|Jenny Rathbone AC|
|Joyce Watson AC|
|Llyr Gruffydd AC|
|Mike Hedges AC|
|Neil Hamilton AC|
|Adam Scorer||National Energy Action (NEA)|
|National Energy Action (NEA)|
|Dr Steffan Evans||Sefydliad Bevan|
|Heléna Herklots||Comisiynydd Pobl Hyn Cymru|
|Older People's Commissioner for Wales|
|Lindsay Murray||Cymru Gynnes|
|Yr Athro Sally Holland||Comisiynydd Plant Cymru|
|Children’s Commissioner for Wales|
|Andrea Storer||Dirprwy Glerc|
|Marc Wyn Jones||Clerc|
|1. Cyflwyniadau, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. Tlodi Tanwydd - sesiwn dystiolaeth 1||2. Fuel Poverty - evidence session 1|
|3. Tlodi Tanwydd - sesiwn dystiolaeth 2||3. Fuel Poverty - evidence session 2|
|4. Papur(au) i’w nodi||4. Paper(s) to note|
|5. Cynnig o dan Reol Sefydlog 17.42(vi) i benderfynu gwahardd y cyhoedd o weddill y cyfarfod||5. Motion under Standing Order 17.42 (vi) to resolve to exclude the public for the remainder of the meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Dechreuodd y cyfarfod am 09:15.
The meeting began at 09:15.
Good morning. Bore da a blwyddyn newydd dda. Happy new year to colleagues. Can I welcome the Members to our first meeting of 2020, and can I ask if Members have any interests to declare? No.
Today is the first evidence session informing our inquiry into fuel poverty. The inquiry will look at, amongst other things, why the Welsh Government failed to meet its targets to eradicate fuel poverty by 2018 and what more can be done to address fuel poverty in Wales. We understand the Welsh Government's successor fuel poverty strategy is likely to be published for consultation early this year. Our aim is for our report on this inquiry to influence the development of the successor strategy. We hope we'll be in early rather than responding.
Can I welcome to the meeting Heléna Herklots CBE, the Older People's Commissioner for Wales; Professor Sally Holland, the Children's Commissioner for Wales; and Adam Smiley, political strategy manager for Scope? Croeso. Welcome. If you're happy, we'll move straight into questions. Yes?
Thank you. I think I'll just say that you're all very welcome and thank you for giving your time to come here this morning. I want to talk about the impacts and progress. What are the impacts of fuel poverty and how does it affect different demographics? What is the scale of fuel poverty across Wales, and how does it differ across demographic groups?
Shall I start?
First of all, thank you very much for the invitation and, also, can I just say how much I welcome this inquiry? Because fuel poverty has devastating consequences on people across all ages. Obviously, my interest particularly is with older people. So, I think there are three significant issues for older people and why fuel poverty affects them to the extent that it does. First of all, many older people, of course, are on fixed incomes. So, if they get into fuel poverty, it's extremely difficult to get out of it, and that means that year after year, winter after winter, thousands of older people in Wales are worried about how they're going to pay their bills, how to stay warm, and how to make decisions about where to save money, and whether that's about eating well enough or having the heat on.
We also know that in terms of the housing conditions, older people live in some of the worst housing in terms of energy efficiency and in terms of the physical fabric of housing, which can affect their health in many different ways. And the third thing that impacts on older people is that we know that many older people are still not online. So, 51 per cent of people over the age of 70 are not able and don't access the internet. So, it actually means that their energy costs can be higher because they can't access the online better deals that you can get from the energy companies. So, those three issues of income, cost, and housing conditions really impact on older people.
We know that there has been progress, and I absolutely welcome the work that has been done by Welsh Government, by agencies like Nest, Care and Repair and others, but what we know is that there is a persistent level of fuel poverty that is affecting the poorest older people. So, 29 per cent of those in fuel poverty are single older people who are living alone, and my concern is that that group of very vulnerable older people has maybe not reduced in terms of numbers in fuel poverty, and the progress has been in the higher income groups.
So, obviously, my concern is children, whilst recognising the particular impact on other groups, especially older people. Figures from StatsWales show that 23,200 children in Wales are estimated to be living in poverty [correction: fuel poverty] at the moment, and about 6,600 of those in severe fuel poverty. And, of course, the specific vulnerabilities of some of those groups of children, so the very youngest children, particularly those who have been born prematurely, disabled children, and, obviously, Adam will have more to say about that. And there's relatively small numbers of very vulnerable children who are living independently under the age of 18, especially children who have left care or who have been formerly homeless and rehoused.
I'm also concerned in terms of those numbers about what we would expect to see at the moment, if there's no change in the universal credit rules, of an escalation of that with the two-child limit on universal credit. So, we will see larger families, as they're born, as new children are born—it only applies to children born after 2016 [correction: 2017], as you'll be aware, Chair—that we will see larger families increasingly falling into poverty in general, including fuel poverty. So, those are the sorts of demographics that concern me.
In terms of how it affects children, well, children living in cold homes are twice as likely to have respiratory illnesses as children living in warmer homes, which is as you would expect. It also has health impacts on their general growth and development. In adolescence, it's linked to—we can't say it's causal, but it's linked to poor mental health, so one in four children living in colder homes are likely to have poor mental health compared to one in 20 of those who have always lived in warmer homes.
And it impacts on other aspects as well as health, like their education. If it's cold, you don't want to be sitting at a table doing your homework, that kind of thing. And there is a risk of homelessness, particularly for, again, those vulnerable young people living independently. In studies we've done with care leavers, for example, some of them are living on just under £8 a day for all of their needs and bills, and we've managed to get them exempted from council tax, but fuel bills are something that really come as quite a surprise to a 16-year-old living in a flat for the first time. Really struggling with that, they fall into debt and often get into cycles of homelessness.
This, of course, is a children's rights issue. It impacts on children's human rights to an adequate standard of living, their right to life, survival and development, their rights to health, their rights to education, to be able to relax, play and sleep—all these things. The Government, of course, in Wales has a legal duty to pay due regard to those rights, so they must, as part of their thinking about fuel poverty, as part of their legal duties, really think about those children's rights and how they might be being impacted on by fuel poverty.
Just a final point, we did a general study of child poverty earlier last year, and children showed an awareness within that—some children—of the impact of fuel poverty. It's something that parents often keep hidden from children, but some children talked to us about the pressures of high bills and how expensive it is to keep the house warm, and certainly, parents talked about that as a concern.
At Scope, we talk to disabled people every day, and so, we know this is a really big problem, and one that can be devastating to the families affected. I wanted to read a couple of lines from a short case study, which I think really illustrate the issue.
This is from a disabled person we've spoken to who's based in Wales:
'Before I became disabled, I never gave heating a second thought.... But now, as I'm at home every day, things are very different. My living standards have changed dramatically. I do face extra energy costs because of my condition. I find it hard to stay warm as I can't move around to generate any heat. I need the heating on pretty much constantly. I also use an electric heat pad to help manage my pain and an electric powerchair to go outside. This equipment requires charging frequently. My energy bills are much higher than before, and coupled with the loss of my income as a teacher, have made getting by very difficult.'
I think that really highlights the issues, which are that disabled people tend to have much lower financial resilience than non-disabled people, and many disabled people have no choice but to use much more energy than non-disabled people.
In terms of scale, we know that in Wales the poverty rate for disabled people is the highest anywhere in the UK. We don't have figures on fuel poverty for disabled people, because the Welsh Government's target looks at vulnerable households as a whole, rather than breaking those figures down into the different groups within vulnerable households, and that's something that we think should be addressed in the new fuel poverty strategy.
Thank you. We know the Welsh Government has failed to meet its fuel poverty targets up til now. What does it have to do differently in order to meet those? I cannot distinguish between housing and fuel poverty. I think that the quality of housing is the major cause of fuel poverty. I've visited some of my constituents living in the area I come from, Plasmarl, where people are living in houses in the privately rented sector where they're spending more to keep those cold than I pay to keep my three-bedroomed semi warm.
Maybe if I could start on that, I think housing is a factor, but income is a factor as well. So, we know that the poorest older people in Wales are those who are entitled to pension credit but are not claiming it, and the most recent figures show that up to £214 million-worth of pension credit went unclaimed by older people in Wales, so that means thousands and thousands of people are living on less than £167 a week. So, if you think about the cost of fuel, the cost of food, the cost of rent, trying to make do even if you get pension credit is very hard, but to know there are many thousands of people who are not even at that income level, and actually even if you are in very good housing that is energy efficient, you will struggle on those income levels—. So, I think it is a housing question, but it is also an income question.
I think the reason, therefore—one of the reasons—why the target has been missed and fuel poverty hasn't been eradicated is that you must look both at the issue of poverty and at housing, and I certainly think that there's more that the Welsh Government can do working with others to drive the take-up of financial entitlements. These are entitlements that older people are legally entitled to, and the fact they are not getting them means that many thousands of older people in Wales are living in poverty, are living lives that are a day-to-day struggle, and are also suffering the mental health consequences of worrying about money and worrying about debt and worrying about how they're going to manage.
One of the issues I think we need to look at now, given all the work that's been done and the work of Nest and others, is why is it that there is this persistent fuel poverty? And it seems to me we now need to look at different ways of tackling it. For older people, I think we need to look at whether there are different ways of communicating entitlements that can work better. So, we know that, amongst the very oldest age groups, there is still a reluctance sometimes to come forward and say they're in need. There's a sense of pride sometimes, a stoicism, and sometimes people feel that they're asking for a handout. So, the work that I've done over the last year or so has been about talking about entitlements, and saying, 'Actually, this is something that you're entitled to, in the same way you're entitled to use the NHS', and I wonder if now's the time for organisations like Nest and others to do some specific work to look at the messaging that is needed to reach older people so that older people do take up these opportunities. I think there's more that we need to do to grow awareness about people's entitlement to help, whether that's financial, housing or energy efficiency, and I'd certainly be very happy to work with others to look at that, to actually test some way of getting those communication messages across. Because I worry that older people just do not know what their entitlements are and where to go for help, and it doesn't matter how good the help is, if people aren't getting it or knowing about it, then it's not effective.
I agree with Heléna that it's income as well as housing quality, but housing quality certainly is an issue. We've got a real increase in families living in the private sector, and there's going to be variable quality in that sector in terms of the quality of the heating mechanisms as well as insulation et cetera. But also our housing in the public sector, as we know, in Wales—a lot of it needs upgrading. In a previous career as a social worker I would visit families in estates on the top of hills in the Valleys, for example, where the wind just absolutely whistles through for much of the winter, and a lot of it was put up quite quickly in the 1960s, 1970s and 1980s, so there's obviously lots to be done. I'm sure we'll come on to this, but it's got a real opportunity to make waves with our climate goals as well in Wales.
