Warmer Healthier Homes: A Consultation Paper on a new Fuel Poverty Strategy for Northern Ireland

Transcription

1 Warmer Healthier Homes: A Consultation Paper on a new Fuel Poverty Strategy for Northern Ireland A Response by the Chartered Institute of Housing in Northern Ireland September 2010 The Chartered Institute of Housing (CIH) Northern Ireland is the professional body for people involved in housing and communities. It is a registered charity with a diverse and growing membership of over 22,000 national and international members. The CIH in Northern Ireland has over 500 members working for public, private and voluntary organisations and educational institutions. Our primary aim is to maximise the contribution that housing professionals make to the wellbeing of communities. The CIH seeks to achieve this by supporting a network of professionals in the sector through the development of

2 policy and practice solutions, research, publications, training, events and professional qualifications. Summary CIH Northern Ireland concurs with the Department for Social Development s decision to shape the new fuel poverty strategy around improving energy efficiency and the alleviation of fuel poverty. We strongly support better targeting of resources at those households most affected by fuel poverty. We would endorse the Commission on the Future for Housing s call for a Retrofit Scheme as a means of improving energy efficiency, reducing carbon emissions and alleviating fuel poverty for households in Northern Ireland. CIH Northern Ireland would encourage DSD to explore the use of Pay as You Save schemes to enable householders to carry out energy efficiency improvements with no upfront cost and with a reduced level of government intervention. We would like to see more work done on area-based approaches and the feasibility of implementing such a model in Northern Ireland. CIH Northern Ireland believes that any new fitness standard introduced for the private rented sector must be enforced in order to alleviate fuel poverty in a sector that has high levels of fuel poor households. We would contend that the private rented sector warrants specific attention with regard to fuel poverty interventions and that there should be more of an onus placed on landlords to ensure that their properties are energy efficient. CIH Northern Ireland would agree that improving energy efficiency in the private sector should be a key priority. In relation to placing a greater emphasis on energy efficiency in private sector renewal, we would refer the Department to CIH Northern Ireland s recent paper A New Way of Helping Homeowners: Moving from Grants to Loans for Repairs and Improvement Work.

3 CIH Northern Ireland supports DSD s proposal to incentivise housing associations to build to levels 4 and 5 of the Code for Sustainable Homes, but we are also conscious of the need to ensure that the private sector meets similar standards. CIH Northern Ireland welcomes the Department s plans to introduce legislation that will enable social housing providers to broker energy at a competitive rate for their tenants, but would also like to see similar support for owner-occupiers and tenants in the private rented sector. Introduction The Commission on the Future for Housing noted that fuel poverty represents a deeper and more widespread problem in Northern Ireland than elsewhere in the United Kingdom, with children, lone parents and pensioners particularly badly affected. The credit crunch, significant rises in fuel costs in 2008 and the prospect of continued increases and the ongoing recession are likely to add to levels of fuel poverty in Northern Ireland with the number of households in fuel poverty predicted to be more than 40% in 2009 compared to 34% in In this context, the Department for Social Development s review of the existing fuel poverty strategy with the aim of developing proposals to address future challenges is very welcome. CIH Northern Ireland supports both the Department s recognition that this must be a priority for government and the principles behind the review process. We would also concur with the decision to shape the new fuel poverty strategy around improving energy efficiency as a key area that government can directly and effectively influence. The added benefit of reducing carbon emissions, whilst secondary to the aim of alleviating fuel poverty, is also to be welcomed. Although income and fuel prices are significant factors in contributing to fuel poverty, the potential impact of government interventions is less certain: on this basis it is reasonable to concentrate resources on the area most likely to produce results for people experiencing fuel poverty. Warmer Healthier Homes makes reference to the fact that targets set in the 2004 Ending Fuel Poverty Strategy were not reached, but concludes that this does not necessarily mean that the strategy cannot be viewed as successful. CIH Northern Ireland would agree with this assessment in light of the mitigating factors sharp rises in fuel prices and lack of economic growth resulting in higher incomes and the ambitious premise of ending fuel poverty. Some excellent work has been done in the past six years in relation to fuel poverty and many 11 Northern Ireland Housing Executive, Northern Ireland Housing Market Review and Perspectives , (2010), p.16

4 individuals have benefited from some of the measures implemented as part of the previous strategy. However, the new strategy needs to be more focused and concentrate government interventions in areas where they can help those in most need and make a real difference. We welcome the opportunity to respond to the consultation on Warmer Healthier Homes and hope that our comments will be of value in finalising the new strategy. Rather than attempting to address every question within the consultation, this response will focus on those issues that CIH Northern Ireland has particular comment on.

