NEA Fuel Poverty Forum Policy Update February 2012

Transcription

1 NEA Fuel Poverty Forum Policy Update February 2012 Rebecca Jones Project Development Coordinator

2 Price rises complete Domestic energy prices 2013 Supplier Current bill New bill Effective from 3,300 kwh of electricity and 16,500 kwh of gas on a standard dual fuel tariff. British Gas 1,260 1,336 November EDF Energy 1,202 1,332 December E.ON 1,260 1,370 January npower 1,244 1,356 November ScottishPower 1,349 1,368 December SSE 1,235 1,354 October ,258 1,352 Average

3 Other fuel types Average price of space and water heating alone (2011) Oil: 1,511 Coal: 1,181 LPG: 1,915 Electric: 1,228 Oil/Coal/LPG//Oil - Based on 3 bed house 117,900 kwh for space and water heating alone

4 Policy in Flux! Warm Front just about to end Cert ended Green Deal and ECO started Energy Bill due Fuel Poverty Strategy due before summer Reviews, Reforms and Inquiries..

5 Fuel Debt Scale and Impact Scale Ofgem (Q ) 692,567 = electricity 700,751 = gas Average Debt 354 = electricity 377 = gas Increase in debt over 600 Copyright NEA 2013

6 Reviews, Reforms, Inquiries Select Energy and Climate Change Committee Inquiries into Green Deal Domestic energy prices, supplier profits and fuel poverty Office Of Fair Trading OFT - Energy Efficiency: Empowering Consumers, Encouraging Growth Fuel Poverty Action Group 10 th Annual Report

7 Retail Market Review Ofgem main proposals: 4 core tariffs per fuel Include 1 standard variable tariff 1 fixed rate tariff 2 tariffs at discretion of energy suppliers E.g. could include a green tariff Single price for each tariff although Discounts will be permitted on dual-fuel arrangements or lower-cost payment methods Encouraging collective switching

8 Retail Market Review SIMPLER CHOICES Ban on complex multi-tier tariffs and scrapping of uncompetitive dead tariffs All tariffs shown as a standing charge and single unit price Limit each supplier to 4 core tariffs per fuel Single price for each tariff discounts based on dual fuel or lower cost payment methods Must include one variable rate tariff and one fixed rate tariff

9 Retail Market Review CLEARER INFORMATION All consumers given their supplier s cheapest tariff on their bill and estimated savings they could make if they switched to it A Tariff Comparison Rate to compare tariffs like for like across the market New improved annual statement with personalised information to help consumers find their best deal

10 Retail Market Review FAIRER TREATMENT Fair treatment to be enforced by standards of conduct backed by fines Consumers to default to cheapest tariffs at the end of fixed term contracts Ofgem to consider ways to promote more collective switching

11 Labour s Real Energy Market Review Abolish Ofgem & Replace with tough new energy watchdog Power to force energy companies to pass on price cuts when wholesale costs fall Require energy companies to pool power they generate & Make it available to any retailer to open up the market Make it more transparent Require energy companies to put all customers over 75 on their cheapest tariff saving up to 4 million pensioners up to 200 on their annual energy bills

12 DECC Better deal for energy consumers Discussion document seeks views on proposals to ensure consumers get the cheapest energy tariffs and looks at: Simpler tariffs and the cheapest tariff for consumers Clearer information More help for vulnerable consumers Helping consumers switch Facilitating collective purchasing and switching Third party intermediaries

13 Collective Switching Switching companies - (Which?) approach suppliers to get a better price reverse auction. Individual households switching has gradually declined and collective switching is seen as an avenue to address this issue. The first major switch organised in June 2012 by Which? Resulted in 95,000 registering with 37,000 doing so and achieved an average saving of 233 per annum

14 Green Deal Inquiry Committee on Energy and Climate Change Inquiry into Green Deal. What are the best indicators of progress, and how to measure e.g.: Take-up Accessibility Energy/carbon savings Closed, but interesting results.

