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ACE response to the Hills Fuel Poverty Review Interim Report

ACE welcomes the work by Professor Hills and many of the findings within the Interim Report; particularly that fuel poverty is a distinct problem from poverty in general. Whilst we acknowledge that the existing definition of fuel poverty is potentially overly sensitive to changes in fuel prices and broadly welcome the new approach that combines households with both low incomes and unreasonable fuel costs, we have several concerns with the definition Hills proposes.

Most notably:
The use of an absolute equivalised energy need to determine energy costs is not an effective measure. The ‘energy need’ within the English Housing Survey (used to determine fuel poverty numbers) does not require equivalising. The approach also puts undue weight on the size of households, prioritising the largest rather than the least efficient.
The median threshold set by Hills is not credible, being both insufficient in determining ‘unreasonable’ costs, and set in such a way as to make eradication impossible through reducing energy need in fuel poor households.
The new definition is under-sensitive to fuel prices: it is wrong that fuel poverty numbers would only be marginally affected by policy costs added to bills by Government.

In order for the approach proposed by Hills to create an acceptable definition of fuel poverty, the following adjustments need to be made:
* Energy need should be measured in £/m2, better reflecting a combination of occupancy factors and energy efficiency without equivalisation of fuel costs.
* The ‘reasonable costs’ threshold should be set in relation to the energy need (£/m2) of the most efficient households, with a margin to allow energy efficiency to improve and fuel poverty numbers to fall.
* Hills must establish how to adjust the definition to ensure it remains sensitive to the costs levied on bills by Government. Fuel poverty numbers should be sensitive to these costs.

The full response can be found here


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