Gearoid Lane speaks at the Committee on Fuel Poverty’s July meeting

28/07/2022

AgilityEco’s Gearoid Lane, recently spoke at the Committee on Fuel Poverty (CFP) to discuss key issues related to the Government’s 2030 statutory fuel poverty target and answer questions.

Gearoid reported the key findings of AgilityEco’s recent independently commissioned research to the Committee.

The research highlights that there is currently a huge funding gap of £18bn+ and that at the current rate of investment the fuel poverty target won’t be delivered until 2050 or beyond. Gearoid recommended that the CFP should commission its own regular independent research on the funding gap and pointed out that an evidence-based demonstration of the gap between funding commitments and what is required to deliver the statutory target would go a long way towards holding government ministers to account.

Gearoid also suggested that the fact that the High Court recently found the government’s Net Zero strategy to be unlawful and in breach of the Climate Change Act could equally be applied to the Fuel Poverty Strategy and the statutory fuel poverty target set out in the Energy Act 2013, especially given that the fuel poverty target must be met by 2030.

Should the Committee continue to focus heavily on the need for better targeting of fuel poverty-related spending?

The Committee questioned whether its heavy focus on better targeting of government spending onto the fuel poor was an absolute priority going forward. Gearoid suggested that, with better data sharing between Government and industry, more could be done to better target spending onto those in fuel poverty. However, he pointed out that data sharing has proven problematic and has made limited progress to date. He laid out three reasons why AgilityEco doesn’t think it is productive to be too heavily focused on targeting:

  1. The people being helped by the various fuel poverty programmes, even if not strictly in fuel poverty in every case, still need a helping hand and the energy price crisis makes their needs even more acute.
  2. People drift in and out of fuel poverty so unless you help more than those in fuel poverty at any time you will miss the target.
  3. In the absence of better data sharing, the more precise the targeting required, the more complex the rules and the higher the delivery cost. So a huge step up in funding is far more important than better targeting.
Can the complexity of ECO4 be reduced?

Gearoid suggested that the key drivers of complexity in ECO4 are all driven by policy aims:

  1. Its attempts to better target fuel poverty.
  2. Its aim is to see a “worst first” prioritisation.
  3. The desire to drive “whole house” retrofit to permanently lift properties out of the fuel poverty energy efficiency ratings.
  4. A drive for better installation quality.

There is therefore a direct trade-off between attempts to improve on these policy objectives and the level of complexity. Gearoid also pointed out that all previous phases of supplier obligations have had their own complexities but nonetheless have been successfully delivered. The important thing is that the industry experts working with ECO understand how the scheme needs to be delivered but are at the same time able to communicate the important information to customers simply and clearly.

What other priority areas should the Committee be considering in the current phase?

Gearoid pointed out that it is vital that LAD/HUG are a success as these funding streams are now comparable in size to ECO, and they are at risk of the Treasury withdrawing future support if delivery in the majority of these programmes doesn’t improve. Local Authority-led delivery will be a very important part of progressing towards the 2030 target, but Local Authorities need more sharing and adoption of best practice approaches in contracting and delivery.

What measures could be taken to drive more rapid investment by industry in skills?

Gearoid suggested that the lack of long-term certainty of funding and the stop-start nature of some funding mechanisms make it extremely risky for supply chain companies to invest heavily in building capacity, and many have had their “fingers burned” in the past. As a starting point, he suggested that ECO should be increased and extended to 2030 to enable supply chain skills investment. However, ECO is a dream compared to the LAD, HUG, and Social Housing Decarbonisation Funding (SHCF) pots which have been released in unpredictable, piecemeal funding rounds with no certainty of continuity. For the industry to invest in recruiting, skilling, and equipping a workforce to deliver whole-house retrofit, it needs two things: (a) a stepped approach to growth in annual delivery targets; and (b) 5-10 years of funding certainty for each new tranche.