Warm Homes: Tackling fuel poverty

34 per cent of homes in Northern Ireland are in fuel poverty. This means that in 225,000 homes, 10 per cent or more of household income would need to be spent on energy bills to maintain an acceptable level of temperature in the home. Since the research for these
estimates, in 2006, rising fuel costs, particularly in recent months, will have drawn more households into fuel poverty.

A report published by the Comptroller and Auditor General, examines the contribution made by the Department for Social Development’s Warm Home Scheme in delivering the Department’s objective of eliminating fuel poverty amongst vulnerable households by 2010. His report records that, since 2001, the Department has spent £98 million to improve heating and insulation in 60,000 homes.

Mr Dowdall said:
“Warm Homes has significant potential to benefit the fuel poor. However it is clear that the Department’s strategic objective of eliminating fuel poverty cannot be achieved by this scheme alone. The Department needs to examine how the scheme can be more closely matched with its strategic objectives. It is also important that eligibility criteria for the scheme and the specific measures provided are reviewed to ensure the right measures are provided to those most in need.”

Main Findings

  • The scheme provides significant benefits for home energy efficiency. However, the scheme alone will have limited impact on fuel poverty which is determined by household income levels and fuel costs as well as energy efficiency.
  • Although the Department has an overall aim to eliminate fuel poverty for vulnerable households by 2010, it has set no specific milestone targets for the owner-occupied and private rented sectors, the sectors at which the scheme is aimed. Operational targets for the Warm Homes Scheme are based solely on the number of households assisted. In addition, they provide no indication of the impact of the scheme on improving energy efficiency and reducing fuel poverty.
  • The scheme’s marketing is effective and the use of specified passport benefits is a convenient way of determining eligibility for the scheme. However, significant numbers of fuel poor are excluded from assistance, including the working fuel poor who are not on benefits (estimated to be 28 per cent of the total fuel poor in 2004) and those who are eligible for benefits but do not claim them. For example, it is estimated that only half of eligible pensioners claim Pension Credit, a passport benefit for the scheme. The qualifying benefits which determine eligibility for the scheme include some non-means tested benefits. Some recipients of these benefits may not be in fuel poverty but will still be eligible for assistance through the scheme.
  • The range of measures available provides flexibility to meet the needs of different households. However, the most effective measures are not available to all clients; central heating systems are only provided for those aged over 60. Homes receiving basic energy efficiency measures are unlikely to be lifted out of fuel poverty.
  • Grants are not directed towards the least energy efficient homes. The Audit Office found that in 2006-07, 30 per cent were awarded to energy efficient households that were at little risk of fuel poverty. In addition, the scheme has not addressed the problem of ‘hard to treat’ homes, typically older, solid walled homes in rural areas.
  • Costs of the energy efficiency measures have increased at a rate substantially higher than inflation and are higher than a similar scheme in England. Differences in cost between the two schemes are only partially explained by differences in technical specifications.
  • Standards for quality and timeliness of installations have not been achieved. An independent assessment of heating installations in 2005-06 found that almost half did not meet the scheme’s quality standards. At March 2008, 6,550 referrals for heating systems were awaiting installation, equivalent to a two-year backlog.
  • The Department is currently reviewing the scheme as it prepares to let a new contract for its management and delivery. In May 2008, the Department also set up a Fuel Poverty Task Force to consider how fuel poverty can be addressed in the short term.