In terms of financial entitlements, whenever work is done to increase people's awareness of entitlements, it always leads to people's income increasing because people do not take up the benefits, at all ages. I agree it's a particular issue with older people. There are lots of innovative ways that people can do that. I think of Denbighshire, for example, where they've been running a really good recycling, reuse scheme for school blazers, where you leave a deposit and get an almost new, clean school blazer, and then you can swap it for a bigger size. But whilst families go there to get that, and that's very well used by lots of people, they also have Citizens Advice there, and others, who are giving income maximisation advice. So, it's making sure that we're using innovative ways to maximise income in Wales.
From our point of view, there are two main things. The first is the thing I mentioned earlier about the Government's target, because, obviously, targeting vulnerable households is broadly the right one, but if the Welsh Government looked more closely at the groups within that, including disabled people, we think that we'd have a better understanding of the kind of targeted support needed for those groups. So, that's the first thing: it's about the actual target. The second thing is about the kind of support that disabled people are receiving. You mentioned Nest, and it's obviously a good scheme, but it's a phone and online scheme, and what we know is that in-house services are often much more effective for disabled people. Heléna mentioned online digital exclusion for older people, and it's very similar for disabled people. Many fewer disabled people are online and are using the internet, for instance, to find better deals for their energy, and so we believe that an in-house service, similar to the one in Scotland, the Energycarer scheme, provides would be more effective in terms of offering the advice that disabled people need.
Okay, thank you. Can I just make a comment back at you? You talked about older people not taking up benefits; people over 90 will have family memory of the Poor Law, and that still haunts a lot of elderly people in terms of chasing after benefits. I think that's something that those of us who are younger, from generations post Poor Law, don't always realise—just how much that impacts on the very elderly. Llyr.
Thank you. Good morning. I just wanted to ask you a few questions on the definition of 'fuel poverty' and whether it truly describes people in fuel poverty and maybe ask what changes you might wish to make to that definition. I'm aware that Scotland and England have moved away from the Boardman-based definition, but we've retained it, really, haven't we?
Yes, I think it does need to be looked at. I think what they've done in Scotland, which is not just to look at the 10 per cent of income but then look at the residual income that's left, is actually something I would favour, because to take an example of someone who may be on pension credit, 10 per cent of a very low income of £167 a week, the residual income is not enough to live on. So, you might be at 9.5 per cent, but actually you're then in poverty. So, I think there is an argument, really, to look at the way in which that Scottish definition has been used, to see if that would be a more accurate definition. Also there's something about preventing people in the future falling into fuel poverty, and I think the definition at the moment doesn't really capture those at risk, and it is quite a cliff edge. So, I think there is an argument, really, for looking at not just the percentage, but what the residual income is and whether that is actually enough to live on. And if not, then actually I would suggest that person is in fuel poverty. So, I think looking at the Scottish example in particular would be helpful.
My recommendation would be that it should be looked at and we should be looking at the Scottish and English definitions to see how they're encompassing or excluding people from the definition, but to test those, then, with people's real lived experiences. So, it would be a fairly straightforward piece of research to do, actually, to find people who fall just outside or just inside different definitions and to find out their real lived experiences of the warmth of their house, their lighting and how they manage all their other bills as well and what impact it has on their everyday lives. And I think that's where we would be able to get a definition that, perhaps, mirrored people's real experiences better. There's always going to be the risk that people will fall just outside or people who are vulnerable will not necessarily be captured by that, but I think that's the best way that we could get a definition that reflects people's real experiences here in Wales, and, obviously, we would want to look at people living in lots of different types of households and different areas of Wales.
Sure. There is a definition of 'vulnerable household', isn't there, within fuel poverty, and I'm just thinking of 'at risk'? But maybe, Adam, you can tell us—the definition of 'vulnerable household' is—
It's a bit broad.
It is, to say the least, isn't it—over 60, young people, children, disabled people, life-limiting—? So, do we need to tighten that up? That needs to change as well, then, I presume, does it?
Yes, we think so. We know how many vulnerable households there are but we just don't know how many of those vulnerable households have a disabled person in it, or what the breakdown is. And that means, as we know that fuel poverty for vulnerable households has fallen, we just don't know what proportion of those households have the different groups within them. In order to make sure that those groups have the right support, we need to evaluate the full picture.
In terms of the 'fuel poverty' definition, it would be worth looking at it, but the most important point from our perspective is to make sure that the extra costs that disabled people face are taken into account, because in Wales disabled people face, on average, £506 a month in extra costs, which includes energy, but all the other things in their day-to-day lives that cost more. And so, whatever the definition is, it needs to take that into account. For the English definition, we've been calling for the threshold to be increased for disabled people to take into account the fact that disabled people have this extra cost. So, yes.
Can I just say something about the definition of 'vulnerability'? To me, it's not logical to make it 16 rather than 18 for the lower age range, when our definition of a child in Wales is 18. So, I would definitely want to pitch for that to be raised to 18. I know that could make it difficult for stats because household surveys are often for up to age 16, but I would certainly want to think of that. And when we particularly think of that vulnerable group of young people living independently aged 16 to 18, it's really important, especially if that definition is used to particularly support some households more than others, or to target some households for extra support. It's really vital that that group gets that support.
So, how accurate are the statistics that we have in Wales, basically, because there are so many questions to be asked about definitions and whether the right people are captured? Can we really take those as being a fair representation of the situation in Wales, and whether that allows the Welsh Government to monitor the situation effectively or not? It sounds to me as if many people are not being captured that should be, and others who might not necessarily need to be captured are.
I think it's more of an issue of what definition they're using. It's probably as accurate as they can make it for the definition they're using, but it's whether it's the correct one.
So, looking at the different definitions elsewhere, then, is the English or the Scottish—? Which would be preferable, or is there another one? Is there a Welsh way, as there seems to be sometimes for these things, or is there merit in having a consistent one across the piece?
Well, the difficult of having different definitions is that it's difficult to make comparisons and therefore—. If, say, Scotland was able to reduce their numbers by three quarters rather than half, as we've done in Wales, you might want to think how they've done that and it would be harder to do because we've got different definitions. On the other hand, there are pros and cons for all of these definitions. As I've already said, my favourite way would be to test the different definitions on people's real experiences.
Certainly, in England we know that two fifths of households living in fuel poverty include a disabled person, but the comparable statistics aren't available in Wales because of the current definition. So, that's something that will be looked at.
I think the other point is also the extent to which the definition relates to what heating you need as well. So, there's an issue about the temperature that is used, which, at the moment, is 21 degrees centigrade, and the World Health Organization has suggested it should be at 23. So, there's an issue also about the level of heating that you actually need, which is probably another part of the definition. So, it's not just the issue about the groups within it but, actually, what heating level do people need, and we know that people with certain long-term conditions or with particular disabilities do need a higher level of heating than people who are healthy need. So, that might be another area to look at as well.
I just wanted to throw in concerns I have about the time we might be spending on redefining who these vulnerable groups are. When, at another level—. Surely, they're all there in plain sight. I appreciate there is some hidden disability and some elderly people live in huge isolation, but all people under the age of 18 are in full-time education, or, if not, they're being tracked. So, do we really need to be spending all this time on redefining this instead of having a much more joined-up approach to tackling it?
For me, the point of—. I agree that we could just blanketly increase the vulnerable definition to age 18. For that aspect of the definition, that would be a very straightforward and clear response to our duty under the children's rights legislation.
I think one of the points of going back and asking about their lived experiences would be to find out what works and what they need. Because it's a huge investment, isn't it, insulating homes and all the other schemes that we have. So, it's important that they're right and that they support people in the way they need.
But, surely, that's about changing attitudes and the sense of responsibility of people who are delivering services.
That could be part of it, certainly, yes.
At its simplest level, I suppose, when you ask what the causes of fuel poverty are, it's just that people don't have enough money to purchase an adequate amount of heat in the course of a winter, and you've identified some of the causes of fuel poverty—the state of the housing stock, disability, et cetera, et cetera. But I'm wondering what other contributory factors there might be to this that the Welsh Government's not been able to take into account.
One thing that occurs to me, and I speak about it a lot, is the conflicts of policies. On the one hand it is official policy of governments at all level to drive up energy prices because of climate change concerns, but that of course has a disproportionate impact in Wales because we have a high proportion of the population that's in poverty generally, and fuel poverty in particular.
So, some of these things are outside the Welsh Government's control, of course. VAT on fuel, for example, which the Labour Government tried to remove when Gordon Brown was Chancellor in 1997—we will now, after 31 January, have the freedom to get rid of that 5 per cent. So, there are all sorts of things that the UK Government can do and the Welsh Government needs to push them to do. So, I wondered whether you have any other examples of things that we could recommend that would alleviate the problems of fuel poverty in this way.
Well, I think, coming back to the issue, particularly of people who can't access online energy deals—there is an issue there about whether there is discrimination against people who are not online. And, actually, that's a rights issue. So, if you cannot access the best deals because either you can't manage or can't afford to be online—. And, of course, the people who are in fuel poverty—chances are they're going to struggle to pay broadband costs and have the right kind of laptop or smartphone or whatever.
So, I think there is an issue there for energy companies about their tariffs, about their approach, and also about what happens when people switch energy companies as well. So, for example, are energy companies allowing people to get the Warm Homes discount immediately they become a new customer, or are they saying, 'Actually, if you're a new customer, you're not going to be able to access this until you've been a customer with us for 12 months', say? So, I think there is some work to do look at the specifics of what energy companies are doing. Are they playing their role in enabling people to get the discounts to which they're entitled, to supporting their own vulnerable customers, including supporting them in paying their bills if they get into difficulties? And I think there is an issue of discrimination against people, who will often be older or with disabilities, who cannot access the best energy deals online. So, I think, if Welsh Government could put some pressure on those companies, that would be enormously helpful, actually.
I think that's a very important point. I'm a pretty nifty deal seeker myself, although I'm 70 years old, and I'm very savvy about this kind of thing, but I don't do it all myself—I use a comparison website provider to do all the work for me. Perhaps we could do something along those lines for people who are not online. The energy companies know who their customers are; we know where most people are in poverty. Can we bring things together so that we can place a duty on the energy companies, for example, to be proactive, not just to sit there and wait for people to come to them, given that the way that deals are structured means that younger people are the ones who shop around, older people aren't? So, you're right when you say it's in effect, if not in intent, discriminatory, so we ought to remove that discrimination by measures that don't really outlaw it as such but where we get the energy companies to remove the discrimination within the system.
