Fuel Poverty Takes ‘A Huge Step Backward’

Orkney produces 120% of its energy needs by renewable sources, mostly wind, and yet fuel poverty not only blights many households but it is getting worse. The Scottish Government has produced a Fuel Poverty Strategy. Will this be ambitious enough to ensure people are adequately supported and a Just Transition is achieved?

Image credit Martin Laird

To heat your home in Orkney in 2011 , the average bill on Total Control Heating cost £740. Today that price has hiked up to £1,780.

The cost of the heating units has increased from 7.04p in 2011 to 18.4p in 2021, meaning that a person using the same amount of electricity to heat their home as they did for £740 in 2011 will have to find £1780 this year. That is a 161% increase in the cost of heating units in 10 years, and 21% in the past two years.

The economic effects of the Covid19 pandemic has increased the number of homes which will be plunged into fuel poverty and extreme fuel poverty. This will have a negative impact on the health and well being of many, including a rise in preventable deaths.

Cold and damp homes add to respiratory illness. Being unable to heat your home to a tolerable level means that many in Orkney and across Scotland will suffer not just through this winter, but into Spring as energy companies go bust and prices are hiked up.

Appearing before the Scottish Parliament’s Social Justice and Social Security Committee, Robert Leslie, Director of THAW Orkney presented the following evidence of the real effects of rising fuel prices on islanders.

In his submission Robert Leslie said:

“Along with Orkney’s wetter and windier climate, old and hard-to-treat housing stock, higher living costs and lower incomes, our lack of fuel choice gives us some of the highest fuel poverty rates in the country.

“With the ending of the Universal Credit uplift and the rocketing of electricity prices, we are anticipating at least the same level of demand this winter, and beyond.

“This year we have already heard of folk turning off their electric heating and using makeshift heating sources involving biofuel cans, which raises issues of fire safety as well as affordable warmth.

“We have also had a case where a client referred to us for emergency electricity support had turned off everything possible – including heating – while they awaited a refund from the NHS for the cost of electricity to operate essential medical equipment in their home.

“This kind of choice shouldn’t be happening anywhere, but especially not in a community that annually generates more clean green electricity from renewable sources than it can use – around 130% latterly.

“THAW Orkney staff say that the majority of clients they are dealing with right now are self-rationing, self-disconnecting, or using some kind of coping strategy to stay warm.

“We are in the process of ordering up duvets to put in our Cosy Home Packs instead of blankets, partly due to rising prices or non-availability of the thermal blankets we used to get, but we also think folk will find them useful if unable to heat their homes 24/7.

“We are seeing a significant increase in need for electricity support already, for example, vouchers issued via the Fuel Bank Foundation, for which we are a referral partner, have stepped up from seven in each of August and September, to ten in October and eight in just the first two weeks of November. The Fuel Bank Foundation has increased the value of vouchers from £30 to £49 from November, which is a help, but this is still based on usage in a dual fuel house somewhere on the UK mainland, and doesn’t go so far on electricity up here, where folk could be spending £8 to £10 a day or more maybe. Folk are allowed up to three vouchers within a six-month period.

“In recent weeks we have also had a property on one of Orkney’s islands that has a porch that is not in a fit state to be insulated or draught-proofed, and yet there is no funding available nationally or locally at this time that will remedy this for this client.”

The Parliament’s committee was taking evidence so that they can respond to the Scottish Government’s Proposed Fuel Poverty Strategy.. The MSPs heard from representatives of organisations supporting people struggling to pay their fuel bills: Alastair Wilcox (senior policy officer Citizens Advice Scotland), Robert Leslie, Manager, THAW Orkney, Elizabeth Leighton, Director, Existing Homes Alliance Scotland, and Frazer Scott, Chief Executive Officer, Energy Action Scotland.

You can find the details of the meeting here: Social Justice and Social Security Committee, 25th November 2021

Pre-Payment Meters

Those who use pre-payment meters will be particularly hard hit by the rises in energy prices. Many turn off their heating during summer to save on costs. When these get turned back on in Winter, due to the standing charges that mount up, when people turn these back on all that will happen is the payment card all goes towards the standing charge. The heating will not come on till that is paid.

Frazer Scott said that those on pre-payment meters are more likely to be in fuel poverty. He said that support should be more targeted to those who need it and ‘view it as a package of support’. He said that we should be seeing ‘more equity’ by focussing on ‘making the biggest impact.’ He reminded the MSPs that the cost would be in lives lost as we are facing a ‘huge step backwards in fuel poverty… and extreme fuel poverty.’

The SPICe briefing states:

22 energy suppliers have gone out of business due to this significant increase in costs, as the Ofgem price cap prevents companies from passing on the full wholesale price increase to customers. This is a significant number – greater than the total number of failures in the UK energy market over the last three years. The price cap is set twice per year, and rose on 1 October. This impacts customers through three channels:

  1. Those on prepayment metres will see an immediate increase in the price they pay. The prepayment price cap rose to £1,309
  2. Those on variable or standard tariffs will also see an immediate increase in price. The price cap for those on these tariffs rose to £1,277.
  3. Customers on fixed term deals will be protected from price increase, provided their energy firm is not one of those who have failed. If a customer’s energy firm fails, Ofgem guarantee that supply will be maintained and arrange for another energy company to take on all customers – but this does not protect customers from a change in their tariff.

