Weekly News Review - 2nd December 2022

Government announce £1bn funding for least efficient homes

Business secretary Grant Shapps has announced a new £1bn scheme designed to provide insulation to the UK’s least efficient homes. The ECO+ scheme is targeted at households that do not currently benefit from any other government support. To be eligible for support a house must have an energy efficiency rating of D or below and be in one of the lowest council tax bands.

The ECO+ scheme is in addition to the current ECO scheme which aims to support vulnerable and low income households. It will involve a survey by energy suppliers with recommendations such as cavity wall and loft insulation. The scheme is set to begin in April 2023 and will run for three years with grants up to £15,000 per household available.

The UK is considered to have the oldest and least efficient housing in Europe following a drop in government support for efficiency measures over the past decade. Fuel poverty campaigners have welcomed the announcement but are concerned that more should be done to support vulnerable households.

Adam Scorer, chief executive of National Energy Action, said: “The scheme is not designed to reach the most vulnerable, it’s designed to reach people who haven’t been able to benefit from previous schemes. We believe government focus should be on the worst first, helping people in the greatest risk, the greatest jeopardy, more of this money should be going to help them.”

Ed Miliband, the shadow climate change secretary, said: “This reheated announcement with no new resources is far too little too late and will help only a tiny fraction of the millions of people facing a cost-of-living emergency this winter. Labour’s warm homes plan would insulate up to two million homes a year, saving pensioners and families up to £1,000 off their energy bills.”

The business secretary also announced a new £18m public information campaign to advise households on how to reduce energy consumption. The guidance will include reducing boiler flow temperature from 75°C to 60°C, turning down radiators in unused rooms and draught-proofing windows and doors to reduce heat loss.

3 million households to be in fuel poverty from April

Following the planned rise in energy bills in April 2023, a report has found that around 3 million households will be considered fuel poor. This means they will be paying more than 10% of their household income on gas and electricity bills. The reduction in government support for energy bills is a major contributor to the projected rise in fuel poverty.

Chancellor Jeremy Hunt announced in his autumn budget that the Energy Price Guarantee (EPG) will be increasing in April from £2,500 to £3,000 a year for a typical household. He also confirmed that the £400 grant paid to all households this winter would not be continued into next summer. However, support for vulnerable households and those on benefits would remain after April.

The report from the Social Market Foundation found that 12 million households would face falling into fuel poverty when prices increase, however around three quarters of these are eligible for government support. However, that leaves 3 million households, containing over 7 million people, facing crisis-level energy costs.

The report argues whether this level of fuel poverty is sustainable, saying: “Politicians must put in place long-term policies to provide targeted financial support for millions of households for what could be a decade of painfully high energy bills.”

Dame Clare Moriarty, chief executive of Citizens Advice, said: “Longer term, we must ensure people can keep their homes warm and their bills down. The best way of doing that is by insulating cold and draughty houses.”

Energy supplier E.ON also reported this week that they have seen households reduce consumption by 10% to 15% so far this winter in an attempt to offset the large rise in energy bills. However, the unseasonably mild weather in October and November has made analysing consumer behaviour more difficult.

Michael Lewis, chief executive of E.ON said: “It’s quite a big effect. We’re analysing our data and trying to understand what’s happening. It will likely be people putting the heating on for shorter periods or turning down the thermostat in their home. Those are the two big levers.”

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