In terms of thinking about fuel costs, et cetera, I think in terms of the Government's competing demands of responding to the climate emergency and the social justice elements of supporting our poorest people in society, the only obvious way forward is to, really, target and support those households to increase their fuel efficiency so they need to use as little energy as possible to heat their homes. We're increasingly finding good ways to do that, although it comes at a cost.
In terms of competing policies, as you said, for me this has to be seen as part of the broader efforts of Government to tackle child poverty right across the piece. They're at the moment conducting a review of child poverty measures right across Government and all of their programmes, and this has got to be seen as part of that broader piece, and mitigating—. They can't impact on everything, as you rightly say—some of it is UK policies—but they do have a real role in mitigating for those who are most vulnerable, and that's where I might come back to things like the impact of the two-child policy in universal credit. There'll be an increasing need to mitigate there for families of over two children.
The point about digital exclusion is a really important one. As I said earlier, having a in-house, personalised service to advise disabled people would make a big difference. But something we've been calling for across the board for all companies, not just energy companies, is for websites to be more accessible, because many websites are designed in such a way that a lot of disabled people can't access them and feel completely locked out, and that's something that, certainly, the Welsh Government could urge companies to do more on.
One of the things that Communities First used to do before it was closed down. Joyce Watson wants to come in on this point.
In terms of joined-up thinking, if people are on housing benefit, or the housing benefit element that it is now, I know that people have an option either to have it paid directly to the landlord or to themselves, if I've understood it right, and it was the case that that would act as a flag in some local authorities—particularly in local authorities—to make sure that those people were accessing wider benefits. I know the system's changed—very much so—but have you got any examples of best practice that are still continuing to help people within the benefits system to know that there are other benefits available beyond that once they're on housing benefit—so, that's one thing—but also any help, once that is flagged up, to help them to access affordable schemes in their area?
I feel that's a really important point. We've seen variable practice on that across Wales. I don't know whether you're going to be speaking to the Welsh Local Government Association or others as part of this inquiry, but it's certainly something that you might wish to pick up with them. I don't know—. The only example I could give you, which is related to poverty, but not quite this topic, is that we know that some local authorities are automatically enrolling children for free school meals when we know that they're eligible because of other benefits. Also, they're able to automatically enrol them for school-uniform grants and others as well. I'm not clear why all local authorities aren't doing that, but I think that's a really important point. They could also be automatically putting them in touch with some of the schemes related to fuel poverty.
And if I can just—. To bring this point forward, most local authorities will still have at least one point of access to the internet, free at the point—so, some might have a library or some other building where people, if they wanted to keep their own control over the access, might be enabled to do that. I think, for me, it's about joining everything up. And I think that that's another possible way—rather than removing all the power from people, giving an option to have some of it back.
Yes. I absolutely agree with the principle of that approach. I think it's really important, isn't it, that we enable people, as far as possible, to keep control of their own finances and lives and make those decisions? This does touch on the other work that Welsh Government's been doing to drive up digital inclusion, and it hasn't met its target on that. And I think we've also seen, actually, that some of the places where older people would go for help on those things have actually closed. So, there does need to be more work, I think, done on how we help people get online and get online with support.
And, in fact, the recent problems with the replacement of the bus pass, concessionary bus pass, showed the risks of saying, 'This will just be done online', and actually it illustrated very well how many people are not online still in Wales. Or you might—. I think the other issue to bear in mind is you might be online technically but have quite a low level of confidence, and so you might be able to e-mail, but you might not be able to upload a document. So, I think the work to support people to be digitally included has to be ongoing as technology changes. We can't assume that we're suddenly going to get to a point where everyone can do it. And this could be an issue that gets worse for poorer people, for disabled people, for older people, if more and more public services or private companies are only dealing online. My worry is there will be a swathe of people who are getting left behind because they're not able to access public services, utilities, through online systems. So, I do think there is absolutely a join-up issue here, both about digital inclusion strategy and fuel poverty strategy.
Another factor of fuel poverty is the way that people pay for their energy—pre-payment meters, obviously, are more expensive than paying as you and I presumably do—and this is a feature of poverty generally. For example, the whole payday loan problem was that the less you would want to borrow, the more expensive it is to do it. So, there are several instances of this where poor people, in order simply to obtain the necessities of life, as we see the minimums today, have a more difficult and a more expensive time of it. So, have you got any reflections on that problem?
I think I would just agree with you completely, and it's exactly right, Chair, I think it is expensive being poor. You just don't have the flexibility, you don't have the resilience in terms of money there, and you don't often have the ways of making payments most efficiently.
I suppose the other thing is, if the fuel you're getting you need to pay in one go—so, if you're having to actually buy oil for your heating at home and you're buying that once or twice a year—actually that in itself is also difficult. So, different forms of heating, it's more difficult to spread the cost, and, if you can't spread the cost, it's much more difficult to manage if you're poor or on a very low income.
One of the interesting statistics that we've unearthed in the background briefing for today is that 46 per cent of those who are off mains gas in Wales are in fuel poverty. But, in England, it's a very much smaller percentage—only 26 per cent. So, is there something that we're not doing in Wales that they're doing in England that produces that disparity—and hence would reduce the problem that you just mentioned?
It could also be a difference in poverty levels in terms of the type of person who might be in that situation in England and in Wales. But I think it speaks to the wider point, absolutely, doesn't it, around you do need to look at the different ways in which people are able to heat their homes and the energy they've got and the specific issues there. And I think maybe that's an area to look at more: how do you help people who have got that sort of heating provision that, by definition, it's more difficult to spread the cost on?
So, in respect of the Government's declaration of a climate emergency, how should the new strategy for coping with fuel poverty reflect that?
It's a great opportunity for the Government to link these two important targets for the Government. Children and young people speak passionately to me regularly about their wish for the Government to respond in a very proactive way to the climate emergency, and, as one of the people who helps raise their voices, I just would like to echo that and say that this is such an important opportunity for the Government to respond to the climate emergency in a way that also helps its social justice goals, so we can really help people come out of fuel poverty, whilst also reducing energy usage in homes. It's a great opportunity for them to do that. We're increasing the technology and knowledge of how to do that all of the time.
I was looking at some new temporary housing in Cardiff just before Christmas for homeless families, where they expect to stay just for an average of four weeks at a time, which are solar panelled, and they were very warm. I was there on a very cold day just before Christmas. They expect them to have very low heating costs, but I was also being informed by the leader of that council that their next tranche of social housing, they hope, will be pretty well zero-energy use, which is good to hear, but it will cost more per unit. But that's got to be the way forward. To me, it seems like the obvious place for the Government to invest to tackle both of those issues.
As you probably know, I'm not a believer in the climate change emergency, but given that that is the policy, different fuels, of course, make different rates of contribution towards the emergency—if you accept that there is a causal link—so should we be designing a system that reflects that and prioritises some fuels over others?
I think the evidence suggests that we should be, yes. There is increasing scientific knowledge about how to do that most effectively and, more recently, we're looking at moving away from a reliance on gas boilers, as well, so any new programmes may have to move quickly to keep up with the latest advanced knowledge that we have on these issues.
I'm going to talk about our Warm Homes programme now, and ask you what you think about the effectiveness of the Nest and the Arbed schemes in helping with households' fuel poverty and whether you think the Welsh Government is investing enough funds in those schemes.
Well, we understand that the Nest scheme has helped disabled people to reduce their energy bills, but there are two things about it that we think could be improved. The first is that too many disabled people aren't eligible for it, because they don't receive means-tested benefits, and there are plenty of disabled people who don't receive means-tested benefits who still face huge challenges with the high cost of fuel. I think the criteria were changed recently to include some people with chronic respiratory and mental health conditions, but we believe they should be widened further, because there are more disabled people who ought to be eligible for Nest.
The second thing, which I mentioned earlier, is the fact that it's very much an online and phone service, and if you take the example of the Energycarer scheme in Scotland, in that scheme, it's an in-house service, and advisers will come to someone's home and give them advice that way, and it makes it much more likely to reach people and give them the support they need. So, those are the main things about the Warm Homes programme that we think need to be updated or improved on.
Yes, I'd agree with that, and maybe just expand a little bit on my earlier point about whether there is the level of awareness of the schemes. I'd like to see some work done on what is the public's awareness and, within that, different groups—older people, disabled people, younger people—of the Nest scheme, and how to get help with paying for energy. Because I think we just don't know what that level of awareness is.
I know that Nest do a lot of work with partner organisations and I think that's really important. I think there's more that could be done there. So I think we need to look much wider at the different referral routes into help—so, where are people going with health conditions that are exacerbated by cold, or mental health issues? It's possibly the GP surgery where they're at. Is there information there? It's exactly the point about join-up, actually. Are we looking at those issues that determine health and thinking about, actually, is the answer not a prescription in the usual sense, but actually some support for getting benefits, and getting help from Nest, or wherever. So there might even be something around the development of social prescribing in Wales that could also link into that issue about getting help with those things that are causing the ill-health. So, I think there is much, much more that we need to do to get that information out, that knowledge out, and that support—exactly as Adam was saying, actually—for helping you to get what you're entitled to.
In Northern Ireland, they've got a really interesting programme called Make the Call, which has been funded by the Government there, and it's one number that you can phone, and you can then get through to an adviser who will work through with you what you're entitled to and help you claim it, and the number has got really well known now. If there was one number that people just knew, if you make that call, you'll get that personal help, I think you would then want to be able to link it to some face-to-face help as well. But we can do so much more here to make sure people actually get what they're entitled to, whether that's help that Welsh Government is funding, or indeed whether that's support from the benefit system that the UK Government is funding. That money should be in people's hands, making their lives better, and I think we can redouble our efforts to do that, really.
Okay. So, we've got targets—every scheme's got a target. Do you think they're ambitious enough, and do they target enough of the households we're hoping will benefit from them?
Can I ask, is that specifically with the Nest—?
Yes, all to do with Warm Homes—everything. Whether it's Nest or Arbed or anything else for that matter.
I have to say I'm not clear what the targets are, which might be an issue in itself. I think, overall, the target should still be to eradicate fuel poverty. I'd like to see some very clear milestones on that so we can actually track what the progress is. I'd like to see specific work on those groups that have not yet been helped, and we've all talked about the particular groups that there are. So, more focus on those, who we know—and from my perspective, older people, who have been in persistent fuel poverty year after year after year, which is doing huge damage to their quality of life. So, I think targets can be very helpful, can't they, and sometimes, they can have perverse incentives as well. From my perspective, I think keep the ambition of eradicating fuel poverty and really look hard at the people who have not yet been captured by the work to date, and understand why that is and potentially introduce new ways of reaching them that do work across the system, whether that's through the health service or the social care service as well as through the third sector agencies, who do so much good work—Care and Repair, for example, are doing great work to reach people.
