ASSEMBLY BUSINESS

Letter from Department for Social Development dated 25.08.2011

Synopsis Text of a letter written to the Clerk of the Committee from Departmental Official, Eilish O'Neill on 22 September 2011.

Dear John

Thank you for your letter dated 28 June 2011 requesting an update on various aspects of the Department’s work on fuel poverty. The Department’s new Fuel Poverty Strategy “Warmer Healthier Homes” was launched in April 2011. The strategy sets out the Department’s vision for the future…”a society in which people live in a warm, comfortable home and need not worry about the effect of the cold on their health”.

The strategy places significant emphasis on the partnership approach required to tackle fuel poverty and the cross departmental nature of the whole area of poverty. At a time of economic recession, rising unemployment and cuts in welfare expenditure, more and more people are finding it difficult to meet their energy costs. The strategy takes forward energy brokering, calls for action on the price of oil imports, introduces a pilot boiler replacement scheme and develops a range of other initiatives.

For ease of reference I will address each of the issues raised in the order in which they appear in your letter.  

An update on progress against each of the 18 Action Points listed in Annex A of the Department’s new Fuel Poverty Strategy.

I have attached a table at Annex A which details all of the Action Points contained in the new strategy and a comment on our progress to date.

Further information on the Boiler Replacement Scheme, including clarification as to why it is not included in the Warm Homes Scheme; the business case for allocating a grant of £1,500 under the Scheme; and the support provided to those over 60 in accessing the Scheme.

The pilot Boiler Replacement Scheme commenced in June 2011. A budget of £2 million was allocated which we expect will assist over 1,300 households. The rationale for the pilot scheme was to offer assistance to householders on low income who miss out on other energy efficiency improvement schemes such as the Warm Homes Scheme. The intention of the pilot Boiler Replacement Scheme is to target owner occupiers aged 60 years or over who are in receipt of Rates Relief. The Department has publicised the criteria for the pilot Boiler Replacement Scheme as owner occupiers or private tenants who:

  • are aged 60 years or over;
  • receive Rates Relief; and
  • have an inefficient boiler which is at least 15 years old

Land and Property Services helped to identify householders in receipt of Rate Relief and a promotional leaflet was sent to all potential beneficiaries in week commencing 1 August 2011.

The Department has received some correspondence from MLAs questioning the rationale for excluding those in receipt of Housing Benefit. Householders who receive Housing Benefit can apply to the Warm Homes Scheme which targets properties where there is no central heating, solid fuel, Economy 7 or Liquid Petroleum Gas heating. The rationale was to offer assistance to vulnerable householders who do not qualify for assistance from other Government schemes such as the Warm Homes Scheme

The pilot Boiler Replacement Scheme is being delivered by the Housing Executive as they have the available resources and structures in place. This means there is no additional cost to the Department to deliver the Scheme. In choosing this delivery method, the Scheme allows the householder to choose their own installer to carry out the necessary works and this has been welcomed by representatives from the plumbing industry as work is being generated for small plumbing businesses.

The cost of replacing a ‘D’ rated or older boiler which is inefficient has been provided by technical staff in the Northern Ireland Housing Executive. They recommend that a payment of up to £1,500 be allocated to each home, as a contribution towards the cost of purchase and installation of a new ‘condensing’ oil or gas boiler. This payment will assist with the cost of the boiler and any necessary flue adaptations. The payment is not intended to cover the cost of replacement radiators or any other associated work. The amount of payment has been decided after consultation with technical experts in the Housing Executive, who have advised on average costs (see table overleaf).

