From the TUC

Fuel truth: 47% cut in fuel poverty budget

13 Apr 2012, by in Environment

The DPM’s announcement this week of “at least £540m to fund energy saving improvements in the worst-off homes” sounded like a big boost of new money, but wasn’t. In reality, Government support to tackle fuel poverty has been cut in half. These are the figures. The new budget for fuel poverty is £540m annually. This compares with fuel poverty spending in 2010/11 of £1.15bn. According to estimates from the Association for the Conservation of Energy (ACE), support for fuel poor households has been cut by 47%.

Here’s how we work this out. In 2010-11, the budget for Warm Front was £345m and for CERT as a whole, £1.3bn. According to DECC, half of the CERT budget (53%) is spent on fuel poverty Priority Groups, so that’s £689m. Add to that the whole of the £116.7m Community Energy Saving Programme (CESP) and you reach a total on fuel poverty and priority groups of vulnerable households of £1,150.7m.

New money of £540m is therefore only 47% of previous government expenditure.

This week Clegg said “We will be requiring the energy companies to provide at least £540m to fund energy saving improvements in the worst-off homes”. ACE estimates that Clegg’s £540m figure was in fact only an increase in the share of the Affordable Warmth part of the new Energy Company Obligation (ECO) budget. The £1.3bn ECO budget for home energy efficiency and the Green Deal stays the same.

The DPM added: “Low-income and vulnerable homes, older people, people with disabilities .. These are the households most at risk of fuel poverty. And there will be specific support for the most deprived areas. We expect the investment to help 180,000 fuel poor households a year, delivering the lasting improvements that will make their homes cheaper to heat – for good.”

Or not. This year’s meagre £110m allocation for the Warm Front homes insulation scheme was underspent by £25m and won’t be carried forward to next year. The unspent money could have helped 15,000 fuel poor households. Instead of handing it back to the Treasury, the Deputy Prime Minister could have announced that the
underspend would be added to this year’s budget for Warm Front. That budget has
sunk from £540m to £345m to £110m to just £100m. From 2013, publicly funded
home insulation schemes come to a halt.

ECO obliges the big energy suppliers to provide extra support needed for hard to treat homes, and the lowest income and vulnerable households. ECO support will be available for costly measures such as solid wall insulation. But it’s not enough. ACE rightly says the budget for the fuel poor and vulnerable households is still massively short of the amounts needed to tackle fuel poverty.

2 Responses to Fuel truth: 47% cut in fuel poverty budget

  1. David Thorpe
    Apr 25th 2012, 2:57 pm

    Dear Philip

    This is a good analysis of the situation but does not account for the existing unspent funds in Warm Front. I wonder if you have any comment on this parliamentary answer to a question by Caroline Flint which seems to suggest that one third of the budget was unspent for the last financial year, 2011-12, £50.6 million:

    Caroline Flint (Don Valley, Labour)

    To ask the Secretary of State for Energy and Climate Change pursuant to the answer of 20 January 2012, Official Report, column 1002W, on the Warm Front scheme, how much funding allocated for the Warm Front scheme in 2011-12 was (a) spent, (b) committed to expenditure and (c) unspent.

    Hansard source (Citation: HC Deb, 23 April 2012, c620W)

    Gregory Barker (Minister of State (Climate Change), Energy and Climate Change; Bexhill and Battle, Conservative)

    The original budget for Warm Front and associated fuel poverty expenditure for 2011-12 was £110m. During 2011-12 total expenditure was almost £108 million with a further £0.6 million committed but not yet paid. Therefore, of the original Warm Front budget £1.4 million was unspent.

    The budget was increased by £35 million during the year as a result of £25 million allocated to support the completion of outstanding works from 2010-11 with a further £10 million provided by the Department of Health. We also received agreed rebates from Carillion Energy Services of nearly £14 million. These rebates were used to offset expenditure in 2011-12 bringing a total reported expenditure for the year to £94.4 million. Against the new budget of £145 million for 2011-12, £50.6 million was unspent.

  2. £50m cut from green economy budget | ToUChstone blog: A public policy blog from the TUC
    Apr 25th 2012, 3:27 pm

    […] cuts to the green economy fuel the recession. As David Thorpe commented on my fuel poverty blog, it seems that the government actually under spent its energy […]