My understanding is that those living in the poorest households, the poorest 25 per cent, have been less likely to be brought out of fuel poverty than those in the top 75 per cent. So, looking at targets in a slightly more complex way and thinking about helping those in the most severe poverty might be something to be looked at.
I echo that as well. I agree with both comments. I think making sure that we've got the right targets in place and making sure that there are proper milestones and timescales in terms of when those targets should be met, but eradicating it is certainly the right approach generally.
We've talked about new technologies, and you mentioned in your response new technologies. Do you think that, in terms of the schemes—and, again, I'm talking about principally Arbed or Nest, or any other scheme—they're prioritising the right measure for installation, and is there a need for the scheme to include additional technologies and energy efficiency measures? And if you don't have the answer, we'll ask it somewhere else.
I don't have the technical knowledge for that myself.
Nor do I, I'm afraid.
Do you have any knowledge about the extent to which the private rented sector has benefited from the Warm Homes partnership?
I don't. I think the only thing to say there is that we know that some of the most vulnerable people are in the private rented sector. Certainly amongst older people, increasing numbers of older people are now in private rented housing, so there is a real issue there about how to make sure that people in all housing tenures are getting the help and support they need.
And my final question, because I'm going to ask it, with technology, is on smart meters. There's a drive for people to have as many smart meters as the Government can get because they're being paid to install them. Do you think, for the people you represent, that they're a good thing, that they're an advantage to the customer? Are you coming across any concerns where people who have smart meters are simply switching off the heating because they can see it buzzing around?
In terms of issues that come in to my casework team, we've not had anything, actually, on smart meters. In all the meetings I have with older people, it's not been an issue that's been raised. So, I think it's probably not top of the minds of people, and I don't know whether there's been any work done elsewhere across the UK, really, to look at what the impact has been or is. It's a really interesting point, isn't it, the way in which smart meters are intended to drive behaviour, but actually potentially, they could drive behaviour in a way that means that people are switching things off when they shouldn't. But I don't have any direct evidence.
Similarly, it's not been raised with me.
Nor me, I'm afraid.
I would argue, of course, it takes away fear because people are frightened how much they're spending, especially older people, who are terrified of having a bill, but they can actually see, if they've budgeted for a certain amount per day, that they haven't reached it yet.
Just an interesting line from last year's annual report from Nest. It says that, after the installation of home energy efficiency measures through Nest, the number of houses in fuel poverty dropped from 43.3 per cent to 21 per cent. So, even after Nest interventions, there were 21 per cent of houses that were still in fuel poverty, of those that had actually engaged with the Nest scheme. Does that tell us something about—
Of course, I suppose, as we've said all the way through, it's not just about the efficiency of the home and the warmth of the home; it is about income as well, isn't it?
Before I go on to the specific points raised from your written evidence, I'd just like to stick with Arbed for a moment, because you've said quite a lot about Nest, lots of interesting comments, but very little about Arbed, which is the targeted, area-based approach that is all-encompassing. If you're in that area, you're entitled to the services that they're offering. So, is it that you haven't had much contact with people who live in Arbed areas? Could you elaborate if you have any further information about Arbed, because, for example, Community Housing Cymru have raised some concerns about the very patchy approach?
Yes. We've had less to do, I think, with Arbed compared with Nest. So, again, it's not something on which we've had a lot of information through, so I don't think it would be fair for me to comment on that.
Similar. I think that housing associations, et cetera—housing organisations will have more to say.
Likewise, I'm afraid.
All right, but this is surprising me because this is a targeted area-based approach, and in relation to your comments about how we're not picking up vulnerable people, why haven't you focused on Arbed as a way of ensuring that, within an area that is bound to be an area of deprivation—we are not ensuring that everybody in that area is getting the service that they're entitled to.
That makes absolute sense to me, but I don't have evidence about it that I've gathered myself that I'm able to provide to you.
I'm interested because, yesterday, I happened to meet somebody who's living in an area that's designated as an Arbed area. She says that the only outreach that was done was to invite people to a meeting at a community centre, which instantly would exclude 25 per cent of that population because they wouldn't be able read this complicated letter. So, that, obviously, is something we'll pursue further. I wonder if you could just tell us your view on how effective the Welsh housing quality standard has been in improving energy efficiency in social housing.
Again, I don't have any information on that.
This is the obligation on local authorities to ensure that all homes meet certain standards, some of which touch on—. I mean, new windows would obviously improve the reduction of drafts and things like that.
I'm afraid we don't have any evidence on that.
Okay, that's fine. We've already touched, Sally, on your demand that any household with children up to the age of 18, or living independently, should have the opportunity to access targeted schemes. Isn't this the easiest group to target? If we had community-focused schools, they would instantly be able to identify any family with a child.
They are easy to identify.
For me, this would be a very simple extension.
Well, at the moment, the definition is only up to 16 for vulnerable households.
Okay, leaving aside that, let's just accept that definition—I'm just talking about houses with children are well known to schools, so local authorities could use schools as a way of ensuring that all families were getting the support they were entitled to. Why isn't that happening?
They certainly could and, as I said, I have seen a couple of examples of innovative schemes, but it's not national or universal. So, the Denbighshire one I mentioned. Some schools themselves are superb at bringing in credit unions and other advice, and having a real family focus and making sure that families are being supported in all of their needs, because schools see poverty in a way that the rest of the population don't see it. They see it coming through their door. They're trusted, and parents will talk to schools in a way they may not—share what can feel like very stigmatised poverty—with others.
Can I just come in on that? A friend of mine is a headteacher in one of the poorest parts of Swansea, and she's the only professional who the parents come into contact with who's not judgmental of them. Do you see that as one of the things that schools' headteachers, especially in primary school, could do more? Because they're not seen as part of that establishment that keeps on telling them they must do something.
Absolutely. They know the family in the round, don't they? They don't just make an instant judgment of them, not that any professional should do that, but that's how families perceive them. And they may have been to that school themselves as a child. So, there is a good opportunity there, I agree.
The Welsh Government has promised that it's going to have much more focus on the well-being agenda in schools because of concerns about children's emotional well-being, but this could also be used as a way of ensuring that the conditions in the home were adequate for the child's well-being at home as well.
I fully agree and, as I said at the very beginning, we know that fuel poverty actually has an impact on children's mental health, so it's got a clear link there. There is a current ministerial advisory group looking at what that whole-school approach to well-being should look like. So, it might be worth the committee making that connection with that group.
You do mention the First Minister's commitment in your evidence, and I just wondered if there's anything further you were able to say at the moment about how you think that work to re-engineer existing funding programmes will ensure that they have the maximum impact on the lives of children in poverty.
I had the opportunity to meet the Cabinet to discuss this a few weeks ago, and I did see, certainly, some commitment across all the ministerial portfolios to really bringing together what's happening and to look at the complicating factors of where do you put a limited pot of investment to have the best impact on reducing child poverty and mitigating the impacts of things like universal credit. But that work was just starting at that point. It's expected to report in March, and I'm keeping a very close eye on it. I expect the Government to really fulfil its legal duties here under a number of Measures that the Senedd has passed, but of course including the Rights of Children and Young Persons (Wales) Measure 2011.
I've provided for them my own framework, 'A Children's Rights Approach in Wales', which helps them to systematically think through how any programme, including this fuel poverty programme, would impact on children's rights. So, they have to, through this, think about groups that would be discriminated against, how to involve children and their families in developing policies and how to be accountable to children. So, I've been really encouraging all Government programmes to use these principles to systematically look at the potential impact on children's human rights as they develop and monitor the programmes that they have in place. So, for me, this sits within that broader review, and all of this work must sit within a children's rights framework, thinking about their human rights.
Of course, the principles within here, in terms of an all-age programme like this, fit very well with other citizens' rights, as well; the principles of involvement, of looking at groups that lose out more than others and accountability work well with all age groups.
Surely, it has to also address education on the appropriate time to have the television on, have the fire on in every room? There are ways in which we can manage our carbon footprint.
Our own youth parliament here has done its first inquiry into life skills in the curriculum, and they really are calling out for learning about very practical things like paying bills and managing households, et cetera, as part of their whole education. So, I think there's a real willingness amongst young people to wish to grasp these ideas, as well as, as I've already said, to have meaningful tackling of the climate emergency.
Has there been any discussion about enabling young people to support older people, for example, in digital exclusion? Because young people use digital devices without thinking about it.
Well, Heléna's and my office have been strong supporters and promoters of inter-generational projects. By setting special missions for schools to do this, we've supported lots of new groups to be set up. I can think of an example of a school in Aberystwyth, for example, where they have a weekly group where older people living in the community come in and meet the year 6, or I think the year 6 children go and meet them in a community centre. The old people teach the young people skills like knitting and board games and cards, and the young people teach them digital skills. So, there's lots of good potential for that and, like all best policies, it tackles lots of issues, including loneliness and isolation as well as, potentially, digital inclusion.
So, there are lots of ways in which we could tackle these problems without necessarily needing to throw extra money at them.
Some of these—
Yes, some of it's social; there's a lot of money needed, but some of it is about approach.
We've already discussed the failure to take up pension credit, and you've mentioned some ways in which that could be happening, but it's such a huge loss of income for the whole Welsh economy as well as for individuals' entitlements. Are there any further asks you have of organisations that are in daily contact, or at least regular contact, with older people? Starting with the benefits system. Why is this such a difficult thing to do?
Yes, it is. I think there are a number of reasons, and a number of things that we can do and we must do. If we were able to get most of that £200 million-plus to older people in Wales, it would make a massive difference to their quality of life, to issues of fuel poverty, but as you rightly say it would also benefit local economies, because that money would likely be spent locally, so it would have a multiplier effect in terms of economic benefit.
I mentioned the Make the Call approach that Northern Ireland have done. I think I would like to see Welsh Government look at that to see if that's something that could be done here. I know Welsh Government has set up a task and finish group to look at how to improve take-up of pension credits, so I welcome that and I would like to see that make not just some recommendations, but some funded approaches as well. I've taken action as older people's commissioner directly. So, working with Transport for Wales, we included a short leaflet from me in every letter that went to older people who were getting a new bus pass. So, they've had a leaflet from me—that's about half a million older people in Wales over the last few months—and we're looking with interest to see whether that has an impact on the data on take-up of pension credit in Wales.
So, I think we need to try different ways. I think we also need to think about where older people go for information and who they trust to give it. Sadly, we know they don't always trust official-looking Government information, so we do need to think of different ways of doing that. Then, we need to make sure that our advice sector is supported, and particularly that where older people go to for advice know how to provide that, and to do it in a way that respects people's independence and issues of control, and issues that you raised, Chair, about maybe a reluctance to come forward.