15 Inquiry - domestic energy prices, supplier profits and fuel poverty. Energy & Climate Change Committee seek evidence on following issues: Is Gov t on track to meet its fuel poverty targets? Has Hills review resulted in any changes in fuel poverty policy? To what extent are current policies reaching the right people? Will proposals to ensure consumers are on cheapest tariff impact on fuel poverty? To what extent do fuel poor households engage in switching? Written evidence is to be submitted by February

16 Other inquiries Office Of Fair Trading OFT - Energy Efficiency: Empowering Consumers, Encouraging Growth Identified certain practices that fail to meet consumer law and undermine consumer confidence Further investigation into areas of concern Guidance published for consumers Compliance guidance reminders to companies

17 Sound advice but deaf ears? FPAG 10 th Annual Report HECA

18 Green Deal and ECO update Guardian newspaper survey of the 24 companies listed as domestic assessors found (of the 18 that were contactable) - 5 will charge between 95 & 150 for upfront assessment fee. 11 not able to answer the question, 1 (Mark Group) plans to offer the assessment for free & 1 company mistakenly listed as a provider on the government's website.

19 ECO and Equity Two recent reports suggestion the cost of ECO to the Government (the bill payer) will be higher than expected. Energy UK say 94 p/a on the bills rather than 53. IPPR say poor targeting is a big factor and more area-based approaches would help.

20 Energy UK ECO report Energy UK asserts actual annual cost of the Energy Company Obligation (ECO) will be considerably higher than the DECC assumption of 1.3 billion The report attributes the higher cost to a number of factors including: Actual installation costs of the different insulation measures The extent to which the customer is willing to pay The real demand for various energy efficiency measures Scope for energy efficiency improvements in the housing stock The potential for bundling different projects Search costs incurred by suppliers in locating eligible customers The Costs of the Energy Company Obligation

21 Selling the Green Deal to UK households Key Findings - UK Energy Research Centre Jan 2013 A key assumption that market barriers are holding back a flood of demand for energy efficiency in homes - is overly simplistic. The biggest motivating factor in the decision to renovate is to improve domestic life Up to a third of decisions to renovate are triggered by specific events For homeowners planning to renovate, the Green Deal is an attractive option Contractor reliability, and avoiding hassle and disruption to domestic life, are the most important factors.

22 Fuel Poverty Summit - Edinburgh Ed Davey restated the UK Govt s approach in tackling fuel poverty Help with costs (winter fuel payments, cold weather payments, Warm Home Discount) Energy efficiency (ECO, Green Deal) GD good for fuel poor because it will create new market and will drive down costs through competition Competition (tariff reform, collective switching) very keen on latter: made it a condition of recent Council competition that bids had to show how their initiatives would help fuel poor

23 Fuel Poverty Summit - Edinburgh Ed Davey restated the UK Govt s approach in tackling fuel poverty Change to fuel poverty definition through Hills: good for policy development, sets priority for action, focus on those in deep fuel poverty Claimed that fuel poverty advocates support Hills definition?? Costs of ECO: Government looked at methodology used by IPPR and found it flawed. Govt will review ECO costs once scheme has bedded down.

24 Fuel Poverty Summit - Edinburgh Ed Davey restated the UK Govt s approach in tackling fuel poverty Low income off-grid consumers will benefit from renewable heat incentive and growth of oil clubs All key Government departments will be involved in new Fuel Poverty Strategy: focus on how to identify fuel poor, best proxies, local authorities and third sector will play a key role because they can help build trust

25 CERTifiably SPG? CERT compliance for Super Priority Group targets varied from 12.2% to 62% Ofgem to the rescue! Suppliers can automatically attribute 32% of their social housing work to SPG because trend shows 33% of social housing tenants will be on a qualifying benefit. Ofgem s approach is pragmatic and to some extent understandable, but it masks a failure on the part of suppliers to identify and assist the most vulnerable and financially disadvantaged energy consumers.

26 CERTifiably SPG? Figures to April 2012 Ofgem Aug 2012

27 CERTifiably SPG? Figures to April 2012 Ofgem Aug 2012

28 CERCERTifiably SPG? Figures April 2012 Ofgem Aug 2012

29 CERTifiably SPG? Figures to April 2012 Ofgem Aug 2012 CERT compliance for SPG targets varied from 12.2% to 62%. Ofgem to the rescue! Suppliers can automatically attribute 32% of their social housing work to SPG because trend shows 33% of social housing tenants will be on a qualifying benefit. Ofgem s approach is pragmatic and to some extent understandable, but it masks a failure on the part of suppliers to identify and assist the most vulnerable and financially disadvantaged energy consumers.

