Fuel Poverty in England

Fuel poverty is defined as the need for a household to spend over 10% of its income to achieve temperatures required for health and comfort.1 Fuel poverty is dependent on:

• household income
• fuel prices
• home energy efficiency

The number of households in England in fuel poverty doubled from 2 million in 2004 to 4 million in 2009 and further increases are projected for 2011 and 2012.2 Over this time period domestic electricity prices increased by over 75%, gas prices by over 122%.3

Although households with individuals aged over 60 make up the single largest group living in fuel poverty, almost a third consist of a couple or lone parent living with dependent child(ren).2 

Government policy in England to date has focused on (i) improving household income through general welfare payments, winter fuel and cold weather payments and (ii) energy efficiency through the Warm Front scheme providing grants for improved home energy efficiency.

The UK has a target to reduce carbon dioxide (CO₂) emissions by 34% by 2020 (from the 1990 baseline).Improved home energy efficiency is included in Government strategy to achieve this as energy used to heat homes accounts for 25% of the UK’s carbon emissions.4

 Changes to policy include:

•  The total budget for Warm Front  in 2011/12 and 2012/13 is £210 million, after which time the scheme will cease to exist.56 New eligibility criteria from 2011 will result in fewer households being eligible for a grant.7
• A new ‘Green Deal’ is proposed from late 2012. This scheme will allow consumers to pay for energy efficiency improvements through their energy bills.4
• Energy suppliers will be required to spend £250 million in 2011/12 rising to £310 million by 2014/15 providing assistance with energy costs to vulnerable customers.8
• An uplift to winter fuel payments introduced in 2008 is being withdrawn from 2011/12 resulting in a reduction of £50 to £100 for eligible households.

Evidence of the possible benefits

Only 53% of fuel poor households are currently eligible for Warm Front grants. Stricter eligibility criteria could result in a more targeted scheme to benefit the most vulnerable.9

Evidence of the possible risks

The proportion of people living in poverty is projected to increase in the next 2 years.10 As domestic fuel prices are also predicted to increase11 it is inevitable that there will also be a rise in the numbers living in fuel poverty. The decrease in budget allocated to the Warm Front scheme for 2011-2013 is therefore unlikely to meet demand, even allowing for reduced eligibility. 

Uptake of the new Green Deal is reliant on householders making a financial commitment at a time of increasing energy prices and uncertain financial climate. Implications for the private rented sector are unclear.12

A failure to improve home energy efficiency will also have a direct impact on the achievement of the national CO₂ reduction target with subsequent longer-term effects on the environment and human health.13

Implications for health and well-being

Fuel poverty is likely to result in inadequately heated housing. The health impacts of this include:

• Higher mortality risk in the elderly 14
• Reduced overall physical, mental and emotional well-being 15
• Increased circulatory and respiratory disease in adults 16
• Increased risk of falls, mental health illness, social isolation, hospital admissions, 16 asthma/exacerbation of symptoms in children, and minor illnesses such as coughs and colds 17

Author: Mary O’Brien, Specialty Registrar in Public Health, Wessex Deanery.

The Warm Front scheme applies to England only. Scotland, Wales and Northern Ireland have similar schemes. The Energy Bill and Green Deal apply to England, Scotland and Wales.

References:

1. Department of Energy and Climate Change (2001) The UK Fuel Poverty Strategy. Available at http://www.decc.gov.uk/assets/decc/what%20we%20do/supporting%20consumers/addressing%20fuel%20poverty/strategy/file16495.pdf  Accessed 9 August 2011

2. Department of Energy and Climate Change (2011). Annual Report on Fuel Poverty Statistics 2011. Available at http://www.decc.gov.uk/assets/decc/Statistics/fuelpoverty/2181-annual-report-fuel-poverty-stats-2011.pdf  Accessed 9 August 2011

3. Department of Energy and Climate Change (2011). Quarterly Energy Prices – June 2011. Available at http://www.decc.gov.uk/en/content/cms/statistics/publications/prices/prices.aspx  Accessed 9 August 2011

4. Department of Energy and Climate Change (2010). The Green Deal: A Summary of the Government’s Proposals. Available at  http://www.decc.gov.uk/assets/decc/legislation/energybill/1010-green-deal-summary-proposals.pdf Accessed 9 August 2011

5. Department of Energy and Climate Change (2010). The Warm Front Scheme Annual Report 2009/10. http://www.decc.gov.uk/assets/decc/What%20we%20do/Supporting%20consumers/Addressing%20fuel%20poverty/1281-warm-front-annual-report-2009-10.pdf Accessed 9 August 2011

6. http://www.decc.gov.uk/en/content/cms/news/pn10_129/pn10_129.aspx Accessed 9 August 2011

7. Department of Energy and Climate Change (2011). The UK Fuel Poverty Strategy 2001 Government Response to the Consultation on Amending Reference to the Warm Front Scheme Eligibility Criteria. Available at  http://www.decc.gov.uk/assets/decc/Consultations/warm-front-eligibility/1441-govtresp-warm-front-eligibility.pdf Accessed 9 August 2011

8. Department of Energy and Climate Change (2011). Government response to the Consultation on the Warm Home Discount. Available at http://www.decc.gov.uk/assets/decc/Consultations/warm-home-discount/1307-gov-response-warm-homes-disc-cons.pdf Accessed 9 August 2011

9. Department of Energy and Climate Change (2011). Amendments to the eligibility criteria for the Warm Front scheme. Available at http://www.decc.gov.uk/assets/decc/Consultations/warm-front-eligibility/1442-ia-warm-front-eligibility.pdf Accessed 9 August 2011

10. Institute for Fiscal Studies (2010). Child and working age poverty from 2010 to 2013. Available at http://www.ifs.org.uk/bns/bn115 Accessed 9^th August 2011

11. Bank of England (2011). Inflation Report May 2011. Available at http://www.bankofengland.co.uk/publications/inflationreport/ir1102.htm Accessed 9 August 2011

12. Department of Energy and Climate Change (2010). Energy Bill: Rented Sector Regulations 2011. Available at http://www.decc.gov.uk/assets/decc/11/policy-legislation/energy%20act%202011/3219-energy-act-2011-private-rented-sector.pdf Accessed 24 October 2011

13. Department of Health (2008). Health Effects of Climate Change in the UK. Available at http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_4007935 Accessed 9 August 2011

14. Office for National Statistics (2011). Excess Winter Mortality. Available at http://www.ons.gov.uk/ons/search/index.html?newquery=excess+winter+mortality Accessed 28 November 2011

 15. Green G, Gilbertson J. (2008) Warm front: better health, health impact evaluation of the warm front scheme. Available at http://www.apho.org.uk/resource/item.aspx?RID=53281 Accessed 25 November 2011.

16. Marmot Review Team (2011). The Health Impacts of Cold Homes and Fuel Poverty. Available at http://www.foe.co.uk/resource/reports/cold_homes_health.pdf Accessed 9 August 2011

17. Barnes M et al. (2008) The dynamics of bad housing: The impact of bad housing on the living standards of children. London: National Centre for Social Research