I think the other thing that Welsh Government can do is push stronger on the Department for Work and Pensions on this issue, because they have a responsibility to make the process of claiming easier, to get the information out, and I think it would be interesting to look at what the Treasury assumptions are on the take-up of these benefits, because they'll base their budgets on a certain take-up rate, and I would surmise that they probably don't have an incentive to drive improved take-up of benefits. So, I think there's something that we could call out there, actually. We're in touch directly with DWP, and as commissioner I want to really develop that relationship and work more with them to push and encourage and support them to do more to improve take-up, because it is partly their responsibility as well.
I think if we had a concerted effort across the agencies, across Government, including the work that I can do as a commissioner, I think that we can make progress on this. I think we can absolutely increase the take-up and make sure that much more of that £200 million comes into older people's pockets and into the Welsh economy. That will make a massive difference, so I think there's a real invest-to-save argument here, but we need to go at it quite boldly, I think, and ambitiously, and I'm not sure some of the incremental stuff's going to be enough. Once it's there, we need to make sure that we continue to provide that support.
The only thing I would add in terms of financial support is we also need to make sure that the current entitlements are not eroded. So, there is a risk in the future, if the Westminster Government made decisions, for example, on cold-weather payments that older people get, there is a real risk that things could get worse. So, we know that £200 that older people get is massively important. That comes straight to them. So, I think there is something also about making sure that the things that are in place stay in place as well.
It would be useful to get a copy of that letter that went out with the bus passes. Are you able to track any analysis of impact?
We've been struggling to get the data from DWP, because they haven't really been able to give us a breakdown yet. We're in touch with them. We will get data, but I think they're due to report in May, when we might be able to see what's happened, but we're trying to get data ahead of that. We do know that they've had contact, and I know because we've had calls into my office that older people have followed up. We don't yet know, obviously, what the percentage is and whether that will make an impact on the figures. So, I'm as interested as you are, actually, to see has this mechanism been effective.
Right. Okay. That's very good.
I think, just on the advice services that are available through local authorities, my own local authority, Cardiff, has got a series of hubs that are based generally in the areas of greater need. Have you anything to say about how well equipped they are to ensure that they're doing what the NHS does, which is to make every contact count?
I don't know the specifics of hubs. I think the basic point about having places in local communities where people naturally go and want to go, that can provide that advice and assistance, is really important. And, partly, we need to make sure that there is no stigma attached to that either, particularly, I think, for some of our older generations who don't want to feel they're going for a handout or something. So that's why I think advice on entitlements and benefits, if it's in places where all of us go—GP surgeries, libraries, maybe—I think that works well, because people then don't feel they're somehow having to say, 'I'm not coping', or 'I'm struggling', or 'I need help'.
Thank you. Adam, just picking up on your comments about the Scottish Government's Energycarer scheme, I just wondered if you've asked Nest whether they couldn't adapt their service to have some home visiting, as well as their online and telephone services.
It's not something we've done, but perhaps it's something we should do.
Thank you. I suppose that leads me to the last area of questioning, which is, really, how effectively energy efficiency schemes are delivered at a local level, given that by their very nature they have to be delivered locally, because we're talking about the place where people are living and therefore an assessment has to be done of the home to understand what needs to be done to improve the fuel poverty situation.
So, what's your assessment of the state of play, given the conversations we've already had about the roles that schools could play and, in some cases, are playing, and the role that many GP surgeries and their allied professionals are playing?
Well, I know that the Nest programme, for example, are doing a lot through their partnership managers to try and get into different settings. I think there's probably more that could be done there. I would come back to my earlier point, really, about awareness. I think, in a way, the fact that none of us commented particularly on Arbed shows that, actually, levels of awareness of this are quite low, of both schemes. So I think there is something there.
In terms of the detail of how effective that's been, I don't have evidence on that. I think my main point would be about awareness and making sure also that we are doing enough through the agencies that people know and go to, rather than making people work to find out where to go.
I don't have any detailed evidence on how effectively energy efficiency schemes have been delivered up until now. My work has been more on poverty in general, but I can make an offer—and you'll prompt me—to include information about that in the work we're doing with schools and local authorities at the moment on their role in anti-poverty measures. So, for example, I'll be doing a webinar with school governors from right across Wales soon, and that could be an important part to add to our general toolkit we've got on how schools can act as anti-poverty agencies, which is something that we're working very hard on at the moment, both at a school level and at a local authority level. So, I think, just being involved in this inquiry will prompt us to consider how we can include that information for governors and others.
Okay. In the context of the climate emergency that the vast majority of this committee are very concerned about, do you think that sufficient attention is being given to joining up the two issues, which is (a) reducing our carbon footprint and (b) ensuring that we have a fairer society where people aren't living in fuel poverty?
I think that obviously the original strategy almost incidentally will have an impact on the climate emergency, but it was devised at a time when we were less aware of it. The opportunity now to make those links is not only likely to happen, but is absolutely vital, isn't it? It must be done and it's such a good opportunity to—. What with that and our transport strategies they seem to me to be two of the biggest areas where a devolved Government can have an impact on the climate emergency.
Thank you very much. We've gone past the designated closing time, but I found it very illuminating and very helpful this morning, and I'm sure my colleagues have. Can I thank you all very much for coming along and giving your evidence? And I'm sure you'll see some of the comments you've made in the final report, but thank you all very much.
Can I now move that we go into private session for a break until 10:45? Thank you. I always wonder what would happen if someone said 'No'. [Laughter.]
Gohiriwyd y cyfarfod rhwng 10:32 a 10:45.
The meeting adjourned between 10:32 and 10:45.
Good morning. I'd like to welcome to the committee this morning Dr Steffan Evans, the policy and research officer from the Bevan Foundation; Lindsay Murray, project manager, Warm Wales; and Adam Scorer, chief executive of National Energy Action. I'm reading this off here because my eyesight is not good enough to be able to read your name plates, I'm afraid. [Laughter.] You'll also be very pleased to know I wear glasses when I drive. If you're happy, can we move straight to questions? Okay. If I can start, what are the impacts of fuel poverty and how do different demographics get affected by it, and what is the scale across Wales in different demographics?
I'm happy to go first. That's quite a lot in the first question. I always find that there are two key determinants of that: there's the people who find themselves in fuel poverty on a purely cost basis, and there's the people who suffer the consequences of fuel poverty. So, one way of answering that is 500 people excess winter deaths across Wales, heart attacks, stokes, respiratory conditions, inability to study for young children, loneliness, people not wanting to invite themselves into the home. So, Welsh Government has provided the figures that have declined by a half over the lifetime of the strategy. For me and for National Energy Action and NEA Cymru, the most important thing is to focus on the lived experience of those people who remain in fuel poverty, so that we have the necessary urgency and focus on eradicating it, not just counting the numbers.
Yes, I'd agree with that, and I think I'd say that the figures state that fuel poverty has dropped by about a half, but in practice—in our working practice we work directly with householders—it's not reflected in our figures. We don't understand how that figure has come about, to be honest. We dispute the accuracy of it, really, given the experience we have with householders.
And I think with demographics there are a lot of assumptions made on who to help, who not to help. Obviously, fuel poverty can be a lot higher in rural areas, but then funding is very much based on the monetary value for money per pound invested, pound back, so, we're not going to help the rural people because they cost more money to access and they cost more money to support. So, we're leaving those ostracised a lot of the time.
And I think with the area based, again, even within Cardiff, we worked recently with Cardiff council and we came in with a project that was going out to householders. We were advised to go to Caerau—'the arc of deprivation' it's called, that area of Cardiff—and then, when we looked into it, we used the data sets mapping system that we have called 'FRESH mapping'—foundation data for robust energy strategies for housing—and we put all the different data on top. When we looked at the age, the health, the fuel poverty figures, the energy efficiency figures for the households, actually, our data sent us to Llandaff North and to Llanishen, which, initially, Cardiff council said, 'No, they're all affluent; they don't need your support.' But we went out there and we found a lot of homes that did need our support, and we were very successful there. So, I think there are a few too many assumptions made.
We think there's an issue with the measure that's used around fuel poverty, and I think that skews a lot of the conversations around it. Obviously, the measure that's used in Wales at the moment is 10 per cent of income being spent on energy, but if a household has got £100,000 a year coming in and you're spending £11,000 a year on fuel, are you really in poverty off the back of that? There's a question around that, whereas in England and Scotland they've moved to a more residual income measure where what matters is how much money have you got after all of that. And I think that allows us to focus far more on poverty itself, which I think is the real problem; it's what you've been discussing through the lived experience there.
The information from Scotland does suggest that the measure we've got maybe slightly skews the picture about where the problems are. So, in Scotland, I think they found that the measure we use maybe overestimates the extent of fuel poverty in older households, in detached households, semi-detached households and maybe in rural areas, but underestimates the extent of fuel poverty in households where all the adults are under 65 but don't have children, in rental households, both social and private sector. There's a few things around there, and in urban areas well. And I think that the measure takes us away from focusing. I think the consequence of that, when we look at where the reduction in fuel poverty has come from, it's reduced by 75 per cent in the 70 per cent richest households, but only by a quarter in the 10 per cent poorest households.
Llyr wants to ask a number of questions on definitions and measurements, so I'll pass it on to you now, Llyr.
Shall I come in now? Okay. So, how would you change the definition of that?
I think we should be moving towards whatever definition they have in England or Scotland. They're both quite similar. In Scotland, they've obviously got the childcare element as well in the calculation. But I think that allows us to focus more specifically on poverty. We would argue, obviously as an organisation that focuses a lot around poverty, that those are the households that really need our help. If we're seeing the reductions in the wealthiest households, are we, in essence, just spending public money making expensive-to-heat houses cheaper to heat but not actually solving the poverty element of that question?
I think there are a couple of things about that. In England, for instance, there's a more sophisticated low-income, high-cost threshold, but nothing is done by the Government in England to deliver solutions. I think it's fine that the idea that we redefine the issue within Wales to take account, as they do in Scotland, of 60 per cent of median to make sure that people on low incomes are the focus rather than people on higher incomes with difficult-to-heat homes. The challenge I would put back to that is that definitional clarity and targeting is one thing, but if you proportionately reduce the numbers of people in scope that you define as being in fuel poverty, I'd want to see a proportionate acceleration of targets to deliver outcomes. So, if you redefine and then just allow yourself a comfort zone to deal with those numbers, that's the wrong approach. More aggressive strategies, more aggressive timelines if what you're doing is reducing the numbers in scope.
Within Warm Wales, we work in Wales and England, so I suppose we're in a little bit of a unique position in that some of our clients fall under different criteria. So, we have a lot of people in England who don't qualify for the—we do the fuel-poor network extension scheme, so giving fuel vouchers to get on to the gas network. And in England, people won't qualify for that because they're under the low-income, high-cost criteria, and we know that if they were going against the Welsh definition, they would qualify. But of course, you've got that argument that some of them may be those affluent, bigger households. So, for us, I think if we had a recommendation, it would be going more down the Scottish route.
