Fuel poverty was first identified in the early 1990s when Brenda Boardman suggested that there were 7 million households that could not to afford to heat their homes.1 Since then, there have been a number of policy initiatives designed to tackle the issue. In 1995, John Major's government introduced the Home Energy Conservation Act (HECA), which placed a duty on local housing authorities, designated as energy conservation authorities to improve the energy efficiency of their housing stock. HECA recommended a 30 per cent improvement target in energy efficiency within a 10-year period. This was seen as a significant way to reduce fuel poverty since the energy inefficiency of the British housing stock was recognised as the major cause of fuel poverty.

In 1998, 26 organisations signed a joint "statement on housing" calling on the Government to take further action to tackle the problem and reduce excess winter mortality. One of the signatories, lobby group Friends of the Earth, issued a press release which claimed that: "Fuel poverty is not just ruining peoples' health and quality of life, it is also imposing a heavy burden on our overstretched National Health Service at an estimated cost of ú1bn a year..."2
Partly in response to this pressure, the Labour Government introduced the Warm Homes and Energy Conservation Act 2000, which placed a duty on energy conservation authorities to develop and publish policies for tackling fuel poverty. Tackling fuel poverty was now a key government priority and in November 2002, the Government published its fuel poverty strategy. The strategy set a target of eliminating fuel poverty in vulnerable households within 10 years and to make significant progress in reducing fuel poverty in other households.

WHY TACKLE FUEL POVERTY?
Fuel poverty, or the absence of affordable warmth, has significant impacts on the natural, built and socio-economic environments as well as on health. By eliminating fuel poverty, a number of benefits can be achieved, including:
- a reduction in the level of greenhouse gas emissions, contributing to the UK's commitment to the Kyoto protocol;
- an improvement in the condition of the housing stock, which benefits landlords and owner occupiers by reducing dampness and mould growth;
- a reduction in poverty and low income by reducing fuel costs and disconnections; and
- a reduction in excess winter mortality and morbidity, reducing the costs to the NHS. Arguably, the elimination of fuel poverty would produce significant environmental and health benefits. However, any approach to tackling fuel poverty would require the following:
- an improvement in the income of fuel poor households;
- an improvement in the energy efficiency of the housing stock; and
- a reduction in the cost of fuel.
Furthermore, central and local government and the energy suppliers would have key roles to play in reducing fuel poverty and in assisting those struggling with fuel bills.

IMPROVING INCOMES
Tackling poverty and social exclusion generally are key factors in reducing fuel poverty. The Government has identified a number of measures in its fuel poverty strategy, including measures to reduce unemployment such as the new deal for communities, the national minimum wage, and various tax credits which are aimed at improving the incomes of vulnerable households. There are also personal subsidies from the social security fund, providing one-off payments for vulnerable households that are most likely to suffer in cold weather. These include cold weather payments (ú8.50 for each week of cold weather) and winter fuel payments for pensioners (currently ú200). The problem here is that payments are only made when there are severe weather conditions and are paid after expense may or may not have already been incurred. Fuel poor households however, may choose to spend this money on other essential items. It has also been suggested that these measures alone would not be sufficient to tackle the problem.3

