Opinion Former Article

NHF: Poorest will lose out on fuel poverty fund but will still have to pay for it

Millions of the country’s poorest families could end up not benefiting from a flagship government fund aimed at tackling fuel poverty expected to be announced by the Department of Energy and Climate Change tomorrow – even though they will have to pay a surcharge on their energy bills for it.

Social housing landlords fear they may be largely cut out of bidding for subsidy to support Green Deal energy efficiency improvements to homes – despite the fact their tenants, who are disproportionately likely to be on low incomes and living in fuel poverty, will be paying for that subsidy through their energy bills.

Around 1.03 million social homes - the equivalent of 2.5 million people - will be vulnerable to fuel poverty if they miss out on the cash, according to Camco research commissioned by the Federation.

 “Housing associations are ready, willing and able to play a key role in delivering the government’s Green Deal. But if ministers do exclude social landlords from the ECO fund set up to tackle fuel poverty then millions of the poorest and most vulnerable people in the country will miss out on warmer homes and lower fuel bills”, Federation chief executive David Orr said.

“To make this even more difficult to stomach is the fact that these hard up tenants will still have to contribute to the fund even though they will not benefit from it.

“We’re not asking for any special treatment. But if low income social tenants have to pay a levy to fund these improvements then they and their landlords should have fair access to the fund.”

The decision to exclude social landlords could see fuel poverty rise to unprecedented levels and leave elderly and vulnerable people with little choice but to risk their health or even lives by leaving their homes unheated during the cold winter months, according to the National Housing Federation.

The Government is expected to split the energy company obligation (ECO) – a surcharge levied by energy companies on every customer to fund energy efficiency measures – into two pots. One will be used for ‘hard to treat’ measures such as solid wall insulation and another called ‘affordable warmth’, which will be used to tackle fuel poverty.

But social landlords fear the Department of Energy and Climate Change will prevent social tenants from benefiting from the affordable warmth funding pot when it announces its plans on Thursday, and also define eligibility for the hard to treat element so it largely excludes social housing. By doing so it will deny millions of tenants warmer homes and lower fuel bills.

Ministers may justify their approach on the grounds that social homes have - on average - a higher energy efficiency rating than those in the private sector. But new research commissioned by the Federation shows that without subsidy, at least a million homes could not be brought up to the standard which would free tenants from being at risk of fuel poverty.

The government project fuel poverty – defined to encompass households spending more than 10 per cent of their household income on fuel bills - to rise to around 4.1 million households this year (18% of all households).

In 2009, 762,000 social tenants were estimated to be living in fuel poverty (21% of social housing tenants). That number is expected to rise sharply as a result of rising energy prices, especially if social landlords cannot counter it through energy efficiency improvements subsidised by the ECO fund.

Tenants will not only lose out from benefiting from the ECO cash but will also have to fund it through a levy on their energy bills. The regressive surcharge will cost lower income customers a higher proportion of their income further squeezing hard up families.

The Federation, which represents England’s housing associations, stressed housing associations – which manage 2.5 million homes - were well placed to deliver large scale programmes of energy efficiency work. Housing associations, in many instances, would be able to carry out the work themselves and benefit from having a high concentration of homes within their local neighbourhoods.

Notes to editors:

The National Housing Federation represents 1,200 housing associations in England. Our members manage 2.5 million homes for 5 million tenants.

· Research by Camco for the Federation estimates that 1.03 million social homes could only be brought up to a standard that would free their tenants from fuel poverty if ECO funding is available to subsidise the necessary work. It also shows there are still 1.2 million social homes generating high carbon emissions, which will require £17,000 each to install even the most cost effective energy efficiency measures.

Teresa Richardson
Assistant Director
Campaigns and Communications
Direct telephone: 0207 067 1026
Mobile: 0797 7482 6587
Fax number: 0207 067 1018
Email: teresa.richardson@housing.org.uk
Registered Address:
Lion Court, 25 Procter street, London, WC1V 6NY
Registered in England, number: 302132

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