30 Latest excess winter death figures Estimated 24,000 EWD England & Wales 2011/12 8% reduction from 2010/11. Higher in females - as in previous years. Between 2010/11 and 2011/12 Male EWD decreased from 11,270 to 10,700 Female EWD decreased from 14,810 to 13,300 The majority aged 75 and over; 19,500 EWD in this age group in 2011/12 4,500 in the under 75-year-olds. The excess winter mortality index (% increase rather than number) was highest in London in 2011/12 & lowest in North East. Source ONS, Nov So far, November and December 2012 mortality rates are lower than previous years 2011.

31 The cost of cold Age UK has calculated that the estimated cost to the NHS in England arising just from cold homes is around 1.36 billion per year. Cold, damp, thermally inefficient houses which people cannot afford to heat sufficiently to protect their health are a peculiarly British public health scandal.

32 Warm Homes Campaign National Fuel Poverty Awareness Day, February 1 st Warm Homes Campaign throughout February NEA can help: Promote your event through our website With materials and briefings Provide advice on getting ministerial attendance

33 Interesting reports Age UK, The cost of cold: Why we need to protect the health of older people in winter, IPPR, Energy efficiency: who pays and who benefits? 2012 EC Joint research Centre, Heating and cooling: Best available technologies in Europe, 2012 Institute for Sustainability, Retrofit Insights, 2012

34 Jenny Saunders OBE As chief executive of NEA her leadership, energy and dedication have ensured that the plight of those unable to afford to keep their homes warm does not go unnoticed and that action is taken to help.

35 Overview of the Welfare Reforms Allyson Whisker Partnership Development Manager (North) Citizens Advice

36 Outline What s Happening? What is Citizens Advice doing?

37 Welfare Reform The scale of change is huge. Biggest reform of social security for over 60 years 18 billion is to be cut from the welfare bill by 2014 Every area of the benefit system is set to change Already an impact on thousands of families and individuals across the UK

38 Main Changes Universal Credit New Will Will Tougher benefit replace all means tested benefits and tax credits be paid to people both in and out of work sanctions will be introduced, tying claimants more closely to labour market activity.

39 Main Changes Universal Credit Couples made up of pensioner working age will be a working age household instead of a pensioner household. This could mean losses in excess of 100 per week for some.

40 Main Changes Housing Benefit Several Planned Changes Under Direct changes introduced savings of 2 billion by in the way housing benefit rates are set will mean that fewer properties will be available or affordable to rent within the rates available. Occupancy Payments

41 Main Changes Disability Living Allowance (DLA) Will be replaced by a new Personal Independence Payment (PIP) Budget for this benefit will be cut by 20 per cent from its current level. Entitlement will be based on a new face-to-face medical assessment. Around one in six current DLA claimants will not qualify for PIP.

42 Main Changes Employment and Support Allowance (ESA) Contribution-based Around ESA will be time limited to one year 300,000 people assessed as disabled or too ill to work will lose over 95 each week as a result

43 Main Changes Council Tax Benefit National benefit will be replaced by localised schemes Current budget (less 10 per cent) Local authorities can decide how their local scheme will operate Only pensioner households are protected Working age households with full help - likely to pay at least 20% from 2013

44 Main Changes Social Fund Some aspects abolished Budgets devolved to local authorities No requirement to provide any specific support

45 Main Changes Benefit Cap No one will receive more money out of work than the level of average wages Currently set at 500 a week for a family and 350 for a single person The implication that a family can receive more when out of work than in work, is not the case The few families who do receive more than 500 when out of work would also receive that level of benefits on top of their wages when in work

46 Action by Citizens Advice Welfare Reform Programme and Programme Manager to lead and coordinate activity across the service. Citizens Advice lobbied extensively as the Welfare Reform Bill passed through Parliament Secondary legislation is yet to be laid out and there is still much more work to be done Supporting CABx locally to help them work with their LAs on the development of localised schemes and to share good practice

47 Action by Citizens Advice Seven key objectives: secure funding for Citizens Advice and the bureau network influence policy to achieve the best results for the public including a structured campaign approach update information sources and provide additional tools to support the advice process

48 Action by Citizens Advice produce training to meet the needs of bureaux develop new services to meet the needs of the public develop capacity in bureau network to deliver services develop key partnerships to reduce duplication and costs

49 Action by Citizens Advice Scoping the impact of the reforms on our service Talking to other organisations in the sector about joint working Question of physical capacity to meet demand Linking with a range of other initiatives within the service including financial inclusion work.