IMPROVING HOUSING STOCK ENERGY EFFICIENCY
The most significant factor influencing the extent of fuel poverty in the UK and the excess winter mortality rate is the poor energy efficiency of the housing stock. According to the Government's own assessment, the average standard assessment procedure (SAP) rating of the stock is 44.9, falling to 42.9 in the lowest 30 per cent income group. The provision of a programme of affordable warmth designed to eliminate fuel poverty is likely to cost in the region of ú15-20bn.3 Given the current rate of expenditure on energy efficiency measures, the earliest that the problem could be resolved would be some time in the next century.
The current approach to improving energy efficiency in the housing stock places the responsibility on local housing authorities under HECA. However, there appears to be little prospect that the 30 per cent improvement target in energy efficiency will be achieved within the time-scale set. The Government's recent decent homes target for social housing and the debate over the thermal comfort standard, combined with the continuing delay in implementing the housing health and safety fitness rating system (HHSRS) (EHJ, February 2001, page 56) to replace the flawed current fitness standard, may indicate the difficulty the Government faces in improving minimum standards for the housing stock. One way forward might be to ensure that the HHSRS, when introduced, delivers a minimum standard for heating as given in the guidance to the existing standard under the Department of the Environment Circular 17/96. Failure to provide such a heating regime could trigger enforcement action under the rating system as proposed. The implication of such a step would clearly be in relation to the resources available to meet such an improved standard.
In relation to the decent homes standard, there is now considerable doubt as to whether the 2010 target can be met following the reaction of tenants to recent proposals for large scale voluntary transfers in Birmingham and Sheffield. Despite the problems relating to housing standards, the Government has introduced a number of programmes designed to assist owner-occupiers and public and private landlords to improve energy efficiency both through the provision of advice and financial resources. These include the energy efficiency commitment (previously the energy efficiency standards of performance), the market transformation programme and the warm front team grant scheme (previously HEES). In addition, other initiatives are being developed by utilities such as Transco's affordable warmth programme, using lease finance for social landlords. There are also a number of non-governmental organisations with a role to play in improving energy efficiency, such as the Energy Savings Trust.

The main problems with these schemes, particularly the warm front grants, relate to the take up and the limitation on the amount of money available to individual households, which means that hard to heat homes, ie those not on the gas supply or those of solid wall construction, cannot be dealt with effectively. Even though the Government has increased the money available, it is still unlikely to be sufficient to deal with the problem in a reasonable time-scale. Funds from housing capital programmes such as the housing investment programme and the approved development programme may be used to finance improvements in energy efficiency of the housing stock. However, in recent times about 60 per cent of funds have gone into council housing, with 25 per cent going to the private sector and 15 per cent to registered social landlords.4 Since the majority of energy inefficient housing is now accepted as being in the private sector, then insufficient funds are likely to be made available through local authority capital programmes to ease the problem.
Furthermore, as there is a commitment to achieve the decent homes standard published in July 2001, much of the funds are likely to be concentrated in the social sector to comply with statutory requirements. There is a call for a decent homes target for the private sector and this is something that the Government is now considering. The introduction of the proposed prudential borrowing regime for local authority capital finance is also likely to influence the amount of money available for private sector renewal. Local authorities will need to establish their own priorities for capital investment and private sector housing may suffer as a consequence. The new Regulatory Reform (Housing Assistance)(England and Wales) Order 2002 may have an impact on the resources available for energy efficiency measures. The fact that there will be no ring-fencing of private sector housing funds nor indeed of housing expenditure may result in a reduction in housing funds in some areas. This already appears to be happening in some parts of Scotland where the provisions are already in force. There is also the potential to utilise other sources of funding for energy efficiency work such as the neighbourhood renewal fund, the single regeneration budget and the new deal.

REDUCING THE COST OF FUEL
A key determinant of fuel poverty is the cost of fuel. The Government claims that over the past 10 years the price of fuel has reduced by 23 per cent in real terms due to the liberalisation of the energy markets and the promotion of competition.5 There are now, however, fears that prices may rise over the next few years, impacting on the numbers in fuel poverty. The Government suggests that a 15 per cent increase in gas prices and a 5 per cent increase in electricity prices could increase the number of fuel poor by nearly one million. Such increases would clearly require a re-assessment of the strategy. An additional problem is that consumers who have benefited most from fuel price changes are not the fuel poor. The fuel poor often have difficulties paying their bills and do not have access to a bank account. Those consumers who pay by direct debit have had increased reductions. Furthermore, the use of prepayment card meters has increased over the past 10 years and while it has actually reduced the number of direct disconnections, it has been criticised for increasing the level of self-disconnection. Initiatives, which have been introduced to alleviate the problem by providing flexible arrangements for the payment of fuel costs, include OFGEM's social action plan, which aims to protect poorer households through the introduction of codes of practice for prepayment customers.

