In 2001, the UK Fuel Poverty Strategy made a commitment to eliminate fuel poverty within a decade. Achieving this will require a significant improvement on existing levels of progress. A number of different national energy programmes offer substantial scope to make progress in this area but currently prioritise other outcomes. As a result, their potential to eliminate fuel poverty is not being realised.
Key research Question
The study aimed to investigate how the existing Warm Front programme could be adjusted to optimise its impact on fuel poverty. Taking as its starting point recommendations from the National Audit Office, it proposes several options for improving the effectiveness of this programme.
Summary of activity
The project analysed data for 350,000 recipients of Warm Front Grants and compared these with samples from the English House Condition Survey. Data from both sources were fed into a microsimulation model, which sought to quantify the impact of Warm Front on fuel poverty and then calculate any differences generated by altering the design of the scheme.
Most recipients of Warm Front Grants are not fuel poor, and the data analysis questions the more positive results of other reports. The households at most risk of fuel poverty are notably underrepresented among recipients of Warm Front Grants, and their proportion is declining. These include single pensioners, occupants of less energy-efficient dwellings and low-income households.
However, not all those who are eligible under the existing criteria are applying. The current self-selection process is not ensuring that enough of the most fuel poor households apply, which is reducing the impact of the scheme.
The study identifies several factors that may be contributing to this apparent underperformance. These include shortcomings in the benefits-based eligibility criteria and the way income is measured, turnover in the ‘fuel poor population’ and an unequal geographical distribution of grants.
The simulation model suggests that over the four years 2000–04 Warm Front had the potential to reduce the proportion of private sector households in fuel poverty by 7%, and it could achieve a reduction of 15% over eight years. This percentage could be greater with better targeting, but even if 100% of grants went to fuel poor households the maximum reduction would be 40%.
The study proposes two main ways in which Warm Front could be modified to boost its impact on fuel poverty:
Firstly, stricter criteria for accessing Warm Front Grants should be introduced in order to ensure that a higher proportion of recipients are fuel poor. These should exclude households not in receipt of means-tested benefits and homes already rated as energy-efficient or meeting the Decent Homes Standard, and a greater share should be directed towards single pensioners meeting the criteria. An average Standard Assessment Procedure (SAP) improvement target should be included to direct resources towards the worst performing homes.
The second option is more far-reaching and would involve placing major restrictions on which households qualify for grants, moving away from self-selection to a more centralised process. An example of a suggested inclusion criterion is properties with an SAP rating of 30 or less, or there may be a requirement that all applicants be assessed to identify those who are actually fuel poor. This could have a dramatic impact on fuel poverty, but the costs may be prohibitive.
More research is needed to understand the reasons why certain types of household, such as single pensioners, are not applying for grants.