Closer to home – devolving delivery of energy efficiency and fuel poverty services

‘Closer to home’ presents the results of a study commissioned by Citizens Advice to investigate national models for locally-led delivery of energy efficiency and fuel poverty services. Led by the Association for the Conservation of Energy with support from CAG Consultants, the Centre for Sustainable Energy and Dr Joanne Wade, the research comprised in-depth interviews with 40 expert stakeholders, five workshops and a survey of 70 local authorities – to develop proposals for a framework to govern greater locally-led delivery.

• Download the executive summary
• Download the full report

Introductory blog by William Baker, Head of Fuel Poverty Policy at Citizens Advice, accompanying the publication of ‘Closer to home’:

The referendum for Scottish independence has sparked debate over the devolution of central government powers to local government in England. The current government has announced plans to devolve a range of powers to Greater Manchester, other city regions and some county councils covering rural areas. It is a debate Citizens Advice is well placed to comment on. Day in, day out bureaux work with local councils, health providers, social and private landlords and many others to address the problems our clients encounter. Many of these problems could be dealt with more effectively with greater autonomy for councils and other local agencies.

There are good reasons why 79 per cent of people trust local leaders to make the right decision at a local level. Greater local control enables more innovation, an increased sense of ownership and better management. The delivery of energy efficiency and fuel poverty services is a case in point. We have long argued that the current almost complete reliance on fuel companies in England to deliver energy efficiency measures to the fuel poor is not working. It is not reaching the most vulnerable or the worst housing, not providing the major home improvements many of the fuel poor desperately need and not linking up with the other services, such as benefits or debt advice, people on low incomes also require. Furthermore, it is failing to realise local opportunities to lever in additional resources to address the problem, such as public health and regeneration funds.

In 2012, we commissioned the IPPR to explore how the delivery of energy efficiency might be improved. The report of their research, Help to heat, proposed transferring responsibility for delivering energy efficiency from fuel companies to local agencies, alongside other reforms to the current Energy Company Obligation (ECO) and Green Deal initiatives. We thought there was much merit in IPPR’s proposals. We therefore commissioned a further study by a consortium – led by ACE Research with the Centre for Sustainable Energy and CAG Consultants – to provide more detail as to how a local delivery model for fuel poverty and energy efficiency services might work.

The report of the research, Closer to home, has now been published. The extensive research programme involved interviews with local authorities, fuel companies, housing associations, academics, national and community NGOs and many others. It involved a survey of councils throughout England, Scotland and Wales and the holding of five regional/devolved nation workshops and a final policy workshop to test emerging ideas.

The central recommendation of the report is that the UK government should give local authorities in England responsibility, through a statutory duty, for overseeing the delivery of energy efficiency improvements to low income households. This is the system that essentially already exists in Scotland, although councils there face a constant challenge of trying to make fuel company ECO programmes and their own programmes work together.

Closer to home recommends funding the programme through a levy on consumers’ energy bills. Funding out of public expenditure would be fairer but is seen as unlikely given the government’s priority to reduce the national budget deficit. However, consumers should not notice any difference to their energy bills since the report proposes the levy would either partially or fully replace the ECO, estimated to add £30 per year to the average household bill.

The UK government should allocate proceeds from the levy to England, Scotland and Wales on a proportionate basis. The Scottish and Welsh governments would take responsibility for distributing their share of the funds – this should be relatively straightforward given that they already have systems in place for local delivery. In England, the UK government should allocate funds to local authorities according to need, while introducing a small competitive fund open to all local organisations to encourage innovation and improved practice. It should also set up a national support programme for households that might miss out from local schemes, as a safety net.

Finally the report proposes the UK government appoints an existing national body to oversee the new arrangements in England, check progress, monitor compliance and provide support. It should also encourage and provide guidance on how councils might lever in funds from other sources, such as public health and regeneration, and link in with other local services, such as advice.

We think the report’s proposals have many merits. There are a range of issues that still need addressing, not least local authority procurement procedures. However, we also know that some of the most innovative and far-reaching fuel poverty projects are those emerging from local initiatives. They just need a national framework and resources to realise their full potential and replication across the country. And with the current ECO programme due to end in 2017, now is the time to start looking at alternative or at least mixed supplier/local delivery arrangements.

The government sees housing as one of the key areas in which councils should have new powers under its embryonic devolution proposals. Matching supply and demand and addressing affordability are likely to be central concerns. However, the affordability of fuel, the urgent need to address the ‘cold homes’ crisis and the central role of energy efficiency in tackling the crisis should also form part of these concerns. We urge the government to work with us, councils and other stakeholders to come up with workable solutions.