FINDING THE FUNDING
While the introduction of the fuel poverty strategy is undoubtedly commendable, there are, nevertheless, doubts as to its achievability and to the extent of the Government's commitment to it. One of the most serious criticisms stems from the Government's preferred definition for establishing its target, which counts housing benefit or income support for mortgage (ISMI) as part of household income. The definition removes 1 million households from the current figures published in the Government's strategy. The figures published by the Building Research Establishment on behalf of Defra suggest there are 2.8 million households in fuel poverty under the preferred definition as opposed to 3.9 million where housing support is not counted.6 Furthermore, if one takes disposable income to mean that which has taken into account expenditure on essential items such as food, the number rises to almost 7 million. Friends of the Earth has accused the Government of "fiddling" the figures.7 The Government's commitment to a 30 per cent improvement in energy efficiency of the housing stock, proposed under HECA in 1995 has also been thrown into doubt. Michael Meacher in giving evidence to the DTI select committee's investigation into fuel poverty in June this year stated: "There has never been a Government commitment, either by the previous government before 1997 or by our government since, to a 30 per cent target..."8

The Government's reluctance to accept an enforceable target on energy efficiency was further demonstrated in late July, when Des Turner was forced to withdraw his Home Energy (Conservation) Bill, which would have required the 30 per cent target to be achieved "as far as is reasonable practicable". Mr Turner suggested that the Government had feared that such energy saving targets would commit it to spending money it did not have, thus far, little progress has been made towards reaching this target. The Home Energy Conservation Act's fifth progress report, published in June 2002, suggests that between 1996 and 2001 average improvement was less than 10 per cent, with some authorities showing improvements of less than 1 per cent. Funding the elimination of fuel poverty is of the greatest importance. The increased funding for housing announced in the comprehensive spending review while welcome, is unlikely to make much impact on the alleviation of fuel poverty given that ú15-20bn would be required for a programme of affordable warmth alone. Targeting the available funds also remains an issue. Recent research under the new warm zones strategy, introduced in April 2001, suggested that many of the fuel poor households identified were not eligible for warm front team grant assistance. An additional problem is that the amount of grant available is insufficient to deal with difficult to heat dwellings. Such dwellings would probably need at least ú5,000 to be spent on each property.9

The level of funding required remains problematic. However, considering that energy inefficient housing costs the health service an estimated ú1bn per year and that the Government estimates that over the next five years it will pay out almost ú8bn in winter fuel payments, to add to the ú30m paid out in cold weather payments last winter, it seems illogical not to set aside the ú20bn needed. The savings, which could be achieved in the health and social security budgets in the medium term would more than compensate for this expenditure.

REALITY OR FANTASY?
The responsibility for achieving improvements in the energy efficiency of the housing stock lies with local housing authorities. However, because they do not have overall control of the funding available, it is difficult for local housing authorities to develop a coherent strategy. It would be more sensible to introduce a dedicated fund for a programme of affordable warmth by rolling up all existing energy efficiency monies into the fund, which would be administered by the energy conservation authorities. As a result, the Government's commitment to the elimination of fuel poverty by 2010 may be more of a fantasy than a reality. The scale of the problem, depending on whichever definition is being used, the level of resources currently available, and the abandonment of any enforceable target for the improvement in the energy efficiency of the housing stock, would seem to indicate the Government's goal would be almost impossible to achieve.

John Shenton is a lecturer in housing at the University of Salford. The views expressed in this article are those of the author and do not necessarily reflect those of his employer.

References
1 Boardman, B (1991) Fuel poverty: From cold homes to affordable warmth (London, Belhaven).
2 Friends of the Earth, (1998) Fuel poverty and energy inefficiency major killers (press release, 4 May).
3 Boardman, B (1998) "Energy efficiency and fuel poverty". Paper presented to Praseg annual conference.
4 Defra (2002) Home Energy Conservation Act 1995, Fifth progress report data.
5 Defra (2001) The fuel poverty strategy (London, HMSO).
6 Building Research Establishment (2002) Fuel poverty in England in 1999 and 2000 (DTI and Defra).
7 Friends of the Earth, (2002) BMJ research shows need to fight fuel poverty (press release, 11 January).
8 DTI, (2002) evidence submitted to the DTI Select Committee on Fuel Poverty 23 May 2002 (www.eaga.co.uk/whatsnew/trade&ind23MAY 2002.htm
9 Pett, J (2002) Affordable warmth for "hard to heat" homes: Finding a way forward (London, EAGA & ACE).