5 Better Targeting of Resources Warmer Healthier Homes states that resources will continue to be targeted at the most vulnerable in society, defined as those households over 60, those with householders who are disabled or chronically ill and those households with children under the age of 16. However, the Department also states that it will assist those suffering most from fuel poverty first. These two measures may be slightly at odds with each other as single adults appear to be those disproportionately affected by fuel poverty. There are more single adult households in Northern Ireland (and Scotland) than elsewhere in the UK and this group tends to have lower incomes and be more at risk from fuel poverty. Many single adult households will be headed by older people; however, single adult households would not necessarily be defined as vulnerable households. CIH Northern Ireland strongly supports better targeting of resources in order to alleviate fuel poverty for those most severely impacted, even if those most affected do not belong to one of the three vulnerable household groupings. Based upon the 2006 House Condition Survey these would appear to be single older households, single parent households and single adult households and CIH Northern Ireland would endorse DSD s proposed approach of considering the many different contributors to fuel poverty and targeting resources in a more nuanced manner for example targeting resources at lone pensioners rather than all pensioners. Improving Energy Efficiency Warm Homes Scheme Although in excess of 120m has been spent on the Warm Homes Scheme since 2001, 2006 figures (therefore before the record rise in fuel prices) suggest that fuel poverty has increased in all but five of the 26 District Council Areas. Even taking into account mitigating factors such as continued low incomes and higher than average fuel prices in Northern Ireland, this does not suggest that the Warm Homes Scheme has had the desired impact of effectively tackling fuel poverty and energy efficiency. The Commission on the Future for Housing has called for a Retrofit Scheme for Northern Ireland that would directly address energy efficiency, thus reducing fuel poverty levels. One of the criticisms levelled at the first Warm Homes Scheme was that a number of measures introduced to tackle energy inefficiency were not effective in improving energy efficiency or reducing the level of fuel poverty for households. A retrofit scheme could have a number of advantages,

6 not least of which would be providing a more focused approach on energy efficiency. The need to address carbon emissions by improving the existing housing stock is widely recognised. A retrofit scheme for existing stock would complement the work that DSD and DFP are doing to promote low/zero carbon housing in the social rented and private sectors. Such a scheme could incorporate a wider range of measures and renewable technologies. There are ways in which the costs of retrofit can be reduced. The Pay as You Save scheme provides a loan to the householder to carry out energy efficiency work along with a government subsidy of 1550 (this is set in line with the current Carbon Emissions Reduction Target) which reduces the overall cost. The costs of the work (minus the subsidy) are paid back through the householder s energy bill over a 25 year period. There would be no upfront cost to the householder, the loan repayments would always be less than the savings on the household s energy bill and the charge and benefits remain with the property rather than the householder. 2 It is worth noting that the Building and Social Housing Foundation s recent submission on the Spending Review referred to a report published by Consumer Focus in 2009 that found that large-scale investment in a retrofit programme targeting energy efficiency could virtually eradicate fuel poverty in England within seven years. 3 As well as tackling fuel poverty this type of investment would significantly reduce household carbon emissions and create new jobs. 4 The impact on fuel poverty - with its associated costs in terms of health, educational attainment, government interventions to reduce fuel poverty etc. - and the creation of new jobs on a significant scale would mitigate the initial investment in the medium to long term. Although CIH concurs with DSD s approach within the context of Warmer Healthier Homes it is clear that are opportunities within the current economic framework to address energy efficiency on a broad scale that will eliminate fuel poverty in the short-term and ensure that future energy prices have a less significant impact on households. It might also prove beneficial to tackle fuel poverty across all tenures with one scheme rather than the three separate approaches currently run for the private sector, Northern Ireland Housing Executive stock and housing associations. This would allow for a more coherent and consistent approach, reduce administration costs, make access to 2 Theexistinghomesalliance Finance Working Group, Paying for it (2009) 3 Consumer Focus, Raising the SAP: Tackling fuel poverty by investing in energy efficiency (2009) 4 BSHF, Submission to the Spending Review (2010)

