Housing an Ageing Population in Wales

Housing an Ageing Population in Wales The Welsh Government s Expert Group on Housing an Ageing Population has requested views from stakeholders on a number of questions relating to housing options for Wales s growing elderly population and I have pleasure in submitting a response from National Energy Action (NEA) Cymru. About NEA NEA and its sister charity Energy Action Scotland are the only charities in the UK which are solely dedicated to eradicating fuel poverty for the 4.5 million low income and vulnerable households living in cold homes which are expensive to heat and hazardous to health. Now in its 35 th year NEA works throughout Wales, England, and Northern Ireland to influence and increase strategic action against fuel poverty and the charity works collaboratively with supporters and partners from a wide range of sectors to improve access to energy advice, training, and energy efficiency products and services. Our work in Wales For the past four years NEA Cymru has trained over 600 frontline advisors and community workers throughout Wales to enable them to help clients, including many vulnerable older people, struggling to pay their energy bills. It is estimated that over 140,000 customers will be assisted as a result. During 2015-16, we upskilled 94 advisors who gained a formal Level 2 City & Guilds accredited fuel debt qualification, expanding the expertise of the fuel debt advice sector in Wales. Moreover, over 700 people in Wales s most deprived areas have been assisted with practical energy help at community events. Our wider policy and stakeholder engagement work includes hosting the only fuel poverty focused annual conference in Wales to enable stakeholders to share ideas, explore policy initiatives and fuel poverty solutions which can be implemented in Wales. Background to this response NEA Cymru s primary focus is on those households in fuel poverty (spending more than 10% of household income on heating the home) or severe fuel poverty (needing to spend more than 20% of household income on heating the home). Therefore, this response focuses on 1

Question 4 in relation to how older people can be kept warm in their homes through energy efficiency improvements and related support. ( Question 4: Old age often means fixed incomes. How can older people be supported financially to fund home improvements or to move house? ). NEA Cymru makes the following recommendations to the Expert Group on Housing an Ageing Population to ensure older people can be kept warm in their homes: Invest in a well-resourced, well-targeted energy efficiency programme for fuel poor households in Wales as an infrastructure priority Introduce a Wales wide emergency heating crisis fund to protect vulnerable older households when their health is at risk Introduce a Healthy Homes Strategy to co-ordinate action to address the health impacts of cold homes Save lives by implementing the NICE guidelines to on tackling excess winter deaths and cold related illness Fuel Poverty in Wales In July 2016 the Welsh Government released new statistics to estimate the levels of fuel poverty in Wales. 1 The results showed that fuel poverty levels decreased from 29% (364,000 households) in 2012 to 23% (291,000 households) in 2016. The vast majority of these households are deemed to be vulnerable (261,000 households), which includes households containing older persons and those who are disabled or have a long term illness. The Welsh Government has a statutory target to eradicate fuel poverty by 2018. However, with the Nest energy efficiency investment programme assisting 6000 homes a year, it will take another 50 years to assist all fuel poor households in Wales. Although fuel poverty affects a wide range of people it can be particularly acute for older people living on a single income and in a large energy inefficient home which is expensive to heat. How older people are affected by Cold Homes In July 2016 the Welsh Government released research to identify which low income households are most at risk from living in cold homes and therefore likely to be in the greatest need of home energy efficiency improvements. 2 The research identified older adults as a particular at risk group. There are a number of reasons why older people are particularly at risk. This is because retired older people are more likely to spend more of their time in the home, so may need to spend more of their income on heating to keep the house at a comfortable temperature. 1 The production of estimated levels of fuel poverty in Wales, Welsh Government, July 2016 2 Understanding the Characteristics of Low Income Households Most at Risk from Living in Cold Homes, Welsh Government, July 2016 2

