Independent report recommends review of fuel poverty definition
Two reports by the Scottish Fuel Poverty Strategic Working Group and Scottish Rural Fuel Poverty Task Force have made over 100 recommendations to address the issue of fuel poverty, all of which will now be considered in full by Ministers.
The reports were published alongside a Scottish Government research paper on the likelihood of being fuel poor in rural Scotland to help identify households with a high risk.
The existing definition of fuel poverty, drawn up 15 years ago, states it is where a household has to spend more than 10 per cent of its income, including benefits, in order to maintain a “satisfactory heating regime”. ‘Extreme fuel poverty’ means a household would have to spend more than 20 per cent of its income on energy use.
However, recent research for the Scottish Government indicates that more than half of ‘fuel poor’ households would not be classified as ‘income poor’.
In A Scotland without fuel poverty is a fairer Scotland: Four steps to achieving sustainable, affordable and attainable warmth and energy use for all, the Scottish Fuel Poverty Strategic Working Group suggests that academics could be asked to draw up a more focused definition, taking into account factors such as whether households are burdened by mortgage payments and the variation of heating needs between particular age groups.
For the Strategic Working Group, a review is both timely and warranted given the Scottish Government’s plans to develop a new fuel poverty strategy and respond to the failure to meet the statutory target to eradicate fuel poverty by November 2016.
The report outlines concerns that the current definition is “too broad” and “may be impeding efforts to target those most in need”.
For instance, it argues: “The definition is based on income prior to housing costs rather than disposable income after housing costs which may result in mortgage-free owner occupiers being more likely to be considered as being in fuel poverty than private tenants with high rents.”
However, the report points out advantages of the current definition in that it is easy to understand for stakeholder and the public, it recognises fuel poverty as an issue related to, but distinct from, income poverty and that it highlights disadvantage, poverty and exclusion in rural Scotland.
Potential risks associated with changing the definition were also identified.
The report argues: “Focusing resources only on those who are income and fuel poor may have unintended consequences on the health of individuals, because the measure of income poverty does not always reflect the income requirements to meet basic needs.”
“Also, a change in definition could simply be seen as removing numbers from the problem, while transferring the financial burden to other areas of the public purse (notably the social care system), but not actually solving the problem of not being able to afford heating and other energy use,” it added.
The report suggests that these risks be taken into account when undertaking the review.
Other ‘high level’ recommendations from the Strategic Working Group include the development of a fuel poverty strategy that:
- is firmly based on the principle of social justice and embedded in efforts to create a fairer and more equal society
- addresses all four drivers of fuel poverty: income, energy costs, energy performance, and how energy is used in the home
- establishes collaborative approaches with strong leadership at national and local levels.
The Scottish Rural Fuel Poverty Task Force’s An Action Plan to Deliver Affordable Warmth in Rural Scotland sets out three guiding principles to help the Scottish Government deliver its fuel poverty and energy efficiency programmes which are:
Principle 1: Fairness and social justice should be every household’s right, wherever in urban or rural Scotland they happen to live.
Principle 2: All vulnerable households should receive the most effective practical help and support they need to keep their homes warm and at a cost they can afford.
Principle 3: The progress made by Scottish Government in its strategic approaches to eliminating fuel poverty from peoples’ lives should be set within a statutory framework for delivery which is rigorously measured and held to annual account by the Scottish Parliament.
The report makes recommendations on a range of issues, including the development of personalised outreach support to address fuel poverty problems, greater support for off-gas areas, encouraging and supporting consumers to switch tariff and supplier, and more comprehensive monitoring and evaluation of the impact of fuel poverty schemes in rural Scotland.
Other recommendations from both independent reports include:
- that future programmes have a very specific objective to deal quickly with hard to treat and other poorly performing housing stock occupied by the most financially disadvantaged;
- ‘rural proofing’ the government’s approach to tackling fuel poverty;
- the UK Government to work with Ofgem to ensure regulation of the GB energy market addresses fuel poverty; and
- promotion and support of initiatives by new electricity providers to provide the highest quality energy price and customer care services to prepayment meter consumers.
Housing minister Kevin Stewart said: “Everyone should be able to heat their home and keep themselves and their families warm, therefore tackling and eradicating fuel poverty is vital and we must make sure action we are taking is making a difference to those that need it most.
“The advice is clear that the current definition is unhelpful in ensuring support is delivered to those who need it most. That is why, I will take immediate and decisive action to take forward the recommendation on reviewing the definition of fuel poverty and set up the expert independent review called for. However I am clear that I will not define away the problem and the changes must be justified to ensure that those in need receive the most support.
“We are committed to eradicating fuel poverty. Since 2008 over one million energy efficiency measures have been installed in almost one million households across Scotland which has helped make homes warmer and easier to heat. We will build on this by investing half a billion pounds over the next four years to continue tackling fuel poverty and improving energy efficiency.
“Over 100 recommendations have been made, many of which are complex and have wider implications that must be considered alongside other policies. All of this cannot happen immediately but both reports are a good first step in informing our new fuel poverty strategy and we will respond fully in due course.
“I would like to thank Professor David Sigsworth OBE, Mr Di Alexander and the members of both groups for their work in producing these reports.”
David Sigsworth, chair of the Scottish Fuel poverty Strategic Working Group, said: “The independent group was tasked with developing a vision for the eradication of fuel poverty in Scotland, with the main output being a report outlining a new fuel poverty programme.
“The report explores why current programmes have failed to eradicate fuel poverty and concludes that experience over many years has shown that energy efficiency improvements, whilst important, are not enough. Recent increases in underlying costs of fossil fuel, due to devaluation, will exacerbate this situation.
“The group recommends a bold new approach, based on four high level principles, to deliver affordable and attainable warmth and energy use for everyone in Scotland.
“The new policy should be firmly based on the principle of social justice and use new devolved social security powers to address well-known unfairness in current provisions. It must also go beyond improving energy performance of homes and put equal emphasis on the other three drivers of fuel poverty - income, energy costs, and how energy is used in the home. The report makes detailed recommendations in each of these areas and argues there is much that that the Scottish government can achieve.
“Governance of the new policy is also considered at length along with firm requirements for monitoring, evaluation and ongoing scrutiny.”
Scottish Rural Fuel Poverty Task Force chairman, Di Alexander, added: “Fuel poverty is still affecting far too many rural households (50 per cent) and a major step change is required if the target of eliminating fuel poverty in both rural and urban Scotland, within a clearly defined timescale, is going to be achieved.
“The Task Force’s Action Plan sets out realistic and practical steps that could and should be taken to deliver this outcome. They are based on prioritising the needs of all vulnerable and fuel poor households, with a clear focus on those living in what are predominantly off-gas, rural and remote areas where heating bills are typically much higher than average.
“Both Governments, Ofgem and major utility companies like SSE and Scottish Power have crucial roles to play in ensuring rural Scotland gets a much better deal than it’s getting at present and in helping to ensure that vulnerable households receive the quality outreach services they need to be able to live in affordable warmth and dignity in their homes, wherever they are located.”