Government move to split multi-billion pound fund in two threatens green deal
Landlords to be blocked from fuel poverty funding
The government is planning to exclude social landlords from accessing millions of pounds of funding to tackle fuel poverty.
Inside Housing understands the coalition is splitting the energy company obligation, which will subsidise retrofit works as part of its £7 billion a year green deal, into two pots - one of which will be used for ‘hard-to-treat’ measures such as solid wall insulation, and another called ‘affordable warmth’ which will be used to reduce fuel poverty.
Despite the fact that millions of social tenants are fuel poor - meaning they spend more than 10 per cent of their household income on fuel bills - and have low incomes, the Department of Energy and Climate Change does not plan to allow social landlords to obtain subsidy from the affordable warmth fund.
This is because social housing is more energy efficient than most homes in the private sector due to works already undertaken by landlords.
ECO, which will be funded by energy companies taking cash from consumers’ fuel bills, is replacing existing funding including the carbon emissions reduction target and community energy saving programme which landlords have benefited from.
The details of the value of the overall ECO fund and how it will be split between the two pots are expected to be announced at the end of the month.
This will be in a consultation on the government’s green deal scheme in which private companies pay for retrofit works and recoup the costs through the resulting energy bill savings. WWF said ECO needs to be worth ‘several billion’ for the green deal to work.
Landlords, many of which consider alleviating fuel poverty to be key to their social purpose, have warned that the green deal may fail without sufficient subsidy.
Sally Hancox, director at Gentoo Green, said: ‘It doesn’t seem very fair. This could make it very tricky to deliver the green deal without access for social landlords.’
The National Housing Federation and the Local Government Association are both lobbying the government to allow ‘open and fair access to all parts of ECO’ on the basis that everyone pays their energy bills.
A DECC spokesperson said: ‘We need to ensure that this element of ECO support is targeted at the group where it is most needed and can make the most difference.’
‘The consultation document will discuss the various considerations at play here, and put forward proposals on how an appropriate target group can best be defined. This could include using indices such as benefit status or tenure type.’
Fuel poverty by tenure
According to figures for 2011 from the Communities and Local Government department, 4 million households in England are classified as being in fuel poverty (18 per cent of all households). The average proportional break down of fuel poor by tenure in the three years to 2009 is:
- 20 per cent of owner-occupier households are in fuel poverty
- 17 per cent of social rented households are in fuel poverty
- 15 per cent of private rented households are in fuel poverty