The Warm Front scheme for improving the energy efficiency of households suffering from fuel poverty has been more successful than the former Home Energy Efficiency Scheme which it replaced in June 2000. However, according to today’s report to Parliament by head of the NAO Sir John Bourn, the scheme is not reaching those in greatest need, the energy efficiency and heating measures offered are not having as much impact as they might and, as a result, the scheme may make less of a contribution to eliminating fuel poverty than it could.
Warm Front is overseen and funded by the Department for the Environment, Food and Rural Affairs (DEFRA) and is an important part of the Fuel Poverty Strategy, which aims to eliminate fuel poverty in vulnerable groups by 2010 as far as reasonably practicable. The scheme assisted over 300,000 households in 2001-02 providing insulation and heating measures to an average value of £445 for each household. This gave each home assisted the potential to save around £150 a year through reduced fuel bills.
The scheme has a high level of customer satisfaction and attracts few complaints but could be made more effective.
- The eligibility criteria for grants could better identify those most in need. Eligibility for grants under the scheme is determined by whether occupants of a household receive benefits such as income support, child tax credits and disability living allowance. But around a third of the fuel poor may be ineligible for help under the scheme because they are not claiming benefit or are not entitled to the relevant benefits. Conversely, between 40 and 70 per cent of households eligible for the scheme may not be fuel poor – because they have a reasonable level of income or live in a household which is already fuel efficient.
- A wider range of measures could be made available. The heating and insulation measures available under Warm Front may be insufficient to move households out of fuel poverty in at least a fifth of cases. These homes receive only energy efficient light bulbs or draught-proofing, saving at most only £25 a year. And, although the range of measures provided by Warm Front is wider than that offered by the previous scheme, it is not well suited to some fuel poor households – principally, those not on the gas network (25 per cent of the fuel poor) and those without a cavity in outside walls (44 per cent of fuel poor households in England).
- Grants could be better targeted towards the most fuel poor or the least energy efficient homes. Because no account is taken of the energy efficiency of the claimant’s home when determining eligibility, only a small proportion (14 per cent in 2001-02) of grants reach the least energy efficient homes where they would have most benefit in addressing fuel poverty. And grants and assistance to the fuel poor in rural areas have been less common because urban areas generate applications more easily.
The report also notes that the Department’s current targets and performance measures do not provide a clear or meaningful view of progress against the Fuel Poverty Strategy. The prime measure of success for the scheme is the number of households assisted by Warm Front rather than the improvements in energy efficiency achieved – a better indicator of the success in moving people out of fuel poverty.
The NAO’s recommendations include the following.
- Targets for Warm Front should be framed around the average improvement in the energy efficiency of the households assisted, as well as the number of homes assisted. Reporting against the target should include only homes where a significant reduction in energy costs has been achieved, helping to move households out of fuel poverty.
- Given the limited amount of data which the Department has about the effect of Warm Front on the actual fuel costs of households helped, it should research whether the scheme has moved households out of fuel poverty, to better inform its scheme design and assess scheme success.
- The Department should review the effectiveness of the scheme’s eligibility provisions and consider concentrating eligibility only on those groups on low incomes as shown by receipt of means-tested benefits.
- The Department should also consider how to concentrate its resources on those eligible homes with the lowest energy efficiency where the most cost-effective improvements can be made, with greater flexibility over the range of measures that can be provided.