19 Oct 2021

The worsening energy crisis - what more needs to be done to tackle fuel poverty?

UK homes account for more than a fifth of all carbon dioxide emissions, we are facing the biggest ever increase to the energy cap and the countdown to COP26 is on with less than two weeks to go.

Alexandra Gibson, policy and practice officer at CIH, looks at the new plan and explains what must be done to prevent the worsening crisis of fuel poverty.

A warm and comfortable home is a basic human right. The growing energy crisis is more than just a ‘problem’ in the energy sector; so many people are struggling with cold homes in the UK, causing social exclusion, ill physical and mental health, and needless winter deaths.

Lots of people will have seen the media coverage about energy shortages and the impending fuel price increase, and this will have a further detrimental impact on mental health. Heating your home isn’t cheap and with the increasing price of energy it is going to be a difficult time for many people. That is before we even factor in the devastating impact of the end to the Universal Credit uplift.

So what’s new? Ministers are to set a “target” for all new heating systems installed in the UK to use either low-carbon technologies or fuels by 2035, but there will be no outright ban on boilers. The announcement of a £5,000-per-household grant is part of the bigger £3.9bn to aid in the decarbonisation of the UK’s housing stock, with the aim of the cash to allow households to install measure such as heat-pumps. The Energy Efficiency Infrastructure Group previously calculated a £6,000 grant per household would be needed to install a heat pump, cutting these commitments short once again. The government is also launching a £60m innovation fund to help make clean-heat systems small, easier to install and cheaper to run, and has confirmed it will looks at ways to ‘shift various environment levies away from electricity bills and on to gas bills’ to encourage consumers to switch to electric heat pumps.

The £3.9bn package includes money for four existing programmes:

  • £1.4bn for the Public Sector Decarbonisation Scheme
  • £950m for the Home Upgrade Grant scheme
  • £800m for the Social Housing Decarbonisation Fund
  • £338m for the Heat Network Transformation Programme.

A recent BEIS Committee on Fuel Poverty report has revealed that only 15% of recent funding to improve energy efficiency and help with fuel costs actually went to fuel poor households.  Unfortunately, the plans announced within the Heat and Building strategy continue to leave millions living on the lowest incomes in the least energy efficient homes.

The report highlights how the government must commit to alleviate the rapidly growing fuel poverty crisis. The report places emphasis on that while there has been clear political support for subsidies for high energy use firms, there is a deafening silence on what support will be available for the millions of people facing fuel poverty this coming winter.

The Government has also announced an emergency Winter Household Support Fund to be delivered via local authorities. While additional short-term energy debt relief measures like this are welcome, this feels like another knee-jerk reaction to the emerging headlines of rising energy costs and a far cry from what is really needed.

The End Fuel Poverty Coalition have set out what additional short-term energy debt relief measures should be put in place, which includes winter fuel payments for those who are eligible for the cold weather payment, meaning extending the payment to broadly the same cohort who are eligible for the Warm Home Discount. This includes households in receipt of Pension Credit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance as well as Universal Credit. They believe that this should help an additional 2.6 million households across the UK and if paid at the higher level this would help counter the recent rise in energy prices covered by the Ofgem price cap.

These short-term changes will buy the government more time in which they must work out a longer-term solution which will be crucial from 1 April when the price cap is increased again.

We need urgent action from government to maintain support for people in vulnerable circumstances and we have outlined how this looks in our recent Autumn Cliff Edge report and submission to the Autumn Spending Review. With COP26 due to take place in two weeks’ time, we urge government to plan for a just transition to net zero - to ensure that any decarbonisation process is fair, especially for those who are vulnerable or already in fuel poverty. This would mean that the advantages from the shift to net zero are shared widely, and the necessary support put in place for those who face losing out economically. It would also mean targeted support for the areas worst affected by fuel poverty. We push for longer-term action-led policy to ensure that fuel poor households across the country can be warm in their own homes, not just this winter but long into the future.

As housing professionals, what can we do to help?

There is going to be an influx of demand from people needing support with domestic heating costs and housing providers are in a good position to signpost and/or offer energy saving advice where possible. This could include tips for people worried about their energy supplier or switching as prices skyrocket. By working with charities, community groups and local health bodies, housing providers can identify and support those most at risk from the negative impacts of fuel poverty and let tenants know what options are available.

Useful links:

Best practice – Stockport Homes Energy Advice Team: https://www.stockporthomes.org/advice-and-support/my-money/homes-at-the-heart-energy-advice/

National Energy Action: https://www.nea.org.uk/

End Fuel Poverty Coalition: http://www.endfuelpoverty.org.uk/