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National Energy Action Vision: An end to fuel poverty Mission: To ensure that everyone in the UK can afford to meet their energy needs in the home, sufficient for good health, comfort and wellbeing
National Energy Action Ø UK wide (in Scotland in partnership with Energy Action Scotland) 4 main areas of action: Ø Ø Campaigning and policy analysis Education and training Evaluating new solutions and products Engaging at a local level to deliver programmes to tackle fuel poverty NEA considers that energy efficiency is the main sustainable solution to tackling fuel poverty
Fuel Poverty Ø the need to spend over 10% of household income on fuel costs to maintain adequate warmth for health and comfort Ø 20% - severe fuel poverty Ø Ø Factors affecting fuel poverty: cost of fuel level of household income physical quality and characteristics of the dwelling degree of vulnerability of the occupants of a dwelling
Who is affected? Ø Fuel poverty can affect anyone! But most prevalent among: Ø Ø Ø vulnerable households including pensioners people with children under the age of 16 those on benefits people with disabilities, and people suffering long term illness Rural areas particularly affected Ø Currently affects over 7 million UK households (CSE/Consumer Focus Now Cast data)
Fuel Poverty Statistics 2011 2010 COUNTRY Total Households In FP 3, ENGLAND 963, 923 WALES 331, 983 SCOTLAND 733, 010 NORTHERN IRELAND 302, 310 5, GREAT BRITAIN 028, 916 UK 5, 331, 226 Percentage 18. 4% Total Households in percentage FP 5, 314, 655 20. 0% 425, 161 938, 171 358, 877 6, 677, 987 20. 6% 7, 036, 863 26. 2% 31. 5% 43. 8% 24. 7% 33. 5% 40. 3% 49. 4% 26. 6% 27. 2%
Welfare Reform – Changes Ø Universal Credit Ø Council Tax Benefit Ø Personal Independence Payments Ø Benefit Cap Ø Social Fund Ø Housing Benefit Ø Benefit Appeal Rights
Welfare Reform Universal Credit Ø A single means tested benefit to people of working age Ø Universal credit will be paid monthly, to one individual in a household Ø All benefits will be paid to the claimant, including rent which previously was paid to a landlord Ø Claims and reporting of changes will primarily be made online Ø Replaces existing means-tested benefits including; Ø Income-based JSA Income-related ESA Ø Income Support Housing Benefit Ø Working Tax Credit Child Tax Credit
Implications for fuel poverty Some examples: - A household with rent of £ 100 a week and a spare bedroom will lose £ 14 a week. A household in which an individual loses one of the lower rates of Disability Living Allowance will be at least £ 20. 55 a week worse off. Someone has been claiming long-term Incapacity Benefit who is found to be fit for work will lose £ 99. 15 a week – if they are eligible for Jobseeker’s Allowance they will get at least £ 28. 15 a week less.
Impacts – Eat or Heat? ØFood poverty - 120% rise in numbers turning to foodbanks in the last 12 months – Trussell Trust Foodbank charity ØBiggest ever increase in Welsh foodbank use ØOver 35, 000 people in Wales have received at least 3 days emergency food from Trussell Trust foodbanks (over last 12 months) - more than twice the number helped in 2011 -12 “It’s shocking that people are going hungry in 21 st century Britain. ’”
Implications for fuel poverty Households in Wales will lose 4. 1% of their income as a result of the tax and benefit reforms to be introduced by 2014 -15 - compared with a UK average loss of 3. 8% (Institute for Fiscal Studies) Ø Households receiving benefits - already on relatively low incomes and at greatest risk of fuel poverty Ø Numbers in fuel poverty likely to increase substantially - AND increase in the severity of fuel poverty Ø A number of energy efficiency programmes determine eligibility for assistance via receipt of benefits Ø Households who lose eligibility for benefits could also lose eligibility for the Warm Home Discount
Green Deal and ECO Key Concerns Ø The costs of the ECO will be met through a levy on domestic energy bills, resulting in increased costs for many vulnerable people already struggling to heat their homes Ø Those households that do not take up measures (or are unable to) will see their bills increase Ø There also concerns around the reduction in funding for fuel-poor households with Wales, England Scotland all competing for these limited ECO resources Ø Majority of low-income and vulnerable households will only be able to access the benefits of energy efficiency through Green Deal Finance Ø Concern that financially disadvantaged households may be directed towards a Green Deal Finance Arrangement Ø How well ECO funding and entitlement is signposted at the assessment stage is still unknown, how this will be tracked?
Green Deal and ECO Ø How can we ensure equitable access and delivery to rural and deprived areas and to low-income households? Ø Concerns around consumer protection Ø Households that under-consume or under-occupy potentially faces significant increases in their energy bills if they take out a Green Deal finance arrangement Ø Not clear whether the Green Deal Ombudsman will monitor instances of disconnections resulting from default on a Green Deal charge or where existing fuel debt problems have been compounded by a Green Deal charge
Collective Switching Ø Can collective switching help to alleviate fuel poverty? Ø Wales collective switching events – North and South Wales Ø Which? “Big Switch” campaign, Peoples. Power, Cornwall Together Ø Led by local authorities, political parties and community groups Ø Local authorities being encouraged to take the lead Ø Brings together groups of consumers to buy gas and electricity in bulk, thereby accessing discounts that aren’t available to individuals Ø Relatively new concept in the UK - schemes have operated in some European countries for several years, including Belgium and Holland
You find out about the idea and decide to take part You sign up and give your information Registration Competiti Suppliers compete to make best offer on to group. The deal is offered to you You decide whether or not to Consider offertake up the deal and switch Managed switch You switch to a better deal (or don’t)
Collective Switching Ø Wales has some of the lowest levels of switching energy supplier in the UK (Jan 2012 Consumer Focus Wales report) Ø More than 2 in every 5 Welsh consumers have never switched their energy supplier Consumer Focus research into collective switching: Ø High levels of distrust of energy suppliers & also indifference Ø Too complicated/difficult to compare tariffs/suppliers Ø Need for different promotion channels for different target audiences Ø lower income groups/irregular or non-switchers potentially have most to gain from participation Ø Need for support, explanation & reassurances given throughout process Ø Final Wales & GB reports due shortly