Chapter 5: Delivering equitable support and tackling...

[ALEO Admin]

...fuel poverty through the Green Deal and ECO

Questions from "Chapter 5: Delivering equitable support and tackling fuel poverty through the Green Deal and ECO" of the Green Deal Consultation are given below. If you have any comments on these questions please post them here.

More information including the full consultation documentation is available at:
http://www.decc.gov.uk/en/content/cms/c ... _deal.aspx.

31. Do you agree that eligibility for Affordable Warmth measures should be restricted to households who are in receipt of the benefits and tax credits similar to the CERT Super Priority Group and who are in private housing tenures?

32. We propose seeking a voluntary agreement with ECO obligated companies as to how they commit to following up referrals. Do you have any suggestions as to what this commitment should consist of?

33. Do you have any evidence or views to put forward on whether the benefits of ECO as a whole, or of the Carbon Saving obligation within it, are or are not likely to be distributed equitably to all income groups? If so do you think regulatory intervention is necessary to ensure a more equitable pattern of delivery and, in particular, do you have any comments on the likely effectiveness of setting a ‘distributional safeguard’ as a means of achieving this?

[David]

As part of the consultation process NW CAN offered to look indepth at Chapter 5. We held a workshop meeting in Manchester on the 13th December 2011 and discussed in groups some of our thoughts. The results of will be presented below by Monday 9th January.

[Paul]

In my view it would be very restrictive to keep the eligibility for Affordable Warmth measures restricted to households who are in receipt of the benefits and tax credits similar to the CERT Super Priority Group whether in private housing tenures or not. Too many house holders fall into fuel poverty traps because they are just out side benefit catchment yet still have poor incomes. Such groups of people can be aged couples or single people over retirement age. They can also be younger people struggling on low incomes with little savings or chance to save. A much broader out look is needed on the eligibility criteria for ECO

[David]

Question 31 - Do you agree that eligibility for Affordable Warmth measures should be restricted to households who are in receipt of the benefits and tax credits similar to the CERT Super Priority Group and who are in private housing tenures?

The proposed amount is too small, needs to be a larger amount, £325m is not enough to cover fuel poor and this will replace Warmfront so there will be no other programmes to deal with the fuel poor.

There are lots of poor people who can’t afford to heat or improve their homes that are not on benefits. It needs to be means tested but not benefit tested. SPG is not flexible enough – Warmfront does not help enough people as it is and the criteria are too restrictive (finding eligible clients is difficult as many have already had work done).

We mostly agree that the affordable warmth element should only be for private tenure, due to the higher standards of social housing. But we have concerns about Social Housing – how are the tenants going to be assessed or helped out of fuel poverty if no Affordable Warmth element?

In the private rented sector similar people – similar consumption may live in the property but this is not likely all the time and we have concerns about who takes over payment in future years and their ability to actually save.

This whole approach misses the learning of area based approaches. Complete area based approach for both benefit recipients and able to pay owners who may be on a slightly higher income but cannot afford works will lead to higher take up and neighbourhood improvements – stop “pepper potting” as the individual benefits are easily lost to the area.

[David]

Question 32 - We propose seeking a voluntary agreement with ECO obligated companies as to how they commit to following up referrals. Do you have any suggestions as to what this commitment should consist of?

The Green Deal legislation provides a market opportunity for providers to offer loans against energy bills. The ECO is an obligation on utilities and the artificial linking of the two is a concern. The obligation gives the utilities the market advantage as potential GD providers to control ECO payments and exclude certain players and therefore this needs to regulated not left to a voluntary agreement.

The proposals and DECC representative have alluded to a brokerage system and we understand this is for 50% of the obligation. The conflict is still there. We know under CESP many utilities offer differential rates if you just sell the carbon saving or you use their contractors. In other words whilst its an obligation and they have to procure on the open market its undistorted, when they procure from themselves the market can be distorted. We propose the whole amount £1.3 billion be passed to a third party for complete transparency. However this changes the obligation [ECO] from a delivery requirement to a payment, charge, levy or tax.

There is as yet no requirement for GD assessors to ensure a home is not eligible for ECO and we see this as major flaw which could lead to unintended consequences therefore we propose that GD assessors have a responsibility to ensure households are vetted for ECO eligibility.

[JohnMathers]

Hi All,

P59, item number 50 addresses the point about householders not having to pay for a Green Deal Assessment if the best solution for these customers does not involve Green Deal Finance. Anyone qualifying for measures under the Affordable Warmth obligation should be provided with this information as early as possible in the Green Deal Process.

Unlikely that anyone eligible for Affordable Warmth obligation would ever apply for a Green Deal in any case. Also DECC know the details of everyone who would be eligible for Affordable Warmth obligation, so why not just contact them directly?

John.

[David]

Question 33 - Do you have evidence or views to put forward on whether the benefits of ECO as a whole, or of the carbon saving obligation within it, are or are not as likely to be distributed equitable to all income groups? If so, do you think regulatory intervention is necessary to ensure a more equitable pattern of delivery and, in particular, do you have and comments on the likely effectiveness of setting a “distributional safeguard” as a means of achieving this?

Historically unless the system is a grant, or universal subsidy (such as CERT operates), the benefits of the obligations have predominantly gone to the highest bidders and hence are unlikely to reach the most needy areas unless there is some sort of regulation. Therefore we feel there is a need for some sort of Distributional Safeguard. There is a moral obligation to ensure this, as the ECO will be paid for out of all bills but this will have a disproportionate impact on those on low incomes.

Essentially 75% of the £1.3 billion will be used to subsidise the golden rule in hard to treat homes and the cost of that spread across all users. We have significant concerns that those that will in reality benefit will not only be the able to pay but actually the fuel rich (those that spend more and hence the higher cost insulation measures make more sense at that those thresholds). In essence if your gas bills are £600 [but should be closer to £800 but you cut back as you cannot afford it] there is little room to make significant savings, where as if your gas bill is £1,000 there is significantly more room for manoeuvrability. A typical solid wall insulation benefit of £300 per annum is more easily realised.

We propose that under the Carbon Saving element each ECA, (Energy Conservation Authority as defined by the HECA legislation 1995) be able to determine areas of priority based on local need that addresses those areas of greatest need. This would return an area based approach to green deal and ensure a more equitable distribution and fulfil the distributional safeguard. This would also provide a direct link between GD providers and the community through the ECA. It would also provide a means for ECA to monitor this annually through HECA returns and advise and feedback on the rollout of GD. Each ECA should be able to define vulnerable areas based on local priorities (although we suggest this should be informed by guidance from DECC).

[ALEO Admin]

Below are some comments received via email from Paul Maplethorpe, East Pennine CAN Chair:

Chapter 5
Q32 should be given a time frame with strict set response times and penalties for slipping