An unacceptable number of premature deaths occur in the UK every winter due to the combined effect of poverty and energy inefficient housing. Emma Jones investigates ways to eradicate fuel poverty

Fuel poverty is the cause of pain and suffering for millions of people every year. It is generally felt most acutely by the old and the very young and can result in poor health, and in extreme cases, premature death - an estimated 50,000 every winter. Eliminating fuel poverty is a priority for the Government and local authorities can play a key role in helping to achieve this target.Anyone who cannot afford to adequately heat their home may be deemed to be suffering from fuel poverty. A more technical definition, used by the Government, is that anyone who needs to spend more than 10 per cent of their disposable income to achieve the minimum heating standard deemed necessary for a healthy environment (18°C in the living room and 16°C elsewhere) is fuel poor. The national average expenditure on fuel is just below 8 per cent, while private tenants need to spend an average of 17 per cent.

Data from the 1996 English House Condition Survey shows that there are at least 4.3 million fuel poor households in England alone. In practice, these householders simply cannot afford to spend the money needed to achieve the necessary minimum heating standard and hence suffer from cold and often damp homes in winter.

CAUSE AND EFFECT
Energy inefficient dwellings and low income are the two main causes of fuel poverty, while fuel price is another, less significant factor. The energy efficiency of housing is measured on a scale from one to 100 (the higher the number, the more efficient the house). Houses built today will typically achieve ratings of above 70, by having good levels of insulation (eg loft, cavity wall and hot water tank, plus double glazed windows) and modern, efficient heating systems. However, the 1996 English House Condition Survey found the average rating to be less than 44, while there are over 500,000 dwellings with a rating of less than 10. (These are generally old properties, with solid walls, single glazing, no insulation and very old or non-existent heating systems.)

The other main cause of fuel poverty is low income, with householders not having enough money to pay for sufficient fuel. Low income householders tend to occupy the least energy efficient dwellings - there are almost 500,000 households in England with annual incomes less than £4,500 living in homes with a Standard Assessment Procedure (SAP) rating of less than 10 - these are the households suffering the worst fuel poverty.

Fuel costs are at their lowest point for many years as a result of liberalisation of the energy markets (with increased competition for customers between suppliers) and the reduction of VAT on domestic fuel to 5 per cent. However, for those low income householders which have to use prepayment metres for their fuel, a higher unit tariff is incurred than for fuel purchased directly. The result is that low income householders are doubly penalised in terms of access to affordable warmth, first by living in the least energy efficient dwellings and second by having to pay more for their fuel than high income householders Fuel poverty is a problem that is almost unique to Britain, as a result of the high proportion of old housing stock which was built to very low energy efficiency standards. For example, fuel poverty does not exist in Scandinavian countries where winter temperatures are far colder than the UK.

The main effects of fuel poverty are health related, with the young, old, sick and disabled most at risk. In colder temperatures, blood pressure increases and the risk of heart attacks and strokes rises dramatically. As a result, most excess winter deaths are caused by heart attacks, strokes and respiratory illnesses. In addition, cold houses are often damp, resulting in ill health through the presence of mould and dust mites, both of which are associated with a range of respiratory and allergic conditions, including asthma.

By having to use a larger portion of income to keep warm than other households, the quality of life for the "fuel poor" is affected. Evidence exists, for example, of pensioners who heat and live in only one room during the winter because they are afraid of running up high fuel bills, or of single mothers stapling their curtains permanently shut to try to keep some heat in. As well as causing suffering for the householders, fuel poverty places a burden on the NHS during winter, with ill health caused by poor housing estimated to cost the NHS around £1bn each year.

ERADICATING FUEL POVERTY
Raising incomes will undoubtedly help to lift people out of fuel poverty. For example, the Government has recently increased the "winter fuel payments" that are given to pensioners to £150. This is a great help to fuel poor pensioners, but while the housing stock remains inefficient much of this income will be lost through heat that escapes through uninsulated walls, or on fuel that is powering an old and inefficient heating system. How much further could this money go if the heat were not escaping so rapidly? Raising the efficiency of a property is a more cost effective long-term solution to the problem.

There is still scope for undertaking even the most basic and cost effective efficiency measures. A report by the National Right to Fuel Campaign estimates that in 1998, almost half a million low income households had uninsulated lofts, while a further half a million had very poorly insulated lofts. Loft insulation costs, at full price, around £230 per property and will save up to £50 annually in fuel bills. Another very cost effective measure is cavity wall insulation. The same report estimated that there are over 3.5 million low income homes with cavity walls that still require insulating. Even more surprisingly, almost half a million hot water tanks have not been insulated - a measure which costs just a few pounds and pays for itself in less than a year.

LOCAL AUTHORITIES' ROLE
Under the Home Energy Conservation Act 1995 (HECA), authorities have a duty to draw up strategies to improve the energy efficiency of the domestic sector in their area by 30 per cent over 10 to 15 years, and to report annually (biannually in Scotland) on progress. Since 2000 (England and Wales), these progress reports must also include details of action taken to tackle fuel poverty. (In Scotland, reporting on affordable warmth policies and activities has always been an integral part of HECA reporting, but formal guidance on this issue is planned in time for the next round of reports.)

