A new UK fuel poverty strategy – what needs to be done?

Ross Armstrong, Warmworks’ Chief Executive, outlines a number of  key points that a new UK fuel poverty strategy must address to ensure it is delivered effectively.

As an organisation that has now delivered more than £300 million of grant funding to more than 50,000 homes and families over the last 10 years, Warmworks understands that fuel poverty is a national social crisis. As we’ve heard all too often, the reality is that millions of households are still facing the impossible choice between heating their home and putting food on the table.

This worsens health inequalities, increases child poverty and leaves fuel poor households left out of the benefits that come from decarbonising our housing stock, and that’s why we’ve welcomed the UK Government’s commitment to outlining a new fuel poverty strategy to address the issue over the long term. With that in mind, Warmworks has set out a number of points that a future UK fuel poverty strategy must consider, to ensure it will be of the greatest benefit to those who need it most.

Above all, given the already significant but still growing size of the problem, a successful fuel poverty strategy requires urgency and scale. It must also provide a viable framework for delivery of help and support, because delivery is where help will happen, change will be felt, and impacts will be made tangible.

It’s therefore important for any future UK-level fuel poverty strategy to embed the learnings from established delivery models already working at scale, such as the Scottish Government’s Warmer Homes Scotland scheme. The strategy must also provide the right environment for high-quality supply chain businesses to invest in the long term, avoiding the short-termist approach that has undermined recent activity in so many areas of the UK.

Warmworks’ response to the range of key questions and issues relating to the development and rollout of a revised strategy are outlined in detail below.

How should fuel poverty targets be set?

It is important to be ambitious and stimulate action. Having a target in place retains focus on the issue, encouraging all parties to work together in delivering solutions that work at scale. It also provides a clear signal to industry that government sees tackling fuel poverty as a core priority, which, in turn, provides the basis for a platform for long-term investment.

Any target set will be at its most effective if it is clear and straightforward. Seeking to overcomplicate or overengineer the target at the headline level will reduce much-needed clarity that will be needed to drive the establishment of a long-term, effective delivery platform. If further complexity and opacity are added to factors such as definitions, objectives or targets relating to fuel poverty, that typically has the end result of disengaging many of the key stakeholder groups that need to be more actively engaged in delivery.

Using the example of the Scottish Government’s approach, its national fuel poverty scheme has been in place for more than 10 years and still has a contractual commitment out to 2030, which has created an ability for 40-plus SMEs to create more than 700 new jobs and almost 200 new apprenticeships in the same period. This directly correlates to, and has been supported by, the Scottish Government’s fuel poverty target and supporting strategy.

How can the strategy achieve the scale required?

Warmworks is broadly supportive of the ‘Worst First’ principle, given the correlation between the least energy efficient homes typically being occupied by those in most severe, or at most severe risk of, fuel poverty.  However, it is important to note that the overall scale of activity that will be required to tackle fuel poverty will effectively mean ‘fuel poverty-proofing’ a huge proportion of the available housing stock.

This means that the ‘Worst First’ principle should only be used as a guide, rather than a hard and fast barrier that prohibits action in vulnerable homes more widely. If the focus is too great on one particular group or demographic, it can risk excluding people and homes on the margins, which would represent bad policy given the scale of the overall challenge.

The transition to net zero needs to be inclusive and provide clear access for fuel poor households. In reality, this means investing in long-term, effective, grant-based support that can be delivered at scale.

As an example, the Scottish Government’s Warmer Homes Scotland scheme will have committed almost £1 billion of grant funding between 2015–2030 and it has done so across just two long-term, multi-year contracts that have created certainty for customers, industry and stakeholders alike.

This means that in Scotland, the road to a just transition has been supported by a grant scheme that offers whole-house retrofits, focuses on the decarbonisation of heat and leads with a fabric-first principle.

How should support be targeted to fuel poor households?

Means testing is an essential principle behind grant support because it is important to ensure that limited grant funds are targeted towards people and communities in need. However, it is equally essential to ensure that the principle of seeking to accurately target support does not lead to overcomplicating the nature of grant scheme delivery.

While support should be targeted to those most in need, as far as practicable, it should be noted from experience that adding in layers of perceived extra precision and further variables always act as a barrier to access and a direct inhibitor to effective delivery.

The Scottish Government’s Warmer Homes Scotland scheme has supported more than 50,000 homes in the last 10 years with a set of eligibility criteria that focus on the eligibility of the person (largely defined by benefit receipt as a proxy of having a low income and/or having a disability) and the eligibility of the home (defined by the SAP rating of the property being below a certain level). This clear and accessible setup has helped to reach more people in or at risk of fuel poverty and has helped to create a simpler, clearer platform for delivery at scale for the entire supply chain.

Highlighting the wider social value created by tackling fuel poverty

It is vital that government, in setting out a long-term strategy for tackling fuel poverty, is able to demonstrate and showcase the wider social benefits that can be accrued from an effective fuel poverty scheme and a vibrant, scalable delivery network, as investment in fuel poverty support clearly generates much wider social policy gains.

Warmworks has worked with Social Value Lab, a leading research consultancy, on several occasions over the last five years to produce reports that demonstrate the full range of public policy upsides that come from investing in fuel poverty schemes. A link to one of the reports is available here.