Fuel truth: 47% cut in fuel poverty budget
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.