In 2012 the Chief Medical Officer (CMO) for Wales recognised the effect that fuel poverty has on health and recommended the implementation of a healthy homes strategy to ensure co-ordinated action for the most vulnerable people: "Many factors can affect our health at home: poverty, second-hand smoke, fuel poverty and energy efficiency, damp, food hygiene, the threat of crime, such as domestic abuse or a burglary, or even the fear of crime... I would like to see them brought together in a single healthy homes strategy. 3 The CMO highlighted the importance of examining the home as a setting to improve and protect health and emphasised that as a devolved issue this is something that Wales can lead on. NEA Cymru reiterates this call. Excess Winter Deaths In March 2015 the National Institute for Clinical Excellence (NICE) published its public health guidance on Tackling Excess Winter Deaths, Morbidity and the Health Risks Associated With Cold Homes. 4 NICE outlined a number of comprehensive recommendations on how health and social care practitioners can act to reduce the risk of death and ill health associated with living in a cold home. The Fuel Poverty Coalition Cymru has continued to campaign for the Welsh Government to save lives by implementing the NICE guidelines on tackling excess winter deaths. Wales has unacceptably high rates of Excess Winter Deaths (EWDs) with an estimated 2600 EWDs in the winter of 2014-15, an increase of 157% on the previous winter, and the highest figures since 1999-00. Most deaths are in the over 65 s with the over 85 s most affected. The World Health Organisation has suggested that approximately 40% of these deaths can be attributed to inadequate housing. 5 Many of these deaths can be prevented if we improve the thermal efficiency of homes. Not only are older people more likely to live in cold homes but older people are also more likely to be vulnerable to the harmful effects of living in cold homes. The health consequences of living in a cold home include increased risk of heart attack, stroke or other circulatory illness; increased risk of developing a respiratory condition; weakened immune system; misery, anxiety and mental health problems; and mobility problems, often resulting in accidents or falls. Housing quality also suffers when the residents cannot afford to heat the home. Cold homes are more susceptible to damp and condensation, leading to mould growth, as well as deterioration of the property, and increased maintenance and repair costs. Emergency Heating Fund The Coalition has also called on the Welsh Government to ensure vulnerable households in Wales have access to a Wales wide crisis fund for emergency heating. During cold winters it 3 Wales outgoing chief medical officer urges healthy homes, BBC Wales online article, July 2012. Available from http://www.bbc.co.uk/news/uk-wales-18736870 4 Excess winter deaths and morbidity and the health risks associated with cold homes, NICE, 5 March 2015 5 Housing, Energy and Thermal Comfort, World Health Organisation, 2012. Available form http://www.euro.who.int/ data/assets/pdf_file/0008/97091/e89887.pdf 3

is vital that crisis heating support is provided to vulnerable households to ensure that their health is not endangered if the heating system breaks down, or if they are unable to be discharged from hospital because their home is too cold. An example of such a scheme is provided by the Flintshire Affordable Warmth Programme, which provides a crisis fund for people who cannot afford to heat their homes and need immediate support. Help includes a boiler repair or replacement, installation of heating systems, and upgrading heating controls. The fund is used flexibly, depending on the needs of the client as opposed to strict qualifying criteria. Energy Efficiency Schemes There have been a variety of UK and Welsh Government energy efficiency schemes over the years to improve the energy efficiency of homes. These include the Green Deal, Energy Company Obligation, Nest, and Arbed. The Expert Group should examine the lessons to be learned from the experiences of the Green Deal initiative which the UK Government launched in 2013 to make homes more energy efficient. Home energy efficiency improvement loans were offered to able to pay households at no upfront cost with the customer repaying the loan through a charge on their energy bill. The initiative was hailed as the biggest home improvement programme since the Second World War. However, by July 2015 the Department of Energy and Climate Change ceased financing the company which issued the green deal loans due to low take up, with just over 15,000 issued or in progress. Since then the UK Government has commissioned Dr Peter Bonfield to chair an independent review into consumer advice, protection and standards around energy efficiency schemes. It has been set up to address some key concerns regarding quality of installations, the appropriateness of advice and remedies when things go wrong. Throughout the design and implementation of the Green Deal, NEA outlined a number of concerns, in particular, that fuel poor households may be directed towards a Green Deal finance arrangement when it is not appropriate for such households. Current support for energy efficiency improvements NEA believes Improving the energy efficiency of Wales s ageing housing stock is the only sustainable solution to address fuel poverty in the long-term. Under the Welsh Government s Warm Homes Programme (Nest and Arbed) older people living in privately owned or privately rented properties and on a low income can be supported to heat their homes more affordably through the Next scheme. Eligible households need to be on a means tested benefit and the property needs to be very energy inefficient with an Energy Performance Certificate rating of E, F or G. Households can receive a whole house energy improvement package of measures, including central 4

heating boilers, insulation for hot water cylinders, loft, cavity wall and solid wall insulation, draught proofing for doors and windows and renewable energy technologies. The Nest Annual Report for 2015-16 shows the breakdown by age of householders receiving a home energy improvement package. 6 In 2015-16, over 6000 households received such a package and 47.1% of these households were aged 60 and over. The Welsh Government s Living in Wales survey in 2008 (last date available) found that 40% (139,000) of households aged 65 and over were in fuel poverty. According to the new estimated fuel poverty figures if 40% of older households were in fuel poverty in 2016 this would equate to 116,400 households. In March 2015 the Welsh Government published an independent evaluation report into Nest. 7 The aim was to determine if the scheme was able to reach the households most in need. Although the aim of the scheme is to offer a whole-house approach in reality this has often not been achieved, with the majority of households receiving only a single measure. Around 30% of properties receiving a measure were improved to SAP ratings C+. Therefore, whilst the scheme has supported fuel poor households in the short-term, there is a risk that where the number of interventions completed for some households was limited, this will prevent the full benefits of heating being realised and left households vulnerable when fuel costs rise. Nest monitoring data also suggests that a greater proportion of those initially enquiring about the scheme were in fuel poverty than those who eventually received a measure. This suggests that a substantial proportion of those reporting that they were in fuel poverty did not receive household improvements. The Coalition has commended the investment in energy efficiency programmes over the past few years by the Welsh Government under Nest and Arbed despite the difficult economic climate. The schemes have made a clear difference to people s lives. Ahead of the Assembly elections in May 2016, the Coalition campaigned for the continuation of the energy efficiency schemes and recommended that domestic energy efficiency be made an infrastructure priority utilising any new tax and borrowing powers. The coalition is concerned that to meet the fuel poverty challenge faced in Wales, the next Welsh Government needs to invest substantially more than current levels. Welsh consumers contribute a significant amount to the UK Treasury from levies on their energy bills ( 1.4 billion over the next 10 years) and the Welsh Government should lobby the UK Government to return this revenue to be directly spent on expanding resources for energy efficiency programmes to help more households in need. Energy Company Obligation (ECO) 6 Nest Annual Report 2015-16. Welsh Government. Available from: http://nestwales.org.uk/sites/default/files/nest- Report_2016_English_04%20Final.pdf 7 Evaluation of the Nest energy efficiency scheme. Welsh Government, March 2015. Available from: http://gov.wales/statistics-andresearch/evaluation-nest-energy-efficiency-scheme/?lang=en 5