COST OF PROPOSED BOILER SCRAPPAGE SCHEME

Estimated Cost of Minimum Scheme Requirements
  £
Assess age condition and efficiency of existing boiler; removal and disposal
45.00
Alterations to existing pipework
90.00
Low level flue installation
100.00
Boiler inc condensate trap
875.00
Replace pump
60.00
Electronic programmer including wiring
85.00
Flush system, refill inc inhibitor, bleed and balance radiators
55.00
General builder’s work; making good
65.00
Prime Cost
1,375.00
Overheads Insurances and Profit @ 20%
275.00
 
1,650.00
VAT @ 5%
82.50
TOTAL COST FOR MINIMUM SCHEME REQUIREMENTS
£1,732.50
PROPOSED SCRAPPAGE SCHEME ALLOWANCE
£1,500.00

The householder will be responsible for selecting a contractor, who is Gas-Safe registered, to conduct an inspection of the boiler, provide an estimate of the work required and proof of age of the boiler. Approval for the work to commence will be given by the Hosing executive, who will issue payment on proof of completion of the work. £1,500 will be the maximum amount payable and if the cost of boiler replacement is below that amount, the lesser amount will be paid. The Housing Executive will conduct a percentage inspection check on the installed boilers to check quality of works.

Details of any plans to review and audit the Warm Homes Scheme.

The Department committed to reviewing the Warm Homes Scheme after one full year of operation to ensure the scheme was fulfilling its objectives. This review will now form part of a wider review of the effectiveness of fuel poverty interventions including the pilot Boiler Replacement Scheme.

Further information on the organisational structure and remit of both the Fuel Poverty Advisory Group and the Inter Departmental Group – including details of when both these groups last met.

The Minister for Social Development chairs the Inter Departmental Group on Fuel Poverty. Senior officials from a number of government departments attend and there are clear links between the Fuel Poverty Strategy and other government strategies including the Northern Ireland Strategic Energy Framework, the Sustainable Energy Initiative and the new Child Poverty Strategy. The last meeting was held in January 2011 with the next meeting scheduled for May however with an election held in May this meeting did not go ahead. A meeting has now been scheduled for 27 October 2011.

The Fuel Poverty Advisory Group is chaired by Noel Williams, former Head of Energy Savings Trust. The group consists of members from the wider energy and voluntary sector. The last meeting was held in June 2011 and the next meeting has been scheduled for 7 September 2011. The remit of the Group is to advise the Department on progress with the fuel poverty strategy.

Details of any plans or initiatives DSD is taking forward with other Departments to address fuel poverty in Northern Ireland.

Boiler Replacement Scheme

The Warm Homes Scheme is the Department’s primary tool in tackling fuel poverty; however the Department also implements a number of other measures which can help to tackle fuel poverty. The Department has recently launched a pilot Boiler Replacement Scheme which offers a grant of £1,500 to approximately 1,300 householders who meet the eligibility criteria.

Winter Fuel Payment

The Department also administers the Winter Fuel Payment and undertakes an annual Benefits Uptake campaign to encourage vulnerable people to claim their full benefit entitlement. In July 2011, Minister McCausland launched the Innovation Fund. This is the first time that the Social Security Agency has incorporated an Innovation Fund in its benefit uptake programme. The aim of the fund is to work with partners to identify and test new benefit uptake approaches which will encourage customers to claim their full benefit entitlement. An initial budget of £250,000 is available for the 2011/2012 financial year.

Heating Replacement Scheme

The Northern Ireland Housing Executive administers an annual Heating Replacement Scheme which improves energy efficiency within the social housing sector.

Fuel Poverty Definition

The Department commissioned Professor Christine Liddell (University of Ulster) to review the definition of fuel poverty. This review is the first of three independent reviews of fuel poverty being carried out in different parts of the UK. Professor Liddell is a recognised fuel poverty expert in Northern Ireland and she intends to launch her findings on 6 September in the Stormont Hotel, Belfast. All committee members will be invited to the launch of the report.

Currently, a household is defined as being in fuel poverty if ‘in order to maintain an acceptable level of temperature throughout the home, the occupants would have to spend more than 10% of their income on all household fuel use’. To establish this precise percentage of income which would generate fuel poverty for households, the original author of the definition, Dr Brenda Boardman, took into consideration the median amount of money which families in England were spending on heating their home in 1991 – this was 5% at that time. She therefore set the fuel poverty threshold at anyone who would have to spend more than double that amount (10%) to maintain an acceptable temperature in their home.