Can I just briefly add one thing to that?
I'm all for a definition that's tighter and captures more of the people who need help, but there is a side issue—and actually, Lindsay may know some more about this—an easier definition for partners on the ground to grapple with means that your referral pathways into these schemes are simpler; it captures more people. So, there is a cost of going to a more sophisticated, more targeted one, because you make it more difficult for people to actually be captured by the schemes that are there to make people's lives better.
So, would you be recommending that we move to the English or the Scottish model, or would you want to see something a bit more specific and sophisticated for Wales? Because it isn't as simple, is it, as just saying, 'Let's do the Scottish model'?
I would personally—. I'm not going to answer your question directly. I think it's about what the strategy is, and the definitions are one aspect of it, but one of the reasons why we haven't made progress in Wales that we should have done, given that we've had years of investment, which is a good thing, given that we've got Nest and Arbed, which is a good thing and given that we have very aggressive targets, which is a good thing, is that there was insufficient structure and framework around the strategy. Definition is fine, targets are fine. Where are the interim milestones? Where is the data about performance?
In England, we haven’t got anything that's delivered from Government, but we have gap analysis about, 'Is the funding proportionate to the task at hand?' We haven’t got that sort of reporting and the opportunities to challenge the progress. So, the reason why I think the fuel poverty strategy in Wales, which has achieved a huge amount and has lots of really, really good elements to it, has failed because it's missed all its targets is because it has an insufficient framework around it, and addressing the definition by itself will not address the weaknesses around the actual strategy.
So, how much confidence can we have in the accuracy of the statistics that Government and others are bandying around here in Wales if there are so many health warnings around the definitions that are being used? You mentioned that you didn't recognise some figures that you've seen.
Well, the drop of 26 per cent to 13 per cent. Giving practice, we wouldn't say that we've seen a drop of 50 per cent in fuel poverty in the households that we work in. Yes, we have seen a drop, and yes, the schemes have had an impact. Like Adam says, there are great schemes here. Again, we see the difference between Wales and England—England don't have those schemes available for their fuel-poor householders, so, we are very lucky. However, we wouldn't agree—if you asked us to guesstimate how much fuel poverty has dropped, we certainly wouldn’t say that it was by 50 per cent.
But more broadly, then, in terms of can we really be confident that these figures accurately reflect people in fuel poverty coming out of fuel poverty then?
Well, there are two things. Maybe the fact that the reduction has been proportionately higher in the higher income households, that's important, I think. I guess there's another thing here that it's not just the steps that the Welsh Government have taken that maybe account for some of this, which makes it quite hard to measure. So, obviously, energy efficiency is important in fuel poverty, but so is low income, through work or social security, and so is the cost of energy. Much of the Welsh Government's focus has been on the energy efficiency front, naturally, because that's where they've got the greatest legislative competence to take steps, but at the same time, it's quite difficult, maybe, to draw a direct line, sometimes, from the actions that the Welsh Government have taken to the results we've got from the data. Maybe there is a question here about, 'Have we focused too much on the energy efficiency stuff? Do we need to broaden out our approach to consider the income and the cost element as well?'
I think there's an element of that that is absolutely right. I don't have any doubt about the reduction—I've got no basis to question that. If you had better iteration of year-by-year trajectory of what's caused it, what's worked, what hasn't worked and what we can put the change down to, not only would that give us greater confidence in the figures, but it would give everybody who's got a role to play in this across Wales the ability to know what works, what we should focus on, what we we can do more of, what we should do less of and what's absent. It's not, from NEA, whether we question the actual figure; it's how we've got there. Unless you know what's worked and what hasn't worked, the next iteration of the strategy is being done slightly blind, and that's a bad position to be in, given that there has been so much progress in Wales.
I think that's a really important point, because I think, in terms of the data we've had published, we had data—obviously, the 2018 data, then there was data in 2016 and there wasn't anything else, then, for a number of years before that, which, as you said, then makes it really hard to assess, 'Right, we've done this this year—has this had an impact?' Obviously, there's a feed-in period to that data, which will take time, but without that being published, as you said, it's quite hard to figure out what's worked, what needs to be tweaked and what we can invest more in because it does seem to be working well.
I think you're absolutely right to focus upon what most people would regard as a sensible definition of poverty, in terms of low income, rather than this kind of formulaic approach that has produced statistics that are, shall we say, surprising? The difference between the figures for 10 years ago and now are so vast, yet the policy change that has taken place in the meantime is so limited it's impossible to believe that either one or other of those figures—or maybe both—isn't, perhaps, a long way out.
So, if we do concentrate on what the main causes of fuel poverty are, clearly it is lack of income to purchase however many units of heat that you need, or which we think any civilised society in the twenty-first century should guarantee to people, regardless of their income. I was wondering to what extent the Welsh Government has overlooked various factors. You rightly say that they don't have all of the levers of power in their hands. Obviously, they're concentrating on insulating houses, which is a very good thing, because, in investment terms, it'll pay dividends over a very, very long period of time.
But, there are other factors where things are, maybe, not entirely within the Welsh Government's control but are within Government control more generally. I'm thinking in particular of the cost of energy. Since the Climate Change Act 2008, there's been a deliberate policy by Government at all levels relentlessly to drive up fuel prices in order to make people more economical in their use of fossil fuels, principally. Now, without getting into the arguments on climate change, the big losers out of this have been people at the bottom end of the income scale. So, what do we do to insulate the most vulnerable in society from the effects of other policies, which may be beneficial, if you believe in all of this kind of stuff? Nevertheless, where there is a conflict of policy, we have to construct them in such a way that they do not impact adversely upon the most vulnerable in society. What can we do to solve this problem or alleviate it?
I guess there are a number of things to unpack there. So, maybe, firstly around looking at the Welsh Government level, in terms of, maybe, there's scope here to look at, 'Should we consider devolving some powers over the winter fuel allowance?' or something like that. Is there scope for us to have that debate about whether it would be beneficial to have the power to do that? Obviously, we'd need to look at that, but there are all sorts of scopes to give the Welsh Government the power to tackle some of the other stuff. There's also clearly a need to work with the UK Government on some of this stuff—so, the actions on energy pricing and all of that sort of stuff. The Welsh Government's strategy on fuel poverty is only going to go so far if other factors beyond its control work to counteract that. So, there's obviously a need to maybe develop those networks a bit further to consider those actions.
I think the climate stuff is really important, but I think you are right to raise the point that taking steps to tackle the climate emergency doesn't always necessarily go hand-in-hand with tackling the poverty side of things. So, an example: in rural communities, if someone's got oil heating, that is clearly really bad for the environment and it would be beneficial to move that to electric, renewable or something like that, but that would drive up the cost of heating, therefore, would worsen the fuel poverty situation. So, there is a need to be aware of that, and I think that is something there, again, where there's a need to consider where our investment goes and what sort of technologies we're investing in. I don't have the expertise in a lot of that myself; maybe some of the other people on the panel might. And then to consider, 'Are there other policies that we could put in place to mitigate some of the cost interaction?' So, if we move people away from oil to more expensive forms of fuel, can we provide a sum to make up the difference so that, as we move to more energy-efficient and environmentally better ways of doing stuff, we are plugging some of those gaps?
Before you come on to that, can I just add to what you've just said? Ceredigion County Council has, in its evidence to us, pointed out that 46 per cent of people who are off mains gas are in fuel poverty. I mean, that's a staggering statistic and just goes to show the extent of fuel poverty in the countryside. Obviously, mid and west Wales, which Joyce and I represent, are overwhelmingly—in a geographical extent, anyway—rural areas, and these are areas where poverty is often hidden although it's in plain sight.
Yes. I would agree with a lot of what Steffan has said. With regard to the gas network, Warm Wales run the fuel-poor network extension scheme that I mentioned earlier. So, we handle the vouchers for those who are eligible to get on to the gas. There is the decarbonisation and fuel poverty conflict—that's always there.
Yes, I would agree: climate change, it is an issue and we do need to resource it. Currently, the cheapest way to get people who are off the gas network out of fuel poverty is to put them on to the gas network. So, currently, that is the solution for those people. We acknowledge that isn't a long-term solution and it isn't right in the decarb fight, but currently, that is the best solution for those people. So, we need to find a better solution, and as Steffan said, obviously that better solution is rather than putting them on to gas, putting them on to renewables, but they are higher cost, firstly from a funding point of view, there's a higher cost to put it in, and secondly, from a user point of view, it's likely to be more cost for the fuel use.
And also, there isn't an education behind that. There have been pockets of projects previously where renewables have been put in and should have been successful, and they haven't been, and often, it's because there hasn't been enough research into whether it's the correct property for that measure and/or the householders haven't really had an understanding of how they operate. So, they've had systems in and then they've been opening their windows, so it's costing them more to heat their homes. So, renewables are the answer, really, but they're an expensive answer, so we need more funding and we need an education behind it. We need an organisation to go in and do that education, networking and engagement with the households that we're targeting.
A couple of things: one, the Welsh Government doesn't possess all the levers to address all the causes of fuel poverty—that's true, and, actually, NEA told them that six or seven years ago and said they should reshape their strategy to reflect that, and I don't think they did. But a couple of things: income maximisation and making sure that people are in receipt of the means-tested benefits that are the passport to the existing schemes is something that's within the gift of Welsh Government, its schemes and local authorities. That's very important.
There are lots of things that Welsh Government could do to work with the network companies around fuel poverty, network extension and the retailers, which aren't about the unit cost of energy; they're about how Warm Homes discount industry initiative schemes happen, about how the energy company obligation is spent, about how vulnerable schemes to protect fuel-poor and vulnerable households can replace—. There's lots that they can do. So, I think the key for the next iteration of the strategy is to be clear about what levers you have, to be explicit about the way you're going to provide the leadership to maximise their development, and when it comes to the climate change issue, the net-zero issue, I would not want to see Arbed or Nest used as an innovation scheme to understand how you address the very real issue in Wales, which is that number of rural, off-gas, solid wall, fuel poverty homes.
There's a huge amount that Welsh Government, actually, in the schemes, has to offer the rest of the UK, about how schemes like Arbed have addressed those issues, and how you can achieve net zero, whatever your date—2050, 2040, 2030. Net zero requires the decarbonisation of heat in homes, probably the most difficult transition we're going to face. The transition for those in the sorts of homes in west Wales that you're talking about, Neil, is extreme, and they are going to be costly. For those people in fuel poverty, or close to fuel poverty, or even on medium incomes—building regulations, incentives, loans aren't going to do it. We're going to have to find a way in order to make sure that we don't just do the low-hanging fruit and leave the rest of the rump for later on—that we refocus the decarbonisation agenda and the fuel poverty agenda into one.