The ECO is a UK Government energy efficiency scheme to make homes in the UK more energy efficient and is funded through a consumer levy on domestic energy bills, resulting in increased cost for many vulnerable people already struggling to heat their homes. It is delivered by obligated energy suppliers (those with more than 250,000 domestic customers). Under ECO, grants are available to cover all or part of the cost of energyefficiency measures (boilers, loft, cavity wall insulation, solid wall insulation, double glazing. Although NEA was successful in helping to secure a commitment from the UK Government that the ECO should be focused on fuel poor households, NEA is concerned that resources under the scheme are insufficient to meet statutory fuel poverty targets. Resources for ECO will be cut to c. 640m per annum. This follows a previous reduction in 2014 when the budget was cut by a third; from the original notional spend of c. 1.3bn per annum. Older people and income support measures Additionally accessing cheaper energy deals and energy tariffs which could save hundreds of pounds a year is a particular challenge for many older people who may have limited or no access to the internet, or lack the confidence to engage with online switching and price comparison websites. Following an investigation by the Competition and Markets Authority (CMA) into the energy market a number of improvements have been recommended. 8 The CMA s investigation found that consumers were paying 1.4 billion a year more than they should be for their gas and electricity bills in a fully competitive market, with 70% of domestic customers of the BIG 6 energy companies still on an expensive default standard variable tariff. The CMA has rightly highlighted that energy is an essential service but many customers including older people are currently excluded from signing up to the cheapest deals. In particular NEA has highlighted that many low-income consumers are also not on pre-payment meters and need to benefit from extra support, fairer and cheaper tariffs as well. NEA Cymru s experience in providing face to face energy advice to communities in Wales has shown that older people are less likely to switch energy provider staying loyal to one of the BIG 6 energy providers. They are also more likely to value good customer service. Some older people have had bad experiences in the past by switching providers including being billed twice, and others are worried about losing out on support like the Warm Home Discount. An example of how older households can be supported to understand their energy usage and save money on energy bills is provided by Ymlaen Ceredigion. In June 2016 NEA Cymru supported a research seminar to disseminate the findings of a project run by Ymlaen Ceredigion, in partnership with Ceredigion Council and Aberystwyth University. The research details the evaluation of a six month home energy coaching project using a behaviour change approach to improve household energy usage in 40 electrically heated homes with poor energy efficiency in Ceredigion. As a result of the project 41% of participating households decreased their electricity consumption while maintaining or 8 Energy market investigation Final report, June 2016. Competition and Markets Authority. Available from https://assets.publishing.service.gov.uk/media/5773de34e5274a0da3000113/final-report-energy-market-investigation.pdf 6

increasing mean living room temperature. An example of how the project helped a retired pensioner is detailed below: Case Study Warm Home Discount Older households can also benefit from income support measures such as the Warm Home Discount Scheme (WHDS). In April 2011 the WHDS was introduced to provide a fixed rebate off electricity bills for low income older households which for winter 2016-17 is 140. The core group who receive the rebate are older people in receipt of Pension Credit with specified components. The policy is paid for through a levy on energy consumers and is delivered across Great Britain. However, many people are missing out on benefits such as pension credit and housing benefit and it has been estimated that in 2014-15, 3.5 billion of low income benefits (pension credit and housing benefit) went unclaimed by older people. 7

NEA helped to secure a commitment from Government to extend the WHDS to 2022 with over 1.6 billion funds over five years to assist low income and vulnerable customers. This will allow the policy to continue to provide crucial assistance to many low income and vulnerable households a year to manage their energy costs. However, not all suppliers are part of the scheme and NEA has campaigned for all energy suppliers to be obligated to deliver the WHDS and thereby removing the barrier to enable older people eligible for the scheme to switch energy providers without missing out on the rebate. The Winter Fuel Payment The Winter Fuel Payment is a non means tested cash payment available to all UK pensionable age households. There is no requirement to spend the allowance on energy bills or energy efficiency measures and the payment is funded through general taxation. The payment is worth between 100-300 depending on age, benefit receipt and whether single or a couple. 8