50 Workshop Energy & Climate Change Committee inquiry 1. To what extent are current fuel poverty policies reaching the right people? Are there any particular groups that are currently not getting the necessary support? And will this change under the move to ECO? 2. What support is available for fuel-poor households living in solid-wall and hard-to-treat properties? Could this be improved? 3. Will the Government s proposals to ensure that consumers are on the cheapest tariff have any impact on fuel poverty? 4. To what extent do fuel-poor households engage in switching? What are the barriers to greater levels of switching from these groups?

51 Potential opportunities in the new NHS structure 7 February 2013 John Kolm-Murray Seasonal Health & Affordable Warmth Co-ordinator

52 Background Largest shake-up in the NHS since its foundation Return of public health to local government after forty years absence GPs to be responsible for 65 billion of NHS money from April Establishment of local Health & Wellbeing Boards Creation of Joint Health & Wellbeing Strategies Opportunities to engage with new structures

53 Funding Local health and care services Us Local strategy Guidance

54 Health & Wellbeing Boards Forums where key leaders from the health and care system work together to improve the health and wellbeing of their local population and reduce health inequalities Each top tier and unitary authority will have one HWBs will have strategic influence over commissioning decisions across health, public health and social care Will bring CCGs and councils to develop a shared understanding of the health and wellbeing needs of the community. They will undertake the Joint Strategic Needs Assessment (JSNA) and develop a joint health & wellbeing strategy, including recommendations for joint commissioning and integrating services across health and care.

55 Clinical Commissioning Groups Replace Primary Care Trusts Move to clinician-led commissioning Responsible for buying most health and social care services for their local populations All GP practices will have to belong to a CCG. Individual CCGs will not normally work across local authority boundaries but may work with other CCGs to commission services over a larger area One or more CCGs in each top tier/unitary area Must involve HWBs in their commissioning plans Have their own strategies

56 NICE National Institute for Health and Care Excellence Produces guidance on a range of health topics. Taken very seriously across the world From this month working on guidance on excess winter deaths and illness reduction, to be published in January 2015 Guidance will be of massive benefit Local authorities are represented on the Advisory Committee

57 Public Health Outcomes Framework Sets out the desired outcomes for public health and how these will be measured. It concentrates on increased healthy life expectancy, and reduced differences in life expectancy and healthy life expectancy between communities Fuel poverty (wider determinants domain) and excess winter deaths (reducing premature mortality domain) are included in the PHOF Allows local authority areas to be compared on a number of outcomes Lots of other outcomes related to fuel poverty e.g. respiratory health, hip fractures

58 Why is this relevant to us? Including fuel poverty and seasonal health in your local Health & Wellbeing Strategy would be significant Opportunities for greater alignment between fuel poverty and winter deaths agendas CCGs are sources of funding Health sector engagement has always been challenging

59 Opportunities Flux is a time of opportunity Inclusion of fuel poverty and excess winter deaths in JHWS If not specifically included, link to what is e.g. long term conditions, early years, mental health Align fuel poverty to CCG strategies e.g. primary care, close to home. Talk their language, not ours Make the most of links developed through Warm Homes, Healthy People Programme Bid for money!

60 What else is being done? NEA health event on 28 th February National Right to Fuel Campaign and NEA working on health economics assessments FoE/Energy Bill Revolution engaging with national organisations on guidance End Fuel Poverty Coalition, Age UK, CAN and CIEH working to influence national agenda London Affordable Warmth & Health Action Plan

61 Seasonal Health Interventions Network Running in Islington (and Hackney) 3,050 Islington referrals since December 2010 Package of 27 interventions Part-funded by Public Health in development period One member of staff funded through NHS Reablement money Two years of DoH funding through WHHPF Bid currently going through CCG

62 Lets work together

63 Recent CF Energy retail work February 2013

64 Why sponsor the NEA fuel poverty forums? Consumer Focus is the statutory watchdog for energy consumers We want to: help you to help consumers create opportunities to facilitate sharing of information and what works learn from the experiences of your clients, and use this to inform our work on energy policy 2

65 What do we do to help consumers? Consumer Focus provides a range of information, support and tools to help and empower consumers when they communicate with, or make decisions about, their electricity and/or gas supplier. interactive FAQ, your energy questions consumer facing leaflets letter templates for energy consumers (and some specifically for advice providers) Online helpfinder Information on switching energy supplier Information about energy supplier performance. 3

