Fuel Poverty

Fuel poverty has been defined as where a household needs to spend more than 10% of its income to keep the home heated to 21°C in the living room and 18°C in the rest of the house. It is calculated using the income of households, the cost of fuel they need for heating, and the ability of their home to retain heat.

Fuel poverty has also been summarised in another simpler way as the situation whereby a household is unable to heat its home to a reasonable level at a cost that is affordable to them.

The age and nature of rural houses has implications for the cost of heating a home. Virtually all houses built before 1919 are solid walled, while nearly all built after 1945 are cavity walled and are therefore generally better insulated. Rural houses are more likely to be detached and larger than urban houses but living in a larger detached house in a rural area does not necessarily imply a higher income.

While over 60% of homes in urban areas and rural towns are cavity walled and on mains gas, this is true of only 32% in villages and 21% in hamlets. In villages and hamlets oil is a major source of heating fuel, and electricity for heating is more common in villages than any other area type. The number of households in fuel poverty is assessed through a modelling process drawing upon several national household and housing surveys such as the English House Condition Survey.

It is clear that fuel poverty has an interdependent relationship with how difficult a home is to make fuel efficient. Homes with certain structural characteristics (meaning they are difficult to make fuel efficient) are known as hard to treat. These homes cannot accommodate typical modern energy efficiency measures such as loft and cavity wall insulation and may include properties with solid walls, homes with no loft space or lacking a connection to a lower cost fuel like mains gas.

In the 2010 Rural Services Network Report, Understanding the real depth and impact of fuel poverty found there are 9.2 million homes in England considered to be hard to treat . Due to the high costs of heating hard to treat homes, families who would cope relatively well in a more energy efficient home might likely find themselves in fuel poverty. The report categorised its main findings as follows:

  • Depth of fuel poverty – the study found that fuel disadvantage is having a ‘deep impact’ in more that 70% of the households in two of the areas and in the third is affecting one in three.
  • Characteristics of fuel poverty – Fuel disadvantaged households (FDH) are more likely to live in pre-second world war properties and be owner occupiers. Fuel poverty is also exacerbated in rural areas because it has a number of unique characteristics – sold walls, higher off gas properties and lower average wages.
  • Impacts on health – FDH are more likely to include someone suffering from a serious long term illness such as asthma. In addition the research found that the ‘vast majority’ of these households are rationing fuel even if the household includes children, therefore worsening their existing health conditions.
  • Impacts on affordability and debt – Large numbers of FDH are forgoing other essentials and are experiencing high fuel debt. Affordability of off the network fuel like oil is a particular issue for households particularly for those with children under 16. Pre-payment meters also have an impact on debt and affordability.
  • Policy and delivery – Government energy efficiency and fuel poverty have not had the same benefits for rural communities despite rural communities paying the same amounts as urban counterparts for fuel. Policy and delivery has been aimed at roof/cavity wall insulation and not solid walls and off main fuel and its higher delivery costs.

The report makes several recommendations directed at different bodies -central Government, local authorities and their partners. These include that:

  • the fuel poverty definition should be changed to include disposable income after housing costs;
  • there should be information sharing between key bodies like the NHS, Department for Work and Pensions and local authorities to better aid targeting of fuel poverty measures at those who need them most;
  • local authorities should consistently capture key data such as the energy efficiency of properties, benefits and data from for example, the Warm Front and Carbon Emission Reduction Target programmes to obtain an accurate position for fuel disadvantaged households in their county;
  • local authorities, housing associations, private landlord groups and credit unions should be encouraged to facilitate more community buying groups in off gas areas to spread the cost savings of bulk buying to more rural off gas households;
  • these organisations should also look into sharing information, best practice and developing consortium agreements to achieve lower prices and installation costs for renewable heating solutions in off gas areas.

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