It is inconceivable to think about how we tackle the fuel poverty emergency over the next period without it going hand in hand with the decarbonisation emergency. But Lindsay's absolutely right—that's a long-term agenda. In the meantime, let's just make sure that people's lives are healthier, they're not suffering from mould and damp and cold, they don't have strokes and falls, and they don't die earlier because we've decided to stage our interventions to be entirely reflective of what we will be doing in 2050.
Why do you regard this as a long-term agenda given that all the learning we've got from the innovative housing programme demonstrates that there are renewable energy solutions to hand, with the expertise available here in Wales? I am astonished that we are thinking of installing gas in homes that don't have gas when we're going to have to rip it out in the future—all the gas-fired heating systems. Surely, we need to make a leap from those who are currently using things like LPG, which are absolutely not affordable—they're just far more expensive than anything else that's available. Surely, these are the homes that should be prioritised for the new renewable heating systems?
They should be prioritised, but can I suggest it's in a number of ways? Firstly, if you're talking about heat pumps, whether they're hybrids or battery storage or new forms of renewables, some of these homes are very poorly insulated, and tackling the fabric of the home first enables those other schemes to come in to operate so you get a proper—
Cardiff University's done quite a lot of work on this, and has done lots of different types of insulation of different types of homes, whether they're stone built or other.
There's a huge amount of learning, as I say, about the separation of the delivery of measures through Arbed, and the necessary learning that we need to do about putting in innovative heating systems, especially into off-gas rural homes, is absolutely important. As I said at the beginning, my concern is that 500 people die in Wales every year—excess winter deaths—of the cold, primarily the very old, and I'd like to see a strategy that brings those two things together. Because as I said, there's no way you can tackle the fuel poverty emergency without tackling the decarbonisation crisis. But to ensure that we're still taking measures immediately, this year, today, tomorrow, the next week, to make sure that we have sufficient felt benefits for those people whose experience of fuel poverty isn't just financial, isn't just transactional—it's about living in homes that are covered in mould and unhealthy and cause ill health and sometimes premature death.
Just following on from your last sentence, really, life is expensive for the poorest people in society, as our Chairman neatly encapsulated earlier on. One example of this is pre-payment meters, for example; it's more expensive for people to use them than to use the methods of payment that you and I would presumably use. So, what can be done at the micro level to deal with this kind of problem? Why should poor people have to pay more for their energy than people who are better off? What are the energy companies doing to correct this imbalance? What can Welsh Government do, whether it's by paying part of the cost of whatever transition there might need to be, in order to equalise the cost of energy purchase for people of lower incomes? Because it must surely be, in the twenty-first century, totally unacceptable for the poorest in society to bear the brunt of some of the unintended consequences of other policies? We ought, therefore, to design our policy network in such a way that, if there are going to be extra costs, they should be alleviated for those who need to be helped.
Yes, I can't disagree with any of that. I think that's absolutely central to some of the issues. The poverty premium doesn't just affect this element, but, food, for example: if you don't have a car you can't go to the big out-of-town supermarket, so your food is more expensive because you have to buy from the small one nearby.
In terms of steps, I guess a lot of the legislative powers around this are going to lie at Westminster, but there is stuff, as you mentioned earlier, about income maximisation. There's also stuff about looking at advice provision, and there is a need here maybe to work with the energy companies themselves as well to move forward with that.
From a pre-payment meter point of view—I apologise, I'm fairly new to the sector, so I'll give you a very naive answer—to me, it seems pretty simple. Currently, they're charging 30 per cent plus on top of what the normal payment is. Can we not put legislation in that just says they're not allowed to do that? It does not cost—. I appreciate there's the argument it costs more because the pre-payment meters have to be put in and they have to be visited, but it cannot cost 30 per cent more. So, surely, can we not just put in legislation for a unit cost?
Again, I agree with you, it's the education, because we go into lots of homes with pre-payment meters and we show them, 'If you switch from this pre-payment meter to this direct-debit payment we can save you'—and I'm not exaggerating—'£500, £600, £700, £800 a year', and these are people in absolute poverty, and they will not switch because they are petrified of direct debits, and we've sat with them and we've tried all ways. So, there really needs to be an education around it for the general public—what direct debits are and how it's an easier system. But there's a cultural fear of change.
Can I just say one thing? It might cost them money to put in the pre-payment meters, but they've got no worry of default and they've had the money upfront. So, actually, they're better off with having the pre-payment meters, even if they were charging the same amount they are with direct debit, where some people might default, and also they're being paid in arrears.
One of the issues behind that is the energy sector, which is currently going through quite a dramatic transformation in terms of data and digitisation, has not given PPMs traditionally a moment's thought, for precisely those reasons. There are a couple of things. We now in the energy retail market have price protection—a price cap—which is based on people's propensity to switch, not based on their vulnerability or their lack of income. I would like to see the greatest protection for the most vulnerable. Therefore, people who are eligible for the warm home discount should be given that level of protection, and in some cases taken out of the market entirely.
But there are things that the Welsh Government can do through influence. So, on pre-payment meters, you're exactly right on the reasons why people value them: control over cost. But there are things that Welsh Government could do around the installation of smart meters. Smart meters are not without their challenges at all, but one of the opportunities of a smart meter is smart pre-pay. So, you don't have that issue of going off the supply because you can't vend. And if the regulation and the requirements on energy companies around self-disconnection and the awareness of when people self-ration, limit, go off supply because they can't afford—.
If we are properly in a digitised, data-driven, personalised-account environment for people who have electric vehicles and stuff on their roofs and they're able to be prosumers and sell back into the grid, we're able to do the same to understand the behaviours of people who are most vulnerable, who are least able to afford their energy and are likely to go off supply at the wrong moment. You can tell if someone's electricity is still on but their gas has gone off. So, they're still in, but their gas has gone off in the middle of winter. There are interventions that you can make immediately—top-ups, reassurance—rather than waiting for two or three weeks, when the point of crisis is over, to address the debt issue.
So, there are things they can do even though they don't have levers, and that's what I want to see explicit in the next iteration of the Welsh Government's fuel poverty strategy. They don't have all the levers, but they do have the ability to lead across Wales with a whole range of different actors to maximise their ability to address fuel poverty.
Another issue is that there is fuel-price competition, obviously, but it is only available if you are online and know how to play the system, by and large. Quite a lot of people, particularly the elderly, living in fuel poverty are just not able to take advantage of whatever benefits there are of competition. So, that's something else, perhaps, that the Welsh Government could create a strategy on, in conjunction with the energy companies themselves, perhaps to get the energy companies to be more proactive in ensuring that everybody, or as many people as possible, could participate in a competitive system, or to provide some kind of compensatory mechanism that reflects the living conditions and abilities of a very substantial part of the population, particularly here in Wales.
It should not be a surprise that a competitive market rewards those consumers who are most engaged and most lucrative to the companies. There's nothing wrong with that; it's just the nature of the market system. So, we need to have the appropriate regulation, as I said before, and the greatest protection for the greatest vulnerable.
One point related to that that comes back to the decarbonisation agenda: we will need to see greater electrification of heating for certain households. Currently, the policy costs of electrification and decarbonisation are loaded onto the electricity bill disproportionately. So, if you're heating your home through electricity and we don't address that unfair distribution of costs, and you are if not in fuel poverty at least on a low income, the probability is that you're going to get hit even harder, not just for the unit cost of electricity but for the recovery of all the policy cost that we desperately need to drive decarbonisation at pace.
And that's another thing that the Welsh Government should be able to learn and to distill from Arbed and from these other schemes, and to make it a real issue to engage with Westminster, with Whitehall, with Ofgem, with the energy companies, about what we're going to do to make the recovery of policy costs less iniquitous than it currently is and is likely to become even more so.
We're moving on to Nest and Arbed now, so that was a good place to finish. I really would like your views on how effective they have been and whether you think that the Government—that's the Welsh Government, of course—is investing enough or sufficiently in them.
I wish I could answer, to be honest. I will always say, 'I wish they'd invest more'. For us, as an organisation that works in Northern Ireland, England, Wales and has a sister organisation in England, I'm very pleased that we have Nest and Arbed. It's done a tremendous amount of work. Lindsay may have more information from Warm Wales, which worked more closely on Nest. I wish I had a little bit more insight about how it works, how it doesn't work, how the assessment process happens in Nest, and about what Arbed has been able to do in co-creating in community retrofit. I think it's a bit difficult to know, to be honest.
I've got no doubt that a large proportion of the decline in fuel poverty numbers in Wales is due to the good work that Nest, Arbed and the partner organisations have done. But, especially with Arbed, I wish I was able to give you a better answer based on available data about the state of people's homes before the scheme and what has come out of the scheme. Were they in fuel poverty before? Are they out of fuel poverty now? What was done to them in order to make that progress? That would be a way of saying, 'Well, if we put a few more million pounds in that, we'd be able to see a proportionate increase in benefit.'
On Arbed, I can't give you much of an answer. We don't work directly with Arbed. We agree with the area-based approach. Obviously, there is the argument that, if you're doing area based, you're including affluent homes within that area, but I think if you try and break it down into criteria it just gets messy and it will never get done. I know there have been some issues with Arbed in procurement and getting contractors, and things are delayed. So, my opinion of Arbed from an outsider point of view would simply be: there are issues within the organisational structure, rather than the actual scheme itself. We agree the scheme is fit for purpose as it's sold.
On Nest, we work very closely with Nest. We work in households, we get people referred to Nest. Nest, as a whole, is an amazing scheme. And as you say, I believe as well it's had a massive impact on fuel poverty. We've seen the difference. I don't think it's an exaggeration to say it's saved lives within Wales. I think it's a brilliant scheme. I do have issues with the way it's dealt with. It should be a scheme that Mrs Jones can just pick up the phone and make the referral herself and access. However, the registration process, the referral process is quite complex. It took me six months of battling with Nest to find out exactly what the criteria is, to be honest. I would say that the website and the marketing material for Nest is not reflective of the practice of the criteria. Putting it very bluntly, I would say it is not a heating insulation scheme, it's a boiler replacement scheme. We haven't had one successful referral that is just for insulation. You mentioned the fabric first issue earlier. Yes, going into homes and putting in a brand-new boiler and brand-new heaters is brilliant, but if they've got no insulation you're putting in a brand-new system that's going to cost them loads of money to heat a draughty home. If you look on their website it will say they have a whole-house approach, that they look at it as a whole. We have had homes that have had the boiler and the insulation, so they do go in and they make that assessment. However, for me, insulation should be an 'or'—if I've got a boiler that's working, but I've got no insulation, Nest should be funding my insulation to make my home more viable.