There are various roles that a local authority can take in terms of helping to reduce fuel poverty within its boundaries. The most obvious is to concentrate on reducing fuel poverty amongst its own tenants. Authorities should review their maintenance and capital programmes to ensure that energy efficiency is fully integrated as a priority, and investigate how repair and maintenance works can take vulnerable households out of fuel poverty. They should also ensure that people in their community are aware of the sources of financial help and advice available to them, and consider establishing local performance indicators relating to fuel poverty.

Another option is to utilise Combined Heat and Power (CHP) systems to supply locally generated energy to tenants, which can reduce heating bills considerably. For example, Birmingham City Council installed community heating for a block of 48 flats, which increased the average temperature in the flats from 13°C to 18°C, while at the same time saving tenants £46 a year on their total fuel bills. The local authority has gained an income of £88 per dwelling annually from the charges for fuel, which contributes to the refurbishment and maintenance costs of the dwellings.

The majority of the fuel poor are to be found in the private sector, as the energy efficiency of public housing tends to be higher than private housing. As part of their HECA work, many authorities are already promoting the various energy efficiency grants that are available to private sector householders (see box 1). Particular authorities have also demonstrated some of the other actions that can be taken to target this sector.

Forming partnerships
Tackling fuel poverty covers a range of issues and authorities should work with partners to identify those in fuel poverty and to ensure that all available grant funding is targeted to those most in need. Partners could include various departments from within the authority (such as housing benefits and social services) as well as external organisations such as housing associations, health service providers, care and repair agencies and voluntary agencies working with the elderly.

Targeting action through GPs
Oxford City Council's environmental health department is working with health visitors and GPs to target grant funding to those in need. GPs can refer those patients whose health they consider would benefit from energy efficiency improvements to the council's scheme. These patients are then given priority for grant funding for insulation measures and heating systems. As part of the scheme, health workers have been trained to provide their clients with basic advice about accessing grant funding and reducing their heating bills. Since it started in 1987, around 3,000 homes have been improved.

The private rented sector
The private rented sector has the lowest average energy efficiency of all tenures and is one of the hardest to tackle because neither landlord nor tenant has a great incentive to invest in energy efficiency (the landlord because they will not reap the benefits of lower fuel bills, and the tenant because they frequently do not stay in a property long enough to recoup the cost of investment). Some authorities, such as Edinburgh City Council, have chosen to target their own private sector grants to this sector. By using a mixture of council-funded grants plus zero interest loans in a revolving loan fund, the council has persuaded landlords to pay for approximately two thirds of the cost of new, efficient heating systems, with the remaining third funded by the council grant. In the first year alone, 85 heating systems were installed.

Zero interest loans
Low income households often do not have sufficient capital to invest in energy efficiency measures upfront. By offering a zero interest loan this barrier can be overcome, with repayments designed to be funded from the savings made on fuel bills as a result of the measures. This approach has been taken by Bolsover District Council, which offers low income private tenants, social tenants and owner-occupiers, who do not qualify for HEES assistance, an interest free loan to help fund simple measures, such as insulation and low energy light bulbs. The scheme is run in partnership with the Groundwork Trust and a total of 100 loans were granted in the first year alone. The loan fund was set up with the help of a HECAction grant from the Energy Saving Trust and loan repayments will go back into the fund, thus sustaining the loan fund indefinitely.

Forming a strategy
Some authorities have chosen to draw up a strategy dedicated to tackling fuel poverty. For example, Wolverhampton has produced an "affordable warmth" strategy which includes an action plan with time-scales for delivery and the partners responsible for implementing each action. The strategy was developed in partnership with the national charity NEA, local housing associations, voluntary sector agencies, representatives from tenants and residents associations and the health community.

FUNDING FOR LA PROGRAMMES
In addition to sources of grants for householders (see Box 1), there are a number of funding schemes aimed at helping local authorities tackle fuel poverty, including:

Energy Saving Trust grant programmes such as HECAction, which offers funding to local authorities to help them implement their Home Energy Conservation Act strategies. (The last round of funding for HECAction has recently been announced, but it is expected to be replaced with a similar programme next year). The Trust also has a programme offering support to those setting up CHP schemes in the domestic sector.

Health authorities have funded energy efficiency schemes in a number of areas. For example, the Cornwall and Isles of Scilly Health Authority has provided £300,000 for local authorities to install central heating and insulation measures in homes where children suffer from asthma.

Transco's "affordable warmth" scheme, introduced at the end of 1999, aims to support the installation of insulation and gas-fired central heating systems in up to 1 million homes, using operating lease finance.

SUMMARY
It is shocking that in an affluent country such as the UK, tens of thousands of people should die every year, while thousands more suffer, because they cannot afford to heat their homes sufficiently. Local authorities can play a key role in helping the Government to meet its target of eliminating fuel poverty once and for all within the next 10 years.

Further information on fuel poverty, or any of the schemes mentioned in this article, can be obtained from the Local Authority Energy Advisory Service which offers free advice and support to all local authorities in sustainable energy issues. The service includes a website (www.easiest.org.uk), a quarterly newsletter, monthly E-mail update and an enquiry answering service, as well as a new series of case studies and briefing notes. Contact the service on Tel: 0870 241 2089 or E-mail: energy@easiest.org.uk.