7 advice and assistance easier for householders and allow for more accurate monitoring and evaluation of the impacts for households. Boiler Scrappage Replacing non-functioning boilers would be likely to have an impact on both energy efficiency and fuel poverty; however, replacing old, inefficient boilers as proposed in Warmer Healthier Homes would not necessary have the same impact. As the Northern Ireland Audit Office report on the Warm Homes Scheme noted, households where one functional but aged appliance has been replaced by a newer, more efficient one, see little material difference in energy efficiency or fuel costs. 5 We do however acknowledge that an inefficient boiler may have a negative impact on homes where other energy efficiency measures have already been installed. The Boiler Scrappage scheme proposed by the Chancellor in 2009 was designed primarily to reduce carbon emissions rather than address fuel poverty. If such a scheme is to be introduced it should perhaps be used to replace non-functioning boilers and should not exclude those on low incomes who do not receive qualifying benefits. Incentives for this type of scheme are a good idea and should be used wherever possible, rather than government providing grant aid to cover the cost of both buying and installing a new boiler. One possible strategy would be to incorporate a boiler scrappage scheme into the area-based approach model and ask local councils to play a role in funding and implementing such a scheme. Councils already have an inspection role in relation to the private rented sector (one of the areas with the highest levels of fuel poverty) which could assist in identifying households in need of new boilers to improve energy efficiency. This would be particularly useful in reaching rural communities. The draft Regeneration and Housing Bill had outlined plans for councils to be given formal powers to promote and fund domestic energy efficiency schemes within their areas, although the Northern Ireland Housing Executive was to remain the Home Energy Conservation Authority. RPA will not be implemented in 2011; however, this proposal remains a viable way of using an area-based approach to address some aspects of improving energy efficiency and alleviating fuel poverty. Consolidating Partnerships One of the key themes that emerged from the Commission on the Future for Housing was the need for innovative partnerships that cross traditional divides between departments, the public and private 5 Northern Ireland Audit Office, Warm Homes: Tackling fuel poverty (2008)

8 sector, health and social care and housing. Although the support structures around the implementation of the strategy are not subject to consultation, CIH Northern Ireland is pleased to see such an emphasis placed on joined-up government and partnership working within the proposals for the Warmer Healthier Homes strategy. Fuel poverty has direct and indirect impacts on departments such as DHSSPS, DETI, DARD, DEL, DOE and DFP and one of the successes of the previous fuel poverty strategy has been securing buy-in at Ministerial and official level on the issue of fuel poverty. CIH Northern Ireland also welcomes the decision to continue with the Fuel Poverty Partnership Fund approach which helps those people who are unable to access the Warm Homes Scheme or other government schemes but live in fuel poverty. The additional funding provided by private sector partners and the emphasis on social responsibility and long-term benefits is an important example of how the public and private sectors can work well together. With eight existing partnerships in place and plans to build relationships with two more organisations, the only concern would be that managing these relationships could place a strain on resources. However, the principle of working with other organisations to deliver at a policy and practical level has clearly been successful in the past and CIH Northern Ireland would wish to see this inclusive way of working to alleviate fuel poverty continue in the future. Area-based approaches The Department s proposal to explore an area-based approach to energy efficiency improvements is one which CIH Northern Ireland would endorse. The model used by Kirklees Council has been widely commended and area-based approaches have also had some success in Scotland. We would like to see more area-focused approaches introduced by government across the board, building upon the Total Place model. Area-based approaches that are targeted properly are more likely to have a higher rate of take-up, more of an impact on communities as a whole rather than particular sections of the community, reach those in fuel poverty who may slip through the net when other approaches are used and provide opportunities to offer more tailored solutions to individuals which are more likely to be effective in alleviating fuel poverty and improving energy efficiency. Raising the Fitness Standard in the Private Rented Sector As we stated in our consultation response to Building Sound Foundations, CIH Northern Ireland is in favour of introducing the Housing Health and Safety Rating System rather than the Decent Homes Standard for the private rented sector, in part because the

9 Housing Health and Safety Rating System allows for a more consistent approach across council areas. As local councils currently have responsibility for inspecting and certifying properties within the private rented sector, it seems reasonable to adopt a system or standard that is easy for all councils to monitor and enforce. However, the HHSRS is more about preventing hazards and risk and does not include standards relating to energy efficiency. While the Decent Homes Standard does require a reasonable degree of thermal comfort, a better model might be the Scottish Housing Quality Standard which requires that dwellings must be energy efficient - in line with the focus on improving energy efficiency as a key contributor to alleviating fuel poverty. Whichever new fitness standard is adopted the key to a measurable impact on alleviating fuel poverty in the private rented sector will be the extent to which it is enforced. As the private rented sector now comprises between 17 and 20% of the total housing stock in Northern Ireland with potential for further expansion (compared to 16% for social housing) 6 it seems expedient to raise standards in this sector as a matter of priority, particularly in light of the fact that 44% of households living in privately rented accommodation were in fuel poverty. 7 This is significantly higher than in the housing stock as a whole and suggests that the private rented sector warrants specific attention with regard to fuel poverty interventions. Although individual tenants in receipt of a qualifying benefit can apply to the Warm Homes Scheme for assistance, there should perhaps be more of an onus on landlords to ensure that their properties are energy efficient. Support for Energy Efficiency in the Private Sector Warmer Healthier Homes makes reference to the fact that there should be a greater emphasis on repair and improvement work in the private sector contributing to energy efficiency. CIH Northern Ireland would agree that energy efficiency in the private sector should be a key priority, particularly as dwellings in the owner-occupied sector have a lower SAP rating than other tenures. However, as our paper on the private sector grants system - A New Way of Helping Homeowners: Moving from Grants to Loans for Repairs and Improvement Work - discussed there is likely to be considerably less funding available for private sector grants in the future. 8 Any steps taken to factor greater 6 Figures based on the preliminary findings of the 2009 House Condition Survey 7 Figure taken from the 2006 House Condition Survey 8 Rachel Terry, A New Way of Helping Homeowners: Moving from Grants to Loans for Repairs and Improvement Work (CIH Northern Ireland, 2010),