At 2009 the median amount of money which Northern Ireland families were spending on heating their homes was 9% and national fuel poverty statistics (using the original 10% measurement approach) indicated that Northern Ireland had 44%, i.e. (302,000) households in fuel poverty. The fuel poverty definition review has concluded that applying a local twice-median (18%) rather than the national threshold (10%) indicates a core of 13% of households in fuel poverty, all of them in severe fuel poverty by national standards (since all of these households need to spend more than18% of t heir income on maintaining an adequate standard of heat and light). For this group, fuel poverty is likely to comprise a public health concern, since many of these people may be living in homes that are below minimum standards. In order to prioritise those most in need, it is proposed that these 13% of households become the primary focus of our Fuel Poverty Strategy in the medium term. This implicates more than 75,000 households, of whom 44% need to spend more than a quarter of their income on heat and light in order to maintain an adequate standard.

Green New Deal

The Department’s Permanent Secretary, Will Haire chairs a cross Departmental Group which is examining the potential of the Green New Deal proposal for Northern Ireland. The group is working with the Green New Deal consortium to help them formalise a business plan which can inform any economic appraisal developed by the Department on the best approach to allocating the £12 million the Executive identified in support of the concept.

The Department has been communicating with colleagues in the Department for Enterprise, Trade and Investment about Green Deal which is currently being established in Great Britain. Government is building a framework to enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no upfront cost, and recoup payments through a charge in instalments on their energy bill. Government will provide the legislation to enable energy companies and others to deliver the Green Deal. Consumers will see the Green Deal charge alongside the reductions in energy use which generates savings on their bill.

Details of steps the Department is taking to reduce the impact of the high cost and dependence on oil in Northern Ireland.

In our “Warmer Healthier Homes” fuel poverty strategy, the Department commits to working with partners to promote Oil Stamp Savings Scheme. We recognise that despite the fact that we have no influence over oil prices, we can try to encourage householders to budget for fuel and these local schemes are an excellent budgeting tool.

The strategy has also tasked the Inter Departmental Group with reporting on the affordability of fuel and what more can be done to protect vulnerable householders from fluctuating fuel prices.

In addition, The Department is working closely with the Housing Executive to bring forward an Energy Brokering scheme for social tenants. If successful, the scheme may assist in obtaining discounted energy for social housing tenants.

I hope the Committee finds this information helpful and I look forward to briefing the Committee on 22 September.

EILISH O’NEILL

Annex A

WARMER HEALTHIER HOMES – A NEW FUEL POVERTY STRATEGY FOR NORTHERN IRELAND IMPLEMENTATION PLAN

DATE: AUGUST 2011

  ACTION LEAD
TARGET DATE
CURRENT POSITION
Key Area 1:Targeting of Resources
To better target the resources available through the development and implementation of a robust mechanism for the measurement and analysis of fuel poverty within Northern Ireland.
     
1
We will effectively target available resources towards vulnerable households. DSD
31/03/12
Discharged via Warm Homes Scheme.
2
By 1 May 2011 an evaluation will be completed of the current definition of fuel poverty, including proposals that may ensure it remains appropriate and inclusive. This will include dissemination and consultation with key stakeholders on any revisions that seem indicated. DSD Christine Liddell Brenda Boardman.
30/06/11
Work has been completed. The report will be launched by Professor Liddell on 6 September in Stormont Hotel, Belfast.
3
We will begin discussions on implementing a fuel poverty severity index with our core stakeholders, with a view to providing an effective mechanism for the targeting of fuel poverty resources in Northern Ireland. DSD
30/06/11
As for 2 above.
Key Area 2:Improving Energy Efficiency
To improve the energy efficiency of vulnerable households.
 
