Cutting the cost of keeping warm: A fuel poverty strategy for England

08 September 2015

Across the last Parliament - overhaul of the framework for fuel poverty in England:

• Independent Hills Review - new understanding of the problem:

New indicator – LIHC - better reflecting the nature of the problem.

Sharper focus on energy efficiency – points to effective policy-making.

• Amended framing legislation - Repealed 2016 target, commitment to a new target in secondary

and a new statutory strategy.

• Strategic Framework – confirmed LIHC, quantified risk factors and set out guiding principles.

• Consultation to prepare for the strategy.

• Fuel Poverty (England) Regulations 2014 – new statutory target.

• £25m Central Heating Fund – meeting a priority delivery gap.

• Strategy – with funding for additional pilot activity.

Overhaul of the framework

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The new fuel poverty target for England

Cutting the cost of keeping warm

The statutory target focuses on improving the energy efficiency of fuel poor homes.

o as many … as is reasonably practicable to Band E by 2020

o as many … as is reasonably practicable to Band D by 2025

A set of wider indicators to paint a detailed picture of progress.

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The strategy sets out non-statutory interim targets to support the trajectory to 2030:

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Who are we trying to help ?

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Vision: To cut bills and increase comfort and well-being in the coldest low income homes, and to achieve the new statutory fuel poverty target

Principles: • Prioritisation of the most severely fuel poor• Supporting the fuel poor with cost-effective policies• Reflecting vulnerability in policy decisions

Cutting the cost of keeping warm

Strategic approach to meeting the target

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Great Homes and Communities Conference - The fuel poverty strategy for England - July 15

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Strategic approach - ChallengesMaking progress means overcoming challenges - summarised as follows:

• improving energy efficiency standards in fuel poor homes;

• working together to help the fuel poor through partnership and learning;

• increasing effective targeting of fuel poor households;

• improving the reach of support to certain high cost homes – such as non-gas or park homes;

• improving the reach of support to certain low income households – such as those who have

health conditions linked to living in a cold home;

• tackling the financial burden of energy bills for those on low incomes;

• ensuring the fuel poor are able to get maximum benefit from a fair and functioning energy

market; and

• enhancing and improving understanding of fuel poverty.

Cutting the cost of keeping warm

Strategic approach – Outcomes

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Community energy is capable of unlocking opportunities for lower energy bills and carbon emissions savings that could otherwise be missed - with solutions developed to meet local needs, involving local people. Government is determined to increase opportunities for communities to get involved in delivering energy efficiency:

• Many community energy projects are thinking about the role they could play in energy efficiency and supporting the fuel poor. DECC is working with the Community Energy Coalition to increase understanding of how community action can support vulnerable and fuel poor households.

• DECC has commissioned research into the role of local groups, including trying to gather more quantitative evidence of the role local actors can play in delivering energy efficiency schemes. The research report will be available later this year.

• DECC have continued funding the Big Energy Saving Network for a third year.

• To incentivise communities to explore innovative approaches to saving energy, DECC launched a £100,000 Community Energy Saving Competition in January 2015 and has awarded 5 organisations grants of up to £20,000. The winning projects will be evaluated to inform understanding of how community-based energy efficiency approaches can tackle fuel poverty.

Cutting the cost of keeping warm

Partnership and learning: community energy

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Current activity continues to demonstrate the strategic approach in action …

Funding for innovative pilot activity across 2015/16: • £1 million of health funding released to scale up 9 existing local ‘warmth-on-

prescription’ type projects, delivering across 15/16. • £25m Central Heating Fund to deliver first time central heating systems; a key policy

gap –bidding closed in June. 81 bids received across over 100 authorities totalling approx. £67m.

• up to £2 million to support local fuel poverty innovation – design underway, informed by a recent stakeholder survey, which revealed support for wide ranging activity across the challenges but particular interest in health and improved targeting – open to bids later in the year.

£1m Big Energy Saving Network year 3

• Funding to support eligible third sector organisations and community groups, deliver help and advice to vulnerable consumers – bidding open until 17 July

Cutting the cost of keeping warm

Strategic approach in action: current activity

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20 Local Authorities were successful in receiving funding under the Central Heating Fund. The best bids had plans to:

What? Install predominantly cost effective condensing boilers Replacing single solid fuel fires or peak electric heaters Where? In larger privately rented, or owner occupied properties In predominantly rural areas Who? Demonstrated that the occupants were low income and had high heating costs How? Had a clear delivery plan including delivery partners and homes identified Evidenced good value for money, often leveraging in money from sources outside of DECC

budgets

Cutting the cost of keeping warm

Strategic approach in action: CHF

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Cutting the cost of keeping warm

Strategic approach in action: what next?

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“I am determined to help keep homes warmer for less, save carbon and meet our important fuel poverty targets. We need a long-term, coherent and affordable policy framework that ensures that Government support is targeted at those who need it most.”

Amber Rudd - Secretary of State for Energy and Climate Change

DECC Orals – 25 June 2015