As energy bills rise, how can fuel poverty be tackled in the UK?

Helen Garrett, National Government Data & Insights Lead.

Rising energy bills are set to widen the fuel poverty gap by 15.7% in 2022 and BRE believes that interpreting data and insight are the key to targeting fuel poverty. The latest fuel poverty data, which we produced for the UK Government, reveals the household groups who are most at risk of experiencing fuel poverty in England.

A household is classified as being fuel poor in England when it has both a low income (after fuel costs are considered) and low energy efficiency. This is measured using the methodology defined by the Low Income, Low Energy Efficiency (LILEE) indicator. Additionally, the fuel poverty gap measures the reduction needed in the household fuel costs to remove the household from fuel poverty.

An important finding for the Government’s levelling up agenda is that the likelihood of a household experiencing fuel poverty continues to vary across England. In 2020, the West Midlands was calculated to have the highest proportion of fuel poor households at 17.8% compared with 8.6% in the South East.

The groups who remain more likely to experience fuel poverty are:

• Younger households aged 16-24 (28% compared with 8-16% of all other age groups)
• Single parent households (26.5%)
• Private renters (25%)
• Households living in uninsulated homes (22.5%)
• Households living in the oldest homes(21.7%)
• Ethnic minority households (19.1% compared with 12.6% of White households)

 

Many of these findings are related. For example, younger households are more likely to be privately renting, and around a third of the private rented sector stock was built before 1919. These older homes are more likely to be of poorer housing quality, and less likely to be sufficiently insulated and therefore energy efficient.

The key to developing successful policies to mitigate fuel poverty is making sure that support reaches the most vulnerable groups. But how are those groups identified, what are the most effective energy efficiency improvements and how can they be delivered?

The role of Local Authorities

Local Authorities will be crucial. At BRE, we help Local Authorities understand the scale and nature of fuel poverty in their area using housing stock data and insight to enable Local Authorities to make strategic decisions to target fuel poverty. As our Cost of Poor Housing report evidenced, poor housing also has a direct correlation to health and wellbeing, so improving it leads to people living in healthier and energy efficient homes.

One example is our work with Bolton Council, where we helped them tackle poor housing, protect the most vulnerable residents, and stimulate the local economy. Using BRE’s Housing Stock Condition Model, which identified the properties at risk of failing decency, this model was able to predict the presence of housing hazards, energy efficiency levels, disrepair, fuel poverty and low-income households, with the data being used by Bolton Council to predict the potential costs for rectifying these issues.

Our data can identify housing that is likely to meet certain defined criteria such as homes that are prone to excess cold or poor energy efficiency. We can build a picture of the scale of these issues so that Local Authorities can better plan, target and implement energy efficiency measures. We can also assist in the strategic level assessment of costs to implement energy efficiency measures, along with the added benefit of carbon savings estimates.

This dwelling level information can also be brought into our strategic-level Health Impact Assessment modelling, which looks at costs and benefits, to the NHS and to society, of mitigating housing hazards. These include comparative maps of housing condition and various health-related criteria, such as deaths from heart disease. For instance, heart disease can be linked with living in a cold, poorly insulated property.

The link between good health outcomes and living in a safe, warm home was highlighted in our 2021 report – ‘The Cost of Poor Housing in England’. This highlighted that poor housing is costing the NHS £1.4bn every year and more than half of these costs – £857 million – can be attributed to excess cold.

Making the case for greener homes

The installation of energy efficiency improvement measures not only delivers fuel costs savings to households, but it can also reduce the associated risks of living in a very cold home and deliver health and well-being benefits, as well as carbon emissions.

 

 

Cavity wall insulation, more efficient gas boilers, and features such as double-glazed windows are all helping to bring down the level of fuel poverty and meet the Government target that as many homes as possible achieve a minimum Fuel Poverty Energy Efficiency Rating (FPEER) of Band C by 2030. Data calculated by BRE for Government showed that 52.1% of all households were living in homes with a FPEER of Band C or above in 2020, an increase from 14.6% in 2010. On average, properties saved 8.6% on energy consumption with cavity wall insulation and 18% from solid wall insulation.

The Government has also committed to upgrade as many private rented sector homes as possible to Energy Performance Certificate (EPC) Band C by 2030 where practical, cost-effective and affordable, and has consulted stakeholders’ views on a suite of policy proposals to achieve this.

This data which tracks the energy efficiency of fuel poor homes is critical for Government as it considers improving energy efficiency to be the cornerstone for tackling fuel poverty. During the pandemic, householders’ incomes were at greater risk of being unpredictable, which makes future proofing the homes in which they live even more critical.

Using data to tackle fuel poverty

While improving energy efficiency goes a long way in alleviating fuel poverty and is a sustainable long-term solution to reducing energy use and cost, it cannot protect wholly against the large fuel price rises we are seeing now. This makes it even more important to be able to target and identify the groups who are most at risk of fuel poverty to enable Local Authorities to distribute support packages effectively.

We know that there are challenges for households in all tenures, and that raising standards for many private renters is required to help reduce fuel poverty levels in this group. The plans to consult on a National Landlords Register could substantially help by enforcing higher standards of quality and sustainability in privately rented accommodation, whilst encouraging landlords to take greater responsibility for energy efficiency.

Not only is identifying the potential for improving energy performance important, ensuring the quality of installations, such as insulation, is equally vital. We can support asset owners on their retrofit journey, so that for homeowners, the right quality standards are applied and for landlords, a return on the investment is realised.

Tackling fuel poverty is a difficult and complicated challenge, especially now when fuel affordability is threatened by sharply rising energy prices. However, using the data tools and knowledge we have developed, we can help policymakers successfully target the groups most at risk of fuel poverty to improve the energy efficiency of their homes. This is a sustainable and crucial step towards helping people keep their homes warm at a reasonable cost, while also realising the wider health and environmental benefits.