4
To achieve an average energy efficiency gain of at least 15% in homes assisted by the Warm Homes Scheme. DSD, NIHE, Scheme Managers
31/03/11
Achieved. SAP increases averaged 25% in 10/11.
5
To deliver energy efficiency improvements to vulnerable households in the social rented sector each year through the Northern Ireland Housing Executive Heating Replacement Scheme. NIHE
31/03/12
This scheme is ongoing.
6
By spring 2011, to introduce a pilot Boiler Replacement Scheme in Northern Ireland targeted at householders aged over 70. DSD
31/07/11
Pilot Scheme commenced in June 2011
7
We will deliver more energy efficient housing through the standards set out in the Code for Sustainable Homes. This will include demonstrator projects that will see a number of new homes built to much higher minimum standards, up to 70% more energy efficient than ever before. DSD
31/03/12
Ongoing as new build programme rolls out.
8
By 31 March 2012, to investigate the economic, social, environmental and regulatory costs, benefits and risks of introducing an Equity Release Scheme for energy efficiency improvements in Northern Ireland by conducting an appropriate feasibility study. DSD
31/03/12
Work ongoing.
9
By 31 March 2012, in conjunction with other departments and agencies, to investigate the economic, social, environmental and regulatory costs, benefits and risks of developing and implementing an Energy Performance Certificate Database in Northern Ireland by conducting an appropriate feasibility study. DSD/DFP/DETI
31/03/12
Work ongoing
10
To pilot, in conjunction with other departments and agencies, the introduction of smart meters within vulnerable households, and to evaluate the pilot by 30 September 2012. DSD/DETI
30/09/11
Ongoing with UUJ in the lead.
11
By May 2011, to introduce legislation that will enable local authorities to produce domestic energy efficiency improvement action plans, and the Home Energy Conservation Authority to facilitate and co-ordinate such local initiatives.  DSD/NIHE
31/05/11
Legislation is now in place.
Key Area 3: Achieving Affordable Energy
To facilitate the achievement of affordable energy for households in Northern Ireland. 
 
12
We will continue to deliver a Benefit Uptake campaign and consider by 30 September 2011 the outcomes from the current research in Great Britain. SSA
30/09/11
Benefit Uptake campagin is ongoing.
13
By 30 September 2011 we will work with partners to promote existing Oil Stamp Saving Schemes across all council areas. DSD
30/09/11
Work ongoing
14
By 30 September 2011, to complete an evaluation of the current trials of domestic renewable and sustainable energy technologies implemented through the Fuel Poverty Partnership Fund and the Northern Ireland Housing Executive to determine if they provide proven cost effective affordable energy solutions that could be rapidly deployed in Northern Ireland. DSD/NIHE
30/09/11
Work ongoing
15
By 30 September 2011 the Interdepartmental Group on Fuel Poverty will report on the affordability of fuel and what more can be done to protect vulnerable householders from fluctuating fuel prices. DSD
30/9/2011
Work ongoing
Key Area 4: Building Partnerships
To develop and consolidate effective partnership working across organisational and professional boundaries to provide more effective and integrated team working to eradicate fuel poverty.
 
16
To develop and consolidate effective working arrangements across the statutory, voluntary and private sectors to make best use of existing capacity, and to secure increased commitment of all partners to joint working through new and existing partnership mechanisms. DSD
31/03/12
Work ongoing
17
By 31 March 2012, to introduce an energy brokerage scheme that will enable social housing providers to broker energy costs for their tenants at a competitive rate. NIHE
31/03/12
Work ongoing
18
By 31 March 2011 to investigate the economic, social, environmental and regulatory costs, benefits and risks of introducing an area based approach to tackling energy efficiency improvements by evaluating the Kirklees model. DSD
31/03/11
Work is completed.

Find Your MLA

Locate your local MLA

Find MLA

News and Media Centre

Read press releases, watch live and archived video.

Find out more

Follow the Assembly

Keep up to date with what's happening at the Assembly.

Find out more

Subscribe

Enter your email address to keep up to date

Sign up