This is the Sixth Annual Report on progress in implementing the UK Fuel Poverty Strategy, published in November 2001. It presents the statistics for the numbers in fuel poverty across the UK for 2006, and provides an update on government policies and programmes to tackle fuel poverty. It also highlights new developments since our last annual report, which was published in December 2007.

The Government has in place a range of programmes and measures to address the three main factors leading to fuel poverty. These are:

·                the energy efficiency of a home;

·                energy prices; and

·                the level of household income.

Energy efficiency and heating

Improving the energy efficiency of homes through better insulation and heating systems is key to reducing fuel bills and in turn helping to remove households from fuel poverty.

This report updates on a range of programmes to tackle poor energy efficiency, including the Government’s continued commitment to the Warm Front Scheme in England, with just over £800 million committed over the next spending round and a further £74 million recently announced for the next two years. Similar schemes exist within the Devolved Administrations, who are also committing considerable resources to improving energy efficiency and heating in households vulnerable to fuel poverty.

This is in addition to the energy efficiency measures installed in the homes of low income vulnerable households by the energy suppliers in order to meet the priority group target under the Carbon Emissions Reduction Target (CERT). Over the next three years low income and elderly households across Great Britain are set to benefit from around £1.5 billion of energy efficiency measures under this scheme. The new Home Energy Saving programme announced on 11 September, proposes to increase CERT by 20% - from 154 million tonnes of CO2 to 185 million tonnes. This uplift will drive a further £560 million energy supplier investment into GB households, some £300m of which will need to be delivered to households in a priority group of low income and over 70s households.

Mitigating the impact of energy price rises

Energy prices are also a key driver of fuel poverty. Increases in the number of households in fuel poverty have been due to increases in consumer energy prices. That is why the Government has worked with the six largest energy suppliers to reach individual agreements to increase their collective expenditure on social assistance to a level of at least £150 million by the financial year 2010-11 – an increase of £225 million over the next three years.

Increasing incomes

Low income is the third contributor to fuel poverty. A wide range of action has been
taken across Government to tackle poverty through improved incomes. Significant progress has been made in tackling pensioner poverty. Last winter around 12 million people aged 60 and over received Winter Fuel Payments. In his Budget 2008 speech, the Chancellor also announced additional one off payments for winter 2008/09 of £50 for households with someone aged 60-79 and £100 for households with someone aged 80 or over. The Government also recently announced an increase in the Cold Weather Payment for this winter, from £8.50 to £25 per week. This report also updates the continuing work to tackle the challenge of child poverty.

Raising awareness of help available to the fuel poor

A number of organisations, including the Department of Health and Ofgem, have made a concerted effort to ensure that those vulnerable to fuel poverty are made aware of the help available to reduce their energy bills from both Government and energy suppliers.
This includes a range of activity including The Fuel Poverty Energy Summit hosted by Ofgem and the Department of Health’s continued commitment to the Keep Warm,
Keep Well Campaign. The Government and energy companies have also launched a joint information campaign entitled ‘Save Money, Save Energy’ which includes a national TV and press information campaign to publicise the help available to households.

UK Fuel Poverty Statistics

Despite this significant spend on fuel poverty programmes and benefits, our 2006 figures show there were approximately 3.5 million households in fuel poverty across the UK,
an increase of 1 million households since 2005. Around 2.75 million of these were vulnerable households. This increase in fuel poverty reflects the impact of energy price rises on fuel poverty levels.

This report is accompanied by a series of internet-based annexes1 which include more in-depth statistics on the demographic, geographic and socioeconomic breakdowns of fuel poverty. Also published for the first time as part of the report is a detailed statistical annex which provides comprehensive analysis of the 2006 figures and projects forward the position for fuel poverty in 2007 and 2008.

The Government’s Fuel Poverty Advisory Group

This report also responds to the recommendations of the Fuel Poverty Advisory Group for England (FPAG), whose determined efforts and commitment are continuing to energise and take forward the fuel poverty agenda.