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6. A Redesigned Fuel Poverty Programme for the Future
We recommend a redesigned future fuel poverty programme - an 'Energy Assistance Package', aimed at helping the fuel poor in Scotland in a holistic way, building on existing advice networks, with greater integration of funding streams and with energy companies contributing to the package and Government concentrating on areas that cannot be funded through CERT or other sources.
The Package would have the following stages:
- Initial advice - telephone check;
- Follow up tailored assistance on all three aspects of fuel poverty; and
- Assistance with installation of physical energy efficiency measures - both standard measures that will be cost effective carbon reducing measures to be funded under CERT or other sources, and other more enhanced measures.
Whilst we are illustrating these as separate stages, the organising principle is integration of the whole. We would see, for example, stages 1 and 2 being closely integrated and delivered together where possible; likewise stages 3 and 4.
ENERGY ASSISTANCE PACKAGE
A number of key questions were raised around any redesigned programme:
- Who? Who to reach, how to identify the fuel poor?
- What? What measures to offer the fuel poor?
- How? How to deliver the measures?
- Impact? What is the impact on fuel poverty?
Each of these questions is considered within the format of the increasing filtering shown in Diagram 1, setting out a series of options of approach to address individual circumstances with tailored responses.
Stage 1. Initial Advice
Who?
All would be encouraged to ring - this will be a universal service, fully accessible (for example, to include language interpretation and Typetalk) and available to all those who are fuel poor and those who are not. If the household is unlikely to be fuel poor, they will be passported to a CERT provider. At least one of the elements of tailored assistance will be available for all those most likely to be fuel poor.
What?
This would be an initial telephone advice covering both fuel poverty and energy efficiency objectives, in which households vulnerable to fuel poverty would be captured and referred on to the next stages, offering follow up of benefit and tax credit check, tariff check and energy efficiency check. The script for this initial contact would cover low income, high energy spend and energy efficiency of the home. Those who are clearly not fuel poor would be encouraged to take up CERT measures and signposted to available loan schemes. We believe this fits well within the wider objective of joining up advice services.
In addition to a publicised self-referral phone-line, agencies would be supported to make third party referrals to this service - e.g. local authorities and health authorities where individuals have been hospitalised for cold-related illnesses (such as Warm and Well in Edinburgh), home visitors of any sort, carer organisations, other advice services, and landlords. There would also be direct links to other support outwith the package
While the majority of initial contacts would be through the telephone advice service, there would also be a door-to-door service in areas where a high incidence of fuel poverty is identified (e.g. through Local Housing Strategy, Energy Saving Trust ward maps or other means). We believe this approach has potential for synergy with the £350m Community Energy Saving Programme funded by the energy companies and recently announced by the UK Government.
How?
A cost effective way of delivering this must be put in place. There must be a system to ensure the quality of advice, such as the provider(s) must be accredited under the Scottish National Standards for Information and Advice Providers 9. There must also be programmes of awareness raising. Training and support will be required for third parties to know to refer their customers or contacts into the universal scheme.
We see distinct advantages of a regional approach with national overview and believe this will be the most effective way to identify and address the fuel poor. To avoid duplication of existing Scottish Government funded networks and build on existing practice, this should be delivered by the existing ESSac network. It is essential that there is tightly integrated management and operation of the 4 stages, as these cannot be effectively delivered through one organisation; the integration across different parts must be seamless in operation for the customers.
Impact?
The package would aim to have contact with around 15% of Scottish households, or c350,000 each year. The number of contacts received, and the number and direction of follow-ups, would be monitored and recorded. We anticipate more than one-third of the contacts may be identified as fuel poor, and taken forward to Stage 2.
Stage 2. Follow up assistance
Who?
This service would be available to all those vulnerable to fuel poverty identified through the initial check at Stage 1.
What?
This would be closely integrated with Stage 1 initial advice (possibly within the same phone call), and would comprise follow-up assistance, covering help with benefit and tax credit claims, checking eligibility for social tariff, and a home energy audit as appropriate. Follow- up might be either by telephone or face to face depending on individual requirements.
How?
This should be delivered through the ESSac network in an integrated partnership with others, making use of the expertise available (e.g. Scottish Helpline for Older People and Citizens Advice Direct for benefits and tax credits check, and building on the experience from the Central Heating and Warm Deal Programmes). It should link into advice already offered by local authorities and other agencies.
In developing advice on the tariffs check, the current pilot in England, being conducted by eaga and due to report in October, could be built upon. We would also want to provide for switching between suppliers. Again, quality of advice must be assured, such as through providers being accredited under the Scottish National Standards, and advice must be available in different formats to be accessible, e.g. for visually impaired, hard of hearing, other languages etc.
Impact?
This would aim to build up to assisting 5% of Scottish households, c115, 000 each year (i.e. one third of initial contacts). We would expect significant impact in maximising income through benefit and tax credit uptake and in reducing energy bills. For each case, estimates of the increase in benefits and tax credits claimed, saving in annual energy bills from the tariff check and saving in energy bills and carbon from energy audit would be recorded. This will require significant feedback information loops. The costs and benefits of telephone service referrals and the door to door approach would be evaluated through a programme of call-backs to a representative sample within 12 months to judge long term impact.
Stage 3. Energy efficiency - Standard Measures
Who?
For these purposes those in fuel poverty would be defined as those in the CERT priority group with the exception of those over 70 who are not on the guarantee element of pension credit.
What?