All those presenting their evidence to MSPs said that the proposed strategy would fail to meet the targets for reducing fuel poverty.

Tackling Fuel Poverty in Scotland

Robert Leslie explained:

“From my first reading of Tackling Fuel Poverty in Scotland – a strategic approach, I am heartened to see the recognition of the differing rates and depths of fuel poverty across Scotland, and the ambition of the Scottish Government to address that where it has the powers, and to demand change from the UK Government where powers remain reserved.

“A longer-term solution to fuel poverty that has been hinted at during recent workshop sessions around Orkney’s Child Poverty Action Plan is on increasing the energy efficiency of Orkney’s emergency housing stock, around 70 units at present.

“THAW Orkney receives a high level of referrals from emergency housing due to the nature of the situation these folk are in as well as the poor energy efficiency of many of the units they are put in, along with high rents due to the fact that they are fully furnished.

“Ensuring folk are lifted out of poverty in such situations would often require five figure sums to sort houses ahead of energy efficiency work and would be hugely expensive in areas like Orkney.

“In addition, we would need to see a massive increase in our trades workforce. The supply chain is thin right now, with new-builds keeping local firms busy. Retrofit needs to be made a more attractive option, and having a local workforce would be key to issues of trust, given the outcome of previous schemes where firms came in, did a poor job, and left.

“The provision of enabling measures will also require intensive work by trusted, local organisations such as THAW Orkney to work with vulnerable households to secure the funding and get work done ahead of energy efficiency work. This would require additional funding for staff time as from recent experience unless the process becomes streamlined it is very time-consuming.

“If the strategy is to reduce poverty in Scotland, then UK action is critical in some key areas.

“A fundamental example for those on electric heating would be the removal of environmental and social obligation costs from electricity bills and onto gas or into general taxation, which would make a huge positive impact on households in Orkney who are self-rationing or self disconnecting this winter, and possibly next summer if the price cap increases to levels being forecast.

“I understand that there are discussions ongoing around this between consumer bodies, Ofgem and HM Treasury, but any changes might be 18 months away – so another two winters. I did suggest to a civil servant in the Affordability Unit of the Department for Business, Energy and Industrial Strategy, during an Energy Consumers Commission meeting back in April, that Orkney should a pilot area to remove these charges on household bills, as a way of acknowledging this energy injustice being done to islanders who live in such an energy-rich community.

“I’m not holding my breath on that.

“Without going into too much more depth, the actions already in place and those planned to raise household incomes by putting money in the pockets of those that need it most is really encouraging.

“THAW Orkney staff are looking forward to the reopening of the Scottish Government’s Home Heating Support Fund, from which we were able to secure almost £25,000 in a month last year, helping wipe out significant debt and give households some breathing space.

“The actions listed under raising household incomes, and the idea of Community Wealth Building – especially if this secures energy efficiency work for local firms rather than firms from the Scottish mainland – will go a long way to creating more stable economic conditions for many families, giving them the breathing space – to deal with other issues in their lives.

“The crossover between fuel poverty, child poverty and food insecurity are well recognised in a community like Orkney and the fact that these are seen as interlinked in the strategy is welcome and should go a long way to breaking down some of the silo thinking around these issues. It is all about poverty and folk having to make choices they shouldn’t need to.

“The strategy is ambitious, and the scale of work can’t be underestimated, but organisations such as THAW Orkney can play a key role in reaching the households that need to be reached as part of the work outlined within the table of actions.

“However, to allow such Third Sector organisations as ourselves to play a key partnership role in ensuring this strategy and its actions do effectively address poverty in Scotland, longer term funding periods would be crucial.

“At the moment, as outlined above, THAW Orkney has funding to the end of this financial year, probably in common with many other similar organisations. Funding of such organisations for at least 3-5 years would allow for planning ahead for the kind of intensive work required at a local level in communities throughout Scotland.”

THAW Orkney has an incredible record for supporting islanders since its inception:

THAW Orkney secured over £344,000 to support clients in 2020-21, covering the pandemic lockdown period. This helped with energy costs, income maximisation, heating systems, and white goods – including:
• £28,948 of emergency electricity vouchers
• £3920 of Warm Home Discount
• £3288.99 of Fuel Bank Foundation heat fund for oil or solid fuel
• £24,774 from the Scottish Government’s £4 million Home Heating Support Fund
• £43,232 of Attendance Allowance
• £19,681 of Personal Independence Payments
• £10,080 of Employment and Support Allowance
• £7,599 of debt written off SJSS/S6/21/11/3 2
• £2000 of Council Tax reductions
• 132 Cosy Home Packs
• 22 new heating systems and 37 new energy efficient white goods under the SSE-funded Aiming Beyond Cancer (ABC) projec

The 778 emergency fuel awards secured for households last year were worth over £57,000, compared to just over £6000 of electricity vouchers issued in the previous year, so an increase in demand for support of around 850%.

You can watch the committee proceedings here: Social Justice and Social Security Committee – 25 November 2021

The Fuel Poverty Strategy sets out policies and proposals for national Government, Local Authorities and third sector partners to help us collectively make strong progress towards these targets. This covers:-
• Actions to make progress now on the four drivers of Fuel Poverty
• Actions to ensure fewer people are at risk of Fuel Poverty in the future by making systemic change
• Actions to ensure that we continue to make progress to tackling Fuel Poverty at the same time as we decarbonise the way we heat and power our homes

Fiona Grahame

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