Adam Scorer, Chief Executive of National Energy Action (NEA), comments on Government proposals to improve the Energy Company Obligation (ECO) and extend the Warm Home Discount Scheme
“The recent severe weather underlined the urgency in helping those suffering in fuel poverty. These proposals are a step in the right direction, but the consultations must be a genuine opportunity to extend the safety net to those households who are in great need, but all too often forgotten.
“The most acute gaps are for those fuel poor households in hard to treat, solid wall, homes and for those without functioning central heating. Currently, there is virtually no support provided for heating repairs. These households cannot afford to repair or replace boilers and appliances themselves, neither can they afford the financial contributions that are often required to take part in the ECO scheme. They will have suffered during the cold weather. Government needs to use the consultation period to find practical ways to help them.
”No-one imagines that ECO alone is sufficient in scale to meet the ambition to tackle household carbon emissions and fuel poverty within the Clean Growth Strategy. However, alongside ECO, there are encouraging signs that long-term funding streams – such as public infrastructure capital – may now be actively considered by UK Government. Not only would this help deliver the energy efficiency based fuel poverty targets, improving the quality of life and the quality housing overall, it can contribute towards achieving other important UK Government objectives.”
NEA also welcomes the proposed changes to the Warm Home Discount Scheme which provides energy rebates to the most vulnerable and provides funding for additional programmes that provide advice and support through Industry Initiatives.
Notes to editors
- NEA works to end fuel poverty and tackle exclusion in the energy market across the UK and locally. As well as research, national and local advocacy; a key focus of NEA’s work is to deliver practical solutions to improve the quality of life for those living in cold homes. To achieve this we aim to improve access to energy and debt advice, provide training, support energy efficiency policies, local projects and co-ordinate other related services which can help change lives. NEA also provides the secretariat for the All-Party Parliamentary Fuel Poverty & Energy Efficiency Group to raise awareness of the problem of fuel poverty and the policies needed to eradicate it.
- The Energy Company Obligation (ECO) is currently the only remaining domestic energy efficiency delivery mechanism in England but is also accessible across the rest of Great Britain. The Clean Growth Strategy pledged to extend the levy-funded scheme out to 2028 (with a review in 2022), however the ‘notional annual spend’ on the overall programme has reduced from the original £1.3bn to £640 million. As well as the significantly reduced scale of ECO resources, there has also been a lengthy delay to make ECO a much better targeted scheme. As far back as 2015, the Fuel Poverty Strategy for England stated ECO would be targeted at those living in fuel poverty. NEA estimates the delay to a better targeted ECO policy has already lead to a large shortfall in activity of around £1bn lifetime savings for the poorest households with the highest energy costs over the current 18 month ECO transition period. The better targeting of the ECO policy was also a key recommendation made by the Climate Change Committee (CCC) in their advice to the UK Government on how to meet carbon budgets and mitigate impacts on fuel poverty levels. The consultation document is available once live at https://www.gov.uk/government/consultations/energy-company-obligation-eco3-2018-to-2022.
- The Warm Home Discount provides energy rebates and funding for Industry Initiatives that help to make energy more affordable for the most vulnerable energy consumers.
- During the Coalition Government, NEA welcomed the energy efficiency based Fuel Poverty (England) Regulations 2014 which are a legal requirement the UK Government is still bound by. More recently, NEA also welcomed that these existing commitments were reaffirmed in both the Conservative Manifesto and the Clean Growth Strategy. All other major political parties also set out ambitious plans for ending fuel poverty and dramatically improving energy efficiency in their General Election Manifestos. Whilst the UK Government and the National Infrastructure Commission recognise the benefits of enhancing energy efficiency, the delivery of home energy efficiency improvements has also dramatically slowed since 2012, particularly in England but also across the rest of the UK. According to the Committee on Fuel Poverty (CFP), the Climate Change Committee (CCC) and think tanks such as Policy Exchange current resources are less than half of what is required to meet fuel poverty commitments in England alone. The latest CFP annual report published on 17thOctober 2017 also estimates that if the current remaining investment is netted off (including a better targeted ECO programme), beyond March 2019 £14.4 billion of additional funding will be required to install the necessary energy efficiency measures in fuel poor households in England. As noted above, whilst it is welcome the Government’s stated intention is to shift the current ECO programme towards making a bigger difference for fuel poor households; in isolation this will not provide the required investment to meet current statutory targets or the near-term fuel poverty milestones.
- Currently only 10% of fuel poor households meet the band C requirement in England and whilst progress is being made towards two fuel poverty strategy ‘milestones’ based on current delivery there will still be around 175,000 fuel poor households living in Band F and G properties in England by 2020. Many of the fuel poor households in the worst Band F and G properties will be suffering from the worst extremes of fuel poverty and have annual fuel needs well in excess of £1,000 per year abovethose not living in poverty. NEA has also highlighted how the prolonged loss of space heating in particular has the potential to detrimentally impact on a household’s health and wellbeing, especially during the recent harsh winter and amongst occupants most vulnerable to living in a cold home. A broken or unsafe gas appliance is also likely to prompt the use of secondary heating appliances. Using electric portable heaters is recognised as one of the most expensive forms of heating. Alternatively, alongside poor ventilation, use of combustion room heaters such as LPG and solid fuel fires can significantly increase carbon monoxide (CO) exposure risk. Furthermore, older and unsafe boilers are less energy efficient, increase carbon emissions and lead to heightened risks for nearby neighbours also as a result of CO poisoning or potentially, in extreme situations, fires and gas explosions. In this context, NEA stresses the overlooked opportunity to provide emergency support in the Autumn 2017 Budget will have had hugely damaging consequences this winter (particularly in the recent cold snap) and should be reviewed urgently alongside the Department of Health and Social Care (DHSC).