The Scottish Government

« Previous | Contents | Next »

Listen

The Scottish Executive's Central Heating Programme and the Warm Deal

Annual Report 2002 2003

Benefits from the Central Heating Programme and the Warm Deal in Scotland 2002/2003

This is the fourth annual report on the benefit of schemes to improve energy efficiency in Scotland, funded by the Scottish Executive. This report contains the results of the Central Heating Programme and the Warm Deal in 2002/2003.

The Central Heating Programme improves the energy efficiency of the homes of the over 60s who do not have central heating or whose heating system is irreparably broken, and also for families living in homes rented from local authorities and housing associations where there is no central heating. This is done by the installation of an energy-efficient central heating system and insulation measures.

The Warm Deal improves the energy efficiency of the homes of low-income families.

In addition to tackling one of the main causes of fuel poverty, homes with a poor energy efficiency, both of these programmes also contribute to health and environmental objectives. Homes that are easier to heat, will lower the incidence of cold-related illnesses and reduce emissions of carbon dioxide (CO ₂), the primary cause climate change caused by human activity.

The Central Heating Programme in 2002/2003 resulted in:

• central heating being installed in 11,220 dwellings;
• an increase in the average NHER of properties from 3.5 to 6.8;
• predicted reduction in average annual fuel bills of 470 for the over 60s and 249 for local authority and housing association tenants;
• a predicted annual reduction in CO ₂ emissions of 30,710 tonnes;
• using the data gathered by EAGA, before improvements, approximately two-thirds of pensioner households would have to spend more than 500 a year to achieve the sheltered heating regime. After improvement, approximately three-quarters will be able to achieve the sheltered heating regime, for less than 10% of the pensioners minimum income guarantee and therefore will no longer be at risk of fuel poverty, although more detailed research has been commissioned by the Executive to confirm this, which will be published in 2004.

The Warm Deal 2002/2003 resulted in:

• 30,076 dwellings being improved;
• an increase in the average NHER of 0.6, ranging from 0.7 for tenants of private landlords to 0.3 for tenants of housing associations;
• an increase in the average NHER of 1.4 in properties improved by local authorities (although this is based on limited data)
• predicted reduction in average annual fuel bills of 126 for tenants of private landlords to 30 for tenants of housing associations;
• a predicted annual reduction in CO ₂ emissions of 29,949 tonnes;
• 193 New Deal places created for the long-term unemployed.

Description and history of the Warm Deal

The Scottish Executive's Warm Deal comes in two parts:

• The largest part is administered for the Scottish Executive by a company called EAGA Partnership Ltd and covers all tenures of housing.
• Local authorities administer the other part for works to their own stock.

Warm Deal (as administered by EAGA)

This part of the Warm Deal was introduced on 1 July 1999. Households are eligible providing they are normally in receipt of one or more state benefits. A smaller grant of up to 125 is available for pensioner households not on benefit. Households can have any combination of works from the following package, up to a maximum of 500:

• cavity wall insulation;
• loft insulation;
• hot and cold tank insulation;
• pipe insulation;
• draught proofing;
• energy advice and up to 4 energy efficient lightbulbs.

The scheme covers all sectors of the stock and provides places for New Deal trainees. 8.375 million was spent by Eaga in 2002/2003.

Warm Deal (as administered by Local Authorities)

Local authorities run this part of the scheme for their own stock. It allows them to install the same range of measures described above. The programme is funded by cash grant from the Scottish Executive and 962,000was spent on grants in 2002/2003. Table 1 lists the local authorities that took part in the Warm Deal in 2002/2003.

Table 1

A number of authorities supplemented their cash grant with funding from other sources such as the Housing Revenue Account; useable receipts and rent surpluses; EC Social Funding and partnership with the power companies under the Energy Efficiency Commitment.

Description and history of the Central Heating Programme

The Scottish Executive's Central Heating Programme was introduced in 2001/2002 and is now in its second year. It comes in two parts:

• EAGA Partnership administer the part of the programme for households in the private sector who are aged 60 or more and lack central heating, or who have a heating system which is broken and beyond repair;
• Social sector landlords (local authorities and housing associations) deliver the part of the Programme for their tenants whose home lacks any central heating system.

Priority

Under both parts of the programme priority is given, where it is practicable to do so, to the over 75s; those living alone, and the disabled.

Targets

The Executive has stated that it will meet the following targets:

• all local authority stock that lacks central heating is to have it by 31 March 2004;
• all housing association stock which lacks central heating is to have it during 2004 except Glasgow Housing Association;
• provide an estimated 40,000 owner-occupiers and private renters without central heating with a central heating system by March 2006. By March 2003, 9,060 heating systems had been installed.

The package

Under both parts of the Programme beneficiaries receive:

• an efficient and modern central heating system (from a choice of gas, electric, oil or solid fuel);
• insulation (where possible - cavity wall fill, lagging of boiler and pipes, loft insulation, draft exclusion measures);
• if appropriate - safety alarms (carbon monoxide detector, a smoke alarm and a cold alarm);
• advice on energy use and the option of receiving a benefit entitlement check.