A standard package of energy efficiency measures would be delivered to each house, covering the most cost effective measures - loft insulation, water tank insulation, cavity wall insulation, and draught proofing; other measures, e.g. real time displays, would be added if changes are made to allow these under CERT. Those in fuel poverty would be guaranteed access to this package at no cost to the customer, while others would be referred on at Stage 1 or 2 to appropriate help, which might include subsidised insulation measures under CERT or financial loans, grants or other assistance.
How?
Effective functioning of this depends on the energy companies' agreement, through a national collective approach agreed as part of the ongoing work of the CERT strategy steering group. We would expect that energy companies would be able to commit jointly to funding cavity wall insulation and loft top-ups for every referral of a fuel poor household throughout Scotland up to 2011, i.e. commit to meet all demand. If other standard insulation measures are not funded under CERT, other means to fund and deliver these will be required. Government could provide some back-up funding in particular circumstances to the non fuel poor, e.g. where subsidy is required to prevent one householder in a tenement or 4 in a block stopping measures being undertaken.
Impact?
This process would aim to assist all fuel poor households that can take CERT measures, perhaps 2% or 40,000 households, for whom we would expect a significant reduction in energy bills, and increase in energy efficiency of their homes. Standardised carbon and energy bill savings would be recorded from each measure, and there would be "before and after" assessments for a representative sample to assess actual carbon and energy savings.
Stage 4. Energy efficiency - Enhanced Measures
Who?
We believe that the 2016 target can only be met if all those who receive current Warm Deal benefits and remain fuel poor after Stage 3 have access to an enhanced package. However, due to currently limited resources, we recommend those most affected by fuel poverty are prioritised in the short term rather than assigning priority on a first come first served basis.
We recommend that in the short term the programme should prioritise those who receive Warm Deal benefits and live in a private sector house which has poor energy efficiency. We propose that energy inefficient houses are defined as where an energy audit has shown that the performance of house is rated as an F or G on an Energy Performance Certificate. We expect this to pick up hard to treat homes and those without central heating systems.
The Forum recognises that improving the performance of such properties will potentially be expensive and will not on its own take all of these households out of fuel poverty; however the SHCS shows that the combination of claiming these welfare benefits and living in a home with very poor energy efficiency is a good proxy for fuel poverty.
Within this group, we recommend prioritising those in energy inefficient homes who are most seriously impacted by fuel poverty. As a starting point, we would suggest prioritising the following groups: low-income families with children under 5 and/or with children with disabilities under 16 and on income support or maximum child tax credit; households in which someone receives both Disability Living Allowance and Council tax benefit; and those over 60 who are in receipt of the guarantee element of pension credit. These criteria should be reviewed annually.
There is a concern that some people with acute or pre-existing health conditions could be affected by cold or damp housing and may not be included in the above groups. We would want these to be included but further work is needed to define who these are. Some element of fast tracking will always be needed, for those in most urgent need. As at Stage 3, there would have to be flexibility in mixed tenure buildings.
Under this Package more fuel poor households will be reached than under the existing Programmes; also more fuel poor households will be reached in Stage 4 and the measures will be more effective at alleviating fuel poverty. There is a further need to explore equity release schemes and/or development of the Scheme of Assistance 10 process for those who are not entitled to help under Stage 4.
What?
This stage would cover a range of enhanced energy efficiency measures beyond the standard CERT-funded insulation available under Stage 3 above for private sector households. It would be a more concentrated intervention focussing on a small number of households but, as it is focussed on the fuel poor, it will reach a higher percentage of fuel poor households than current programmes. The measures offered will be very varied and offered on a tailored basis to suit the requirements of individual properties; these may include energy efficient appliances, boiler renewals, hard to treat insulation measures and central heating systems with condensing boilers, but the approach would be flexible, so that, for example, other measures could be added easily at a later date if an efficiency case could be made. Renewable heating systems and external and internal wall insulation would be available for the fuel poor who are off the gas grid, and assistance for mobile homes and caravans would be included. We recommend appropriate, cost effective measures for each home are provided.
To ensure geographical spread, regional budgets should be set or a target set for the number of houses to be assisted in each region, based on the proportion of Scotland's fuel poor in each region according to the latest SHCS results.
How?
A cost effective way of delivering this is essential; we believe that may be through a managing agent on behalf of Government either nationally or regionally. Regional delivery with national standards would allow greater flexibility to target resources in areas of greatest need.
Delivery would require partnership between a CERT provider and Government for those elements, where partial carbon savings could be claimed under CERT, but would not be cost effective for the energy company alone.
It may be necessary to use 2009/10 as a transition year in which to continue the current CHP and Warm Deal arrangements whilst the new Energy Assistance Package gears up.
We welcome the National Lending Unit being set up over the next 18 months under provisions in the 1988 Housing Act, which will be able to provide standard and subsidised loans, where home owners borrow against the house and repay on sale. This could be extended to provide a vehicle for energy efficiency loans.
Further research and development are needed to trial alternative measures which could be added to the package of measures at a later stage. Specifically, pilot studies are required to address fuel poverty in tenements, and in tower blocks.
The proactive approach in selected areas with a high incidence of fuel poverty has potential for including the option of a street by street area-based intervention.
Impact?
This stage would aim to have a significant impact on a number of homes each year, householders could expect a significant reduction in energy bills, and increase in energy efficiency of their homes. We expect a significantly higher proportion of these households to be fuel poor than under existing programmes, so that the absolute number of fuel poor households reached should be higher. For comparison, on the latest Survey statistics, the Central Heating Programme may have reached fewer than 6,000 fuel poor households last year, whereas more than two thirds of the groups set out as the priority for Stage 4 above would be fuel poor households, over 7000 of the total likely to be assisted each year. A 'before and after' fuel poverty assessment would be carried out for all dwellings and measures would be revised in the light of these results.
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