issues faced in their neighbourhoods and act on these accordingly.

 

7. Councils can deliver:

 

o Economies of scale through area-based programmes

o Community engagement and communication

o Consumer protection - working as a trusted arbitrator to help residents work through complicated financial, technical and lifestyle changes.

o Greater equity in the decision making behind the allocation of funding for home energy efficiency measures, not purely based on lowest cost

 

8. If central government gives local government the appropriate resources and framework to deliver on their ambitions more councils will come forward to take responsibility for innovative home energy efficiency and fuel poverty reduction programmes.

 

 

The coherence of the Government's initiatives on energy efficiency

 

9. At a national level, the Government is undertaking new work designed to transform housing stock, cut household bills and reduce fuel poverty. A variety of schemes, including CERT (Carbon Emissions Reduction Targets), the Community Energy Saving Programme (CESP), the Heat and Energy Management strategy (HEM), the Renewable Heat Incentive (RHI), smart metering and feed-in tariffs exist to this end. This creates a confusing, overlapping alphabet soup of schemes which are funded and managed centrally. The combined budget for programmes to improve home energy efficiency from 2008 - 2011 is approximately 7 billion.

 

10. The LGA supports the intention of these schemes but believes that they should be reformed to make the most of the supplier and taxpayer funding available. Despite these schemes, by 2011 it is expected that 5 million homes will still lack basic insulation, a key factor in alleviating fuel poverty.

 

11. In the Pre-Budget report the Government allocated a further 200 million to improve energy efficiency and tackle fuel poverty by offering:

 

a. 400 for up to 125,000 households to upgrade their old boilers to the latest energy efficient models with a greener boiler incentive; and

 

b. extra resources for Warm Front to help 75,000 of the most vulnerable households with heating and insulation.

 

The LGA welcomes additional resources to combat fuel poverty. However, again we feel that councils could better co-ordinate these funds on an area basis at a local level. This would ensure, through councils' expert local knowledge, that the funds are spent efficiently and effectively, where they are most needed the most in local areas.

 

12. We have therefore been calling on the Government to bring together the multitude of funding streams allocated to the combating of fuel poverty into a National Community Energy Action Fund. This fund of 7 billion, created by amalgamating the funds available for improving home energy efficiency from 2008-2011, would be open for bids by councils and local partners who wish to undertake systematic area-based programmes to cut household fuel bills by 300 per household each year and carbon footprints by 20%.

 

13. To ensure the success of this policy, industry would need to be supported to ensure that it has the skills and capacity to effectively deliver on any new strategies formed by local councils.

 

14. The forthcoming roll out of smart meters by 2020 provides an opportunity to discuss with people how they can improve their energy efficiency, cut their fuel bills, and ensure they are on the lowest cost tariff for their circumstances. It will also help identify householders using very low volumes of energy, who could be experiencing fuel poverty. Energy companies must be required to co-ordinate the roll-out of smart meters through the local councils to ensure their programmes link up with other local strategies.

 

15. There is also a potential opportunity to protect the fuel poor from further rises in electricity and gas by providing them with community scale renewables and micro-generation. The Government's renewable energy strategy does not fully consider these opportunities and the potential to use renewable technology to tackle fuel poverty. Finance packages should be developed to support the up-front investment required for these measures by householders or social housing providers.

 

 

The Methods Used to Target Assistance at Households that Need it Most

 

16. To eliminate fuel poverty it is vital that we focus on insulating existing housing stock. Approximately 10 million homes require basic insulation and there are around 7 million "hard-to-treat" homes which need more intensive treatment, such as solid wall insulation. The scale of the work and investment needed is substantial, and the estimate of the total cost for solid wall insulation alone is 35 billion.

 

17. Evidence has shown that market-based initiatives, such as CERT, do not necessarily have the best outcomes for households facing fuel poverty. Through the CERT programme, suppliers have sent out over 200 million energy-saving light bulbs. This has been at the expense of systematic programmes of home insulation which would better help households cut their energy bills and be lifted from fuel poverty.

 

18. Centrally-controlled and funded initiatives are not the best way of tackling fuel poverty on the ground. Councils, with their detailed knowledge of their local area and their connections to households, can help ensure that funds and resources are most effectively targeted to the households that need them most.

 

19. The long term strategy needs to be a commitment to scaling up assistance, delivered in a coordinated area-by-area approach. Local councils and social housing providers have a vital role to play in this delivery. An area-based approach to the installation of basic insulation measures will help to identify those homes that are hard to treat. Tackling hard to treat properties is often more expensive and disruptive so greater progress can only be made if financial packages are offered to homeowners and landlords to enable up front investment.

 

20. Councils are also best-placed to assist households in income maximisation which in many cases can help the household out of fuel poverty. Councils work with householders to ensure they are claiming all the benefits to which they are entitled. For this to happen effectively, households which may be eligible for additional benefits need to be identified and informed. In some cases they also need to be guided through the process of claiming new benefits. Local authorities are experienced in dealing with this work and already undertake assessments as part of the council tax credits system. 

 

21. Co-ordinating area-based energy schemes gives councils ideal opportunities to work with residents to assess their benefit entitlements. With more resources, councils could undertake more personal assessments of whether their residents are entitled to additional benefits. A recent Groundwork survey has demonstrated that councils, not private companies or people working for energy suppliers, are regarded as the natural source of information on benefits and energy matters. This demonstrates that councils are trusted by their residents and therefore have the individual relationships that allow them to work with those most in need effectively[1].

 

Date-Sharing and Information Gathering

 

22. Data-sharing is undoubtedly still a problem. There isn't an accurate database of all households that are either fuel poor or at risk of becoming fuel poor, particularly if they are privately rented or owned houses. Energy Performance Certificate information from energy suppliers should therefore be made available, through the Home Energy Efficiency Database, at an individual house level to help councils target assistance more effectively to those that need it most.

 

23. More information should be shared between energy suppliers and local authorities, particularly on where home energy efficiency measures have been installed under CERT. Local authorities are now performance measured on the CO2 emissions in their areas resulting from the energy consumption of their residents. If local authorities are to plan for how to reduce the energy consumption of their area, they need to know what measures have been installed and where.

 

24. Existing legislation and programmes are insufficient to encourage the private rented sector to act. There needs to be an appropriate regulatory framework to improve private rented accommodation and we would welcome the opportunity to work on this further with the Government.

 

Community Tariffs and Support for Communities off the Gas Grid

 

25. Communities should be able to benefit from local projects. Rural communities off the gas grid are harder to treat and often miss out from insulation programmes and can also face higher bills. While renewable energy generation in their local area will provide significant financial benefits for the generator there may be no benefits for the local community.

 

26. We believe, therefore, that a community tariff should be established so that local residents can benefit from local wind energy generation.

 

27. Homes off the gas grid offer a particular opportunity for renewable energy schemes. To harness these opportunities, we have suggested that local authorities might voluntarily identify themselves as renewable growth points, and benefit from additional support. This would allow the targeting of deployment and the associated subsidies on off gas grid locations.

 

28. We believe there should be additional support for smaller councils, especially rural districts. Some smaller councils struggle to access finance and set up partnerships under programmes, such as CERT, as off-gas grid areas require less standardised and more expensive measures.

 

29. To aid smaller councils, the LGA set up the Carbon Reduction One Stop Shop (CROSS) which allows them easier access to supplier funding. Although 50,000 homes were identified by councils and social housing providers as needing measures, it was extremely disappointing that suppliers chose not to fund these.

 

February 2010



[1] Groundwork Energy Efficiency Survey http://www.groundwork.org.uk/policy--learning/energy-efficiency.aspx