10 energy efficiency into repair and improvement work undertaken by owner occupiers will need to be cognisant of the fact that the current grants system is unlikely to be sustainable in the long-term. It is likely that a package of measures will be needed to replace the existing arrangements, one of which may be a loans-based system. It may prove more difficult to incentivise households to factor in energy efficiency improvements if they are taking out loans rather than receiving a grant. Warmer Healthier Homes proposes exploring the feasibility of introducing an equity release scheme to allow homeowners to carry out energy efficiency improvements. This would target those people who are unable to apply for assistance through the Warm Homes Scheme. CIH Northern Ireland welcomes both the recognition that more must be done to help those households living in or on the edge of fuel poverty that are not in receipt of qualifying benefits and the move towards helping those households access resources to make improvements to their property that will enhance its energy efficiency. A New Way of Helping Homeowners examines some of the benefits and challenges of using equity release schemes and may be of interest when developing further policy around this issue. One possible difficulty in introducing an equity-release scheme may be falling property values, even though it is likely that many older householders will not have mortgages on their properties. Owner occupiers may be reluctant to release value from their homes in an uncertain housing market. Code for Sustainable Homes CIH Northern Ireland would support incentives for housing associations to build to Level 4 or Level 5 of the Code for Sustainable Homes. Maximising the benefit of public investment is an increasingly important issue when public expenditure is constrained. Housing association stock has the lowest levels of fuel poverty across the housing sector in Northern Ireland (at 21%) and the highest SAP ratings. It is reasonable to assume that this is due to the level of new stock and the increased emphasis on meeting higher standards of sustainability in recent years. We concur with DSD that continuing to build social housing to the highest possible standards in order to achieve energy efficiency is an effective measure to help prevent fuel poverty. CIH Northern Ireland would like to see private sector housing meeting similar standards to social newbuild housing in terms of sustainability and energy efficiency. Ensuring that the highest possible standards for new private sector homes are being adopted in Northern Ireland and that energy efficiency and alleviating fuel poverty are priorities for the private sector is vital. Measures such as DFP s step to offer rates relief on

11 low and zero carbon homes are to be welcomed and encouraged, but there is potential to build upon some of the positive steps to date. We understand that building regulations are not within DSD s remit, but there is perhaps scope for greater partnership working with both the department with responsibility for building standards and other private sector organisations such as the NHBC Foundation. Linking zero and low carbon targets with the alleviating fuel poverty agenda is important to ensure that long-term benefits for households are not missed and also that a significant gap does not emerge between standards in social and private sector housing. Energy Brokering The Commission on the Future for Housing was strongly in favour of negotiating with energy companies to ensure improvements in energy rates. CIH Northern Ireland welcomes the Department s plans to introduce legislation that will enable social housing providers to broker energy at a competitive rate for their tenants, but would also like to see similar support for owner-occupiers and tenants in the private rented sector. Conclusion CIH Northern Ireland welcomes the review of the fuel poverty strategy and the opportunity to comment on the proposals outlined within Warmer Healthier Homes. The focus on alleviating fuel poverty through increased energy efficiency of households in Northern Ireland with better targeting of those suffering most from fuel poverty in order to make better use of resources is one which we would endorse. The ongoing commitment to partnership working, facilitating energybrokering and introducing area-based approaches are all positive steps in tackling fuel poverty and building upon the work of the previous strategy. CIH Northern Ireland would stress the need for innovation and bold measures in order to address what is likely to be a growing problem and hope that the Department will continue to be proactive and progressive in addressing fuel poverty. This response comments on a number of areas in which there are potentially some questions to be raised or further steps to be explored and we would be happy to discuss further if that would be helpful. For further information, please contact Jennie Donald, Policy and Public Affairs Officer, Chartered Institute of Housing in Northern Ireland on or at jennifer.donald@cih.org