The Central Heating Programme (administered by EAGA)

EAGA installed the central heating package described in the paragraph above in 5,500 homes across Scotland at a cost of 15.4 million.

The Central Heating Programme (administered by local authorities and housing associations)

Local authorities and housing associations continue to play a significant role in delivering the Central Heating Programme. They were paid a cash grant by the Scottish Executive and by Communities Scotland (formerly Scottish Homes) respectively for each house in which the central heating package was to be installed.

15 of the 32 local authorities and 37 housing associations in Scotland participated in the programme and together, local authorities and housing associations were responsible for more than half of the installations completed in 2002/2003. In line with one of the key priorities of the programme, consideration was also given to maximising the number of installations to members of priority household groups.

Local authority participation

10.1 million was spent by local authorities on grants in 2002/2003 which installed the package described at paragraph 4 in 4,085 properties. Table 2 list the participating local authorities.

Table 2

Participation by housing associations

Housing associations spent 4.05 million under the Central Heating Programme and installed the package in 1,635 properties.

Results of the Central Heating Programme

This section describes the results of the Central Heating Programme delivered by housing association, local authorities and EAGA. As part of this programme energy surveys of the properties were completed prior to and after the installation of improvement measures enabling a detailed analysis of the whole programme to be carried out.

The Central Heating Programme funds the installation of a central heating system and insulation measures for two groups of households:

Households in the private sector (owner-occupiers and those who rent from a private landlord) with one or more of the occupants aged over 60, which had no central heating system or the system was irreparably broken. These properties were improved by EAGA.

Households in the public sector, rented from either a local authority or housing association, which had no central heating system. There is no age criterion for the occupants of these dwellings. These properties were improved by local authorities and housing associations.

Types of households

More than half of the properties improved by EAGA had one pensioner living in the property, while in a third of properties (30%) two pensioners were present. In the remaining 20% of properties the occupant(s) were over 60 but not yet receiving a pension.

Figure 1 shows the numbers of households living in public sector properties for which details of the occupants were recorded. Approximately, a third of the properties (32%) improved by local authorities and housing associations included a pensioner in the household. Added to the properties improved by EAGA, this means that 6,174 households (55% of all the properties improved), that included at least one pensioner, benefited from the installation of central heating in their home under this programme.

Number of properties improved

A total of 11,220 properties were improved under the Central Heating Programme during 2002/2003. Figure 2 shows the tenure of these properties. EAGA carried out the improvements in 5,500 (49%) of these. The other 5,715 (51%) properties improved were in the public sector.

Figure 1

Figure 2

Description of properties improved under the Central Heating Programme

Figure 3 shows a breakdown of the built form of properties improved under the Central Heating Programme. ¹ Flats and maisonettes accounted for just over half (52%) of the properties improved.

When built form and tenure are compared, housing association and local authority properties were much more likely to be flats than owner-occupied and privately rented properties: 60% against 40%. Owner-occupied and privately rented properties were more likely to be detached (14%) or semi-detached (18%), than those in the public sector, where detached properties accounted for 0.6% and semi-detached 10% of improved properties.

Figure 4 shows the periods of construction of the properties improved under the Central Heating Programme. ²

Private sector properties (owner-occupiers and private-rented) tend to be older than public sector ones. More than half (59%) of private properties improved were constructed before 1950, whereas in the public sector properties just over a third (35%) were constructed before this date. ³

Fuel used in heating the home

Figure 5 shows the types of fuels used to provide heating in the home before the installation of central heating. Nearly one-third of properties (32%) were using the most expensive fuel for heating - on-peak electricity. This can be compared with the data in Figure 6 which shows the fuel used for heating after improvements have been carried out, where no homes are heated using on-peak electricity. Comparison between the two figures also shows a significant decline in the proportion of homes heated with solid fuel, from 10% to less than 1%.

Before improvement work, solid fuel use was the most commonly used fuel among private-rented households (35%) and significantly higher than in other tenures: 12% among owner-occupiers, 7% in local authority properties and 3% in housing association dwellings.

Figure 3

Figure 4

Figure 5

Figure 6

Effect of Central Heating Programme improvements

The effect of improvements on the energy efficiency of the homes can be measured using the National Home Energy Rating (NHER). This is a scale from 0 to 10, where 0 is a very energy-inefficient property and 10 an efficient one. ⁴

Of the 5,720 local authority and housing association properties an NHER could be calculated 5,416 (95%). For 5,500 properties improved by EAGA ratings were calculated for 5,122 (93%).

Before the installation of central heating and insulation, the average NHER of homes improved under the Central Heating Programme was 3.5 (median NHER 3.2). After improvements the average NHER increased by 3.3 (from 3.5 to 6.8), and the median by 4.1 (from 3.2 to 7.3). This compares with a median NHER of 6 for all homes in Scotland reported in the 2002 Scottish House Condition Survey.

