Page last updated at 09:53 GMT, Friday, 24 July 2009 10:53 UK

Fuel scheme 'failing the poorest'

Mervyn Kohler, Age Concern and Help the Aged: "It is absolutely scandalous"

A scheme aimed at improving households' fuel efficiency and cutting fuel poverty is "failing the poorest and most vulnerable", MPs have said.

Nearly a fifth of the funding for the multi-million pound Warm Front scheme was going to households that were already energy efficient.

And £15m was spent on measures that did little to pull households out of fuel poverty, the committee of MPs said.

The government is aiming to end fuel poverty in England by 2016.

'Focus'

More than four million UK households are estimated to be in fuel poverty - defined as a household that spends more than 10% of its income on energy bills.

Kettle on a gas hob
Energy bills have come down in price this year

But the Public Accounts Committee report concludes that only a third of the genuinely fuel-poor qualified for help under the Warm Front scheme. This was partly because they needed to claim all benefits to be eligible for the Warm Front grant.

"It is unclear whether the primary aim of the scheme is to improve the energy efficiency of homes or to reduce fuel poverty," said committee chairman Edward Leigh.

"If the latter, then the scheme is certainly still missing the mark a lot of the time."

The report found that 635,000 households benefitted from the scheme between June 2005 and March 2008 at a cost of £852m. By 2010-11, the cost to the taxpayer was expected to rise to £1.8bn, the report said.

The scheme offers grants for updating the insulation of homes and to install more fuel-efficient appliances.

Cost concern

The report found that, in 2007-8, one in four applicants had to fund the difference between the Warm Front grant they received and the actual heating and insulation measures carried out. The average top-up was £581.

KEY FACTS
Maximum grant: £3,500 (or £6,000 for oil systems)
Numbers on scheme: 635,000 between June 2005 and March 2008
Cost of Warm Front: £853m over same period

More than 6,000 households withdrew from the scheme and 1,400 opted for less expensive work as a result. However, the report does say that the costs of the work were competitive.

In 2008-09, up to £2,700 was available for insulation, gas or electric central heating installation and other energy efficiency measures, or up to £4,000 if the property required oil rather than gas heating systems.

The maximum grant stayed the same from July 2005 to April 2009 despite labour costs rising by up to 9%. However, the maximum has since been raised to £3,500 for gas systems, or £6,000 for oil central heating systems.

The grants do not cover the cost of boxing in pipes and wires, or repairs of plasterwork, which leaves some homes with "unsightly work". Some householders did not realise this, the report said.

Saving

Energy and Climate Change minister David Kidney said the government was carrying out a review of the way the scheme worked.

"We are aware of the issues raised about Warm Front which is why we are reviewing the scheme and have already made some improvements," he said.

"The grant levels have been increased so the majority of applicants don't have to top up the funding to get work done.

"We are also trialling low carbon heating systems, too, like air source heat pumps, which could help more people living in rural areas."

He added that the average annual household fuel bill was reduced by £300 after work was done.

However, funding for the scheme will be reduced by 2011, stressed watchdog Consumer Focus.

"When it works Warm Front can make a big difference to those who receive its help, but it is still failing many who need its help the most," said the watchdog's energy expert Jonathan Stearn.

The winter season - that starts on 1 November - is 100 days away and consumers are being urged to seek advice now on how to make changes to the home to cut bills.

The industry runs the Home Heat Helpline that offers free advice to householders and their families.



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