Understanding Fuel Poverty

By Billy Holt - on 15/11/2021

On the 20th October HACT launched a fundraising campaign for the Energy Hardship Fund. With fuel poverty set to increase this winter with the rising energy prices and cuts to universal credit, it became clear that a collective effort was needed to help residents struggling to heat their homes. We recently reached the £200,000 mark, and conversations around the fund have highlighted the need to better understand patterns, causes, and ways to mitigate fuel poverty. This blog uses Community Insight to look into patterns of fuel poverty in the West Midlands.

Asked to describe a household in fuel poverty, many people would understandably picture older people struggling to keep warm over winter. Indeed, in Scotland older residents account for 36% of households affected by fuel poverty. 

Yet this is only part of the picture. The millions of people struggling with their energy costs include all types of households, young and old, in both urban and rural settings. The breakdown of households that accessed last year's Energy Redress Scheme can be seen in figure 1, showing that over half of recipients were 44 and under.

Using Community Insight we can look at the prevalence of fuel poverty in the West Midlands, one of England’s most rural counties. It is simply a matter of searching for the indicator you want to use in the data sidebar, in this case, Households in Fuel Poverty.

Community Insight allows you to view the data at varying scales. Figure 2 is at a Local Authority level, and its clear fuel poverty is affecting both rural and urban parts of the region, including largely rural Shropshire and Herefordshire and the urban centres around Birmingham, and Coventry.

 

In Herefordshire, the Severn Wye sustainability charity established Keep Herefordshire Warm, a dedicated energy efficiency hotline. Herefordshire is one of the most rural counties with many properties without access to mains gas. The hotline provides a range of support from reducing energy bills to accessing grants.

Community Insight allows us to change the way the data is mapped, highlighting only hotspot areas at an MSOA level (Middle Layer Super Output Area). Figure 3 focuses on Birmingham and shows areas where fuel poverty is a particular issue, including areas where it is above 30%. It's clear from this map that the north and east of the city region have particularly high rates of fuel poverty.

Orbit is one of the social housing providers in the region that has made tackling fuel poverty a target. Orbit and CIH published the Warm Homes, Better Lives report, highlighting that “strategies and funding solutions need to be strengthened to refocus delivery on the most needy homes and neighbourhoods.”

That is why research and data are needed to understand the complexities of fuel poverty, its causes, patterns, and strategies for mitigation. If we can get better at predicting where fuel poverty is likely to be an issue, there will be less likelihood that people suffer without support, in hard-to-heat homes.

One new approach is to use the increasing number of smart meters being installed in homes. UK Power Networks (UKPN) and Energy Systems Catapult are applying an AI system developed by Urban Tide to various insights and data smart meter data, geographic and socio-economic statistics.[1] The aim of the project is to better predict which households and areas may need support, recognising that not all people dealing with fuel poverty will be aware of or seek support.

Overlapping issues

Food Poverty

Energy hardship is not experienced on its own, it's likely to be one of a number of essential costs that a household must budget for. If a home becomes more expensive to heat due to rising energy prices, that cost might be displaced elsewhere and impact a resident's ability to pay for rent, food, or other everyday costs.

Figure 4 shows the food vulnerability indicator on Community Insight in the West Midlands, demonstrating that these issues are overlapping. Food vulnerability scores are a British Red Cross measure which combines other indicators to highlight where households are more likely to experience food insecurity (higher scores are more vulnerable).

Digital Exclusion

Online access and digital literacy help people to access the best energy prices for their households. Digital exclusion is another compounding factor of fuel poverty, making it harder for households to switch to better deals. It's an example of the poverty premium at work, by which those on lower incomes can end up spending more on everyday costs than those on higher incomes.

Figure 5 shows digital exclusion across the Midlands. Digital exclusion is an indicator that combines data on factors like broadband speed and internet usage with survey data on people’s familiarity using computers. Higher scores equal greater digital exclusion, and the West Midlands stands out as a region where the issue is prevalent.

What we can do?

HACT has been speaking with some of the big six energy providers' trust and foundations about the long-term problem of fuel poverty in social housing. The system can work better, whether it’s about improving billing processes, support and advice, or better rates for residents. It's key that various stakeholders can come together to unpick the complexities of fuel poverty, to build a better model for all. 

This is especially important as we transition to renewable energy and more dynamic energy supply and distribution. It’s a key example of how the green transition should present opportunities to build more just and equitable systems.

Find out more

This winter, the Energy Hardship Fund is one of a number of support services that can get essential assistance to households struggling to pay for, and heat their homes. In the long run, we can get better at understanding fuel poverty and its impact on households. 

If your organisation is interested in making a donation, you can find more information on our dedicated page, or via the following email address energy.hardship@hact.org.uk

You can also get in touch with Lara if you’d like to learn more about Community Insight, and how it can support your organisation to map and understand issues like fuel poverty that impact your residents and communities. lara.phelps@hact.org.uk

Tags: 
Fuel PovertyEnergy Hardship FundCustomer Insights

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