Properties can also be grouped together in bands as shown in Table 3. Figure 7 and Figure 8 show the percentages of properties falling into each band before and after improvements were carried out.

Table 3

Figure 7

Figure 8

Effect of improvements on predicted emissions and running costs

Total emissions of CO ₂ are predicted to be reduced by 30,710 per year (a reduction of 33%). By comparison the UK is committed to achieving a 20% reduction in CO ₂ emissions by 2010. ⁵

Emissions of nitrous oxides (NOx) and sulphur dioxide (SOx) are predicted to fall by a total of 241 tonnes per year and 427 tonnes per year respectively. ⁶

The predicted expenditure on fuel is the annual expenditure required to light and heat the dwelling to the standard heating regime. This cost fell by 357 a year on average, from 887 to 530 a year (a 40% reduction) in homes improved under the Central Heating Programme. ⁷

How the benefits are taken

Improvements in energy efficiency can be realised in lower fuel bills, resulting in lower emissions of pollutants as outlined above, or they can be realised as a higher level of heating (higher temperatures or more of the home being heated) for the same level of expenditure, or a combination of both. The homes that have been improved under the Central Heating Programme were only partially heated before intervention, in most cases only one room had heating (where more than one room was heated, heating was provided by independent systems). It is possible therefore that households will use much of the increased efficiency to achieve a higher level or heating and comfort. The benefits will then be realised as an improved home environment and potentially improved levels of health. This in turn means that actual spend on heating and the emissions of pollutants after improvements will be higher than the predictions made in this report.

The Scottish Executive has commissioned more detailed research to explore exactly how the benefits of a more energy efficient home are taken by the occupants, to explore the effects on fuel poverty of the programme, and to explore the effects of the Programme on the health of the occupants.

Effects on NHER by tenure

As was the case in the previous year, when the proportion of each tenure rated as NHER 'poor' is compared (Figure 9), privately rented and owner occupier properties are shown to be the worst prior to improvement.

Figure 10 shows the change in NHER by tenure. After improvements, the average NHER for public sector properties increased by 3.2 to 7: the average NHER for private sector properties increased by 3.4 to 6.6.

Effects on running costs

Figure 11 shows households which have benefited from improvements to their home under the Central Heating Programme grouped by predicted annual expenditure on fuel before and after improvements. For example, before improvement more than a third of households (36%) would have to spend more than 900 a year to adequately heat their homes, after improvements this fell to 8%.

Before improvement, privately rented properties were on average the most expensive to heat homes, costing around 1,200 per year on average. Housing associations properties were the cheapest, costing 551 per year on average to heat, while local authority properties cost 718 a year on average and owner-occupier homes cost 1,107 a year on average.

After improvement, private-rented properties show the biggest reduction in heating costs of 527 a year, with costs for owner-occupiers falling by 460 per property per year. For local authority tenants fuel costs are predicted to fall by 284 a year and for housing association properties the reduction is 168 a year.

Differences between urban and rural areas

The table below shows the number of installations completed in urban and rural locations, based on the property postcodes. ⁸

Table 4

Figure 12 compares the types of heating systems installed in each area, which shows that properties in a rural location were less likely to have a gas-fired system installed than urban properties.

Figure 13 shows the change in the average NHER for urban and rural areas.

Figure 9

Figure 10

Figure 11

Figure 12

Figure 13

Figure 14 shows the change in the average predicted expenditure on fuel in each location. While the difference between the NHER of rural and urban properties prior to improvement is relatively small (0.6), there is a considerable difference in the fuel expenditure, with rural expenditure twice as great as the average for an urban home due to the size of the dwellings in rural areas, which are on average 20m2 larger than urban dwellings.

Figure 14

Heating costs for pensioners

The Central Heating Programme administered by EAGA is targeted at the over 60s. These households usually require a higher degree of warmth than the under 60s in order to stay healthy. The heating regime assumed for these households when modelling is referred to as the sheltered heating regime and is assumed to be 23oC in all areas of the home for 16 hours a day, 7 days a week.

Using the data gathered by EAGA, before improvements, approximately two-thirds of these households would have to spend more than 500 a year to achieve the sheltered heating regime. After improvement, more than half require to spend less than 500 a year to achieve the sheltered heating regime. ⁹

For a household to be considered fuel poor, it would have to spend 10% or more of its income on all household fuel use. Given that the Minimum Income Guarantee for Pensioners in 2002/2003 was 5,103 a year for a single pensioner and 7,789 for a pensioner couple, it is likely therefore that around three quarters of pensioner households that have benefited from Central Heating Programme improvements will no longer be at risk of fuel poverty. ¹⁰ This is the same proportion as last year.

However, the data gathered as part of survey to assess improvements required are not of sufficient detail to enable accurate modelling of the expenditure on fuel and therefore the number of households at risk of fuel poverty before and after improvements. The Scottish Executive has commissioned more detailed research, which will show the effects of the Central Heating Programme on levels of fuel poverty. This will be published in 2004.

« Previous | Contents | Next »