66 What do we do to help advisers? Consumer Focus supports advisers and frontline staff on the phone and on line: Username: Adviceprovider Password: Info4you Advanced version of your energy questions Adviser factsheets Consumer Community network Presentations Policy into Practice 4

67 What do we do to help advisers? Ask the adviser telephone support service Provides guidance to advice agencies dealing with postal or energy complaints on behalf of their clients Can advise on how best to challenge a supplier and details of relevant legislation Not a referral service allows advisers to retain case handling. 5

68 The Future of Consumer Focus In April 2013 Consumer Focus will become the Regulated Industries Unit focusing only on essential regulated markets mainly Energy and Postal Services In Autumn 2014 the RIU will transfer to Citizens Advice Consumer education services will transfer to Citizens Advice in April 2013 but the RIU will still run the Extra Help Unit Name?

69 Key areas covered in our annual plan We are currently consulting on the RIU workplan for 2013/14 -industries-unit-draft-work-programme-forconsultation 1. Understanding and tackling consumer disadvantage in key markets consumer vulnerability, energy affordability 2. Meeting the costs of infrastructure and renewal 3. Challenges of complex markets in a digital age

70 Consumer Focus Energy Retail Team what we do

71 Energy retail Team what we do Helping consumers in in debt review suppliers debt polices, work to improve things for PPM customers, credit referencing work, review of the Priority Services Register (PSR) Research into customers experience of retail energy market billing, tariffs, sales and marketing Small businesses Market monitoring

72 Current projects Time of Use Tariffs 13% of consumers surveyed have a ToU tariff Economy 7 the most common ToU tariff 38% get no benefit from their ToU tariff Over half of ToU customers would like better information Consumers with storage heaters more likely to experience problems with their tariff and heating Consumers with storage heaters also more likely to be from lower income groups and more likely to be in rented homes.

73 Time of Use tariffs - recommendations Energy suppliers should improve information provided to ToU customers and tools to help customers assess if they are better off on a ToU tariff or not Energy suppliers should proactively contact those customers who are not using enough off peak electricity to benefit from their tariff Consumer Focus should further investigate experience of dynamic tele-switching (DTS) customers Low income consumers with poorly functioning storage heating and low energy efficiency should be specifically targeted for ECO funding Further research needs to be done on the impact of smart metering on ToU customers

74 Current Projects Private Tenants and the energy market Key issues: 1. Churn 36% of private tenants only live in their address for 12 months or less 2. No security of tenure Most private tenancies are 6-12 months 3. Inability to carry out improvements without landlord permission 4. Multiple Occupancy 5. Lack of relationship with their energy supplier

75 Private tenants and the energy market Omnibus survey Omnibus survey of 5825 people carried out by TNS- RI for Consumer Focus in December 2012 Private tenants characteristics 20% of households in GB rent privately (29% in London) Private tenants most likely to be under 30 40% of under 30 s rent privately Private tenants are more likely low to middle income 9.5k 30k 42% of private tenants had been in their property for a year or less.

76 Private tenants and the energy market Omnibus survey Private tenants and the energy market 33% of private tenants have ever switched supplier less than other tenures 4% of private tenants have a contract that forbids them to switch energy supplier 22% of private tenants use a PPM (more than the average of 15%) 40% of private tenants who use a PPM did not request a new top up card/key when they moved in 16% of private tenants pay their landlord for energy rather than an energy supplier 39% of private tenants do not give their details to their energy supplier when they move in to a new property

77 Private tenants and the energy market Omnibus survey Private tenants and energy efficiency 49% of private tenants had heard of an EPC and 29% remembered seeing one last time they moved house. 23% of all private tenants questioned had asked their landlord to make energy efficiency improvements 65% got the improvements they asked for 18% of private tenants with a cold property would consider energy efficiency improvements to help address this 32% were aware that they could apply for energy efficiency grants themselves - awareness was higher amongst over 55 s Only 19% of those aware of grants actually applied for one

78 Private tenants and the energy market Omnibus survey Private tenants and heating 20% of private tenants described their home as cold or very cold more than other tenures The main reasons given were poor insulation (51%) or unable to afford to heat the property (31%) Most common consequences of cold homes for private tenants were higher heating bills (59%) and damp and mould problems (21%) higher than other tenures Private tenants were most likely to respond to cold by buying supplementary heating (21%) or consider moving to a new property (18%)

79 @CFenergy Consumer Focus t Victoria House, f Southampton Row contact@consumerfocus.org.uk London WC1B 4AD