With the criteria, we talked a lot earlier about the fuel poverty definition. That's irrelevant to the schemes. The schemes have their own criteria, and largely means-tested benefit is the way in. So, if you have a means-tested benefit, great; we can get you loads of stuff. Means-tested benefits are a great gateway, and I have no issue with that, because obviously people who are on a means-tested benefit are those people that we need to reach. However, we're missing a large tranche. We're missing those single people with no children who are working on a basic wage, in private rental, they have a landlord who isn't going to fix their boiler; we can't help them. Pensioners who've worked all their lives who just miss out on pension credit by £2, they don't have any money. They are the people we should be helping, and we go into their homes and we say, 'Well, if you don't qualify for pension credit, we can't help you.'
Nest has introduced a health criteria, which is very, very welcome, and has really helped us to help further people, because obviously it's a different criteria, so if you're not on a means-tested benefit, we look to the health benefit. However, that comes with a household income cap, which I agree with, but again, on their website it says 'household income minus housing costs'. It isn't minus housing costs, it's minus rent or mortgage. They don't incorporate the costs of housing. So, we had a client last week, and I'm battling with Nest to try and find a way in for him. He's over 75, he's got COPD, he's terminally ill, he lives with his wife. They both have pensions, but he has a private pension on top of it. So he qualifies for the health criteria, but when you look at their household income, the household income is £30,000, which I accept, on the face of it, looks sufficient to pay for your own boiler. However, he has a carer that costs him £20,000, and then they have the housing costs. When you do the maths, they end up with £254 a month to live on. They cannot afford to put a new boiler in. Their boiler is currently not working. They have electric heating that they are paying for that they cannot afford to pay for. The reality of that situation is: if we don't help them, he will either go to hospital, which will obviously incur much more cost, if we're looking at it economically, or he's going to die. I'm sorry, but that's the harsh reality. And we are struggling. We cannot find a way to help that household.
So my opinion is the criteria behind the schemes need to be looked at, and I think they should be looked at in partnership with partnership organisations like ours, who are on the ground floor and understand the people we are missing. Whether it's a case of looking at a household income cap, but a real household income, minus real costs, or whether it's that there's a separate pot that perhaps trusted partners could put their hands up and go, 'Look, this person doesn't meet the criteria on paper, but we need to help them', and there's a panel; I don't know. But by saying 'means-tested benefit' you're missing a lot of people who we really need to get to.
I'd agree with everything that you just said about the criteria element there, particularly given that the largest increase in poverty we're seeing at the moment is within working households. So, that is going to become a bigger problem as well. I think the point as well about the data is vitally important. That was something that the Wales Audit Office picked up in their report at the end of last year. I think particularly with Arbed, there are clear arguments for having a place-based scheme, but if you don't know if the houses you're helping out are actually in fuel poverty before you start helping them out, how can we evaluate if that scheme's actually doing what that scheme's there to do?
I think there are a few other issues as well in terms of the investment that's put into the scheme. So, if we think back, the Welsh Government target was to abolish fuel poverty. So, averaging out over 10 years, that would have meant 33,000 households a year needed to be moved out of fuel poverty. Given that Nest and Arbed were the vehicles through which Welsh Government were going to achieve that, you would have presumed that the investment in Nest and Arbed would come near that figure, but actually only about 6,000 households have been assisted through Nest and Arbed. So, the investment in the scheme didn't match, and that comes back into strategic planning as well, in terms of how we're going to achieve that strategy.
There are also the take-up issues as well. We know the Arbed budget's underspent, so there's clearly something going wrong there in terms of that message not getting out there, and around Nest as well. So, if we assume that the percentage in fuel poverty is about 12-13 per cent across the whole of Wales, there are some local authorities in Wales where about only 1 per cent of households query about Nest in any given year, which just seems way off in terms of how many households in those local authorities are living in fuel poverty. So, again, there does seem to be an issue here in terms of the communication of these policies with people on the ground, which is really important.
And one final thing in terms of potential issues is that we've heard some anecdotal evidence that there are some private sector landlords abusing the system, potentially, by moving low-income tenants deliberately into properties that they knew needed new boilers to allow them to qualify for the scheme. Obviously, I hasten to add that that's just anecdotal, but if that's going on, that might be something that needs to be explored as well.
Yes. I was looking at the annual report for Nest for last year, and there was quite a striking statistic in that report, showing that 57 per cent of households who received an energy efficiency package were not living in fuel poverty. So what does that tell us about the definition and the programmes again, I suppose?
But I'm not sure if their energy efficiency package might include just energy efficiency advice on the phone.
So it's the wording. When I read the report, I thought it was a lot more glowing than my experience.
So if you include anybody who's phoned up and you've gone, 'Close your doors, close your windows and turn your heating down', then it's very high.
But again, the vast majority are not living in fuel poverty, of those who engage, clearly, with the programme. So, what does that tell us?
And I think, in terms of what you said about the phones as well, that's something I've had experience of. So, as part of the project I'm working on, looking at the Welsh benefits system, we're looking at the welfare powers that the Welsh Government has within its grasp and Nest obviously falls within that. At the end of last summer, I was looking at the Nest website, at the eligibility criteria, and looking at the income cap, there was a number in Welsh, but it was just gibberish in English. It didn't make sense. So I called up Nest to ask, 'Which is it?', and the person on the phone said, 'I'm sorry, I can't answer that. You need to phone this company instead and they'll give you the answer.' So if I'm someone living on a low income who wants advice, I'd call the Nest number and expect that person to tell me, 'Yes, you're eligible', or 'You're not.' So there are those sorts of issues as well.
We have a lot of householders that we visit who say, 'I've tried Nest, I'm not eligible' and we say, 'Let's try', because they've tried to make that phone call, they've gone through the process and they've had a 'no'. But now that we understand it, we know what all the questions are and we understand—. For example, they'll say, 'Is your boiler working?' Nest will dispute this, because they will say that all the questions are weighted and the computer says 'yes' or 'no' as to whether you qualify, but in our experience, if you answer the question 'Is your boiler working?' with the answer 'yes', even if your boiler is 16 years old, you do not qualify. So, we've learned that we say, 'Yes, the boiler is working, but it's intermittent', which often it is, because there's a pressure issue or the boiler comes on and off, or whatever. If we say that, then they put it down as faulty and then we go through, whereas a householder would just go—. And they'll ask them whether they have loft insulation, and they'll say, 'I don't know', and Nest won't qualify that. If the answer is 'I don't know', what do they put in their computer? Do they assume it's there, or do they assume it's not there? They won't qualify that for us.
This is why I think it's so important—. I agree on the point about means-tested benefits, that you miss people at imminent risk of fuel poverty in conditions where their conditions might be worse than that. It reinforces to me—and this is a good thing, it's well-established in Wales through Government-funded schemes, but we come back to the first question, that definitional clarity is one thing, but allowing partners on the ground to feed in and use their judgment and be able to assess people's conditions is absolutely essential. Any system that's got criteria, targets and entry requirements is going to have cut-offs, is going to have scripts and is going to exclude. The more that you can work with organisations like Warm Wales to facilitate that, the better.
Again, one of the things that I would love to see in the consultation on the next iteration of the Welsh Government's fuel poverty strategy is just really realising the huge potential that exists to learn from issues where educators are referring because they know a child isn't doing homework and when they ask, 'Why aren't you doing your homework?' 'Because it's too cold at home' or 'It's too damp at home.' 'Why are you in the library doing your homework?' 'It's too cold, it's too damp at home.' Fragility nurses, pharmacists issuing inhalers for people with winter-suffering asthma, midwives, discharge nurses. The opportunity to identify people whose lived experience of fuel poverty is tremendous, but who may not cut the mustard when it comes to the actual financial definition is what we should be focusing on.
The Welsh Government's fuel poverty strategy should not be about fulfilling its requirement to a statistical definition; it should be about how you make people's lives better, healthier, safer in their homes in the context of the decarbonisation agenda. It does a huge amount. Most of our work is in England, where we don't do a huge amount. So, if you start from a great position, but I would just love to see it be much more explicit about how it uses all those levers, how it builds on that partnership basis, how it used Nest and Arbed to make people's lives better rather than fulfil its statutory target.
You talked about, briefly—. We don't need to go any further into Nest; we've explored the criteria for that. Maybe it would be worth, though, exploring just a little bit more about the area-based approach of Arbed, because we know from reports that there was a big underspend. So, what could we do to make that more successful, if anything?
I guess there is a need to work with organisations on the ground in those areas—those organisations that are dealing with people who are at very high risk of fuel poverty, because they're the people we want to help as well. I know it's an area-based approach, so as a default it's going to be higher middle-income people benefiting from it, and that's one of the reasons why we do that. But in terms of the people we really want to benefit, it is those lower income households who are at risk of fuel poverty. Obviously, there are pressures on all front-line services after what's been going on, but those are the people I suspect that are going to be best placed to deal with people and to give them that information.
Large-scale retrofit has to happen on an area basis; it is the right approach. The absence of it in different parts of the UK is tragic. You have low-hanging fruit. You have people doing one house there, one house there. It requires people presenting. It's a disaster. So, Arbed, the way the scheme is designed is absolutely right. There are some fabulous examples of external wall insulation schemes happening in local areas through Arbed that are the litmus test, the gold standard. They're what we should be promoting through the rest of the UK. There are issues about it being able to fill its budget. I don't know precisely what those internal issues are. Again, Welsh Government responsibility in working with local authorities in local areas is to hammer home that they need to have the skills base, the experience and the will to invite in and to help Arbed and local contractors deliver those schemes in areas of most need.
So, I wish we—. I'm sure this is an issue that you're going to face, about finding people who are able to give you chapter and verse on how well Arbed is working and what we need to do next. I would just say it's vitally important, and if you just looked at those places where area-based schemes don't exist, you see whole communities that have got no chance of getting the fabric of their buildings sorted out, and to live healthy and safe lives.
So, in terms of people knowing about the scheme and accessing the scheme, because that's part of everything, isn't it—if you don't know about it, you're not going to get it—or if you do know about it because someone's rang you up and said, 'Look, there's a great scheme here', have you got any evidence about people first of all refusing because they think it's a scam? Because we do our job quite well here by telling people, 'Watch for scams', so they think every phone call is a scam. So, have you got some evidence of that and suggestions for how we get round it if it is a problem? And have you got any evidence about the need perhaps to make people more aware of either one of these schemes, and what we might be able to do about that?
I guess one thing that might be a factor here as well is there have been some press reports about some issues with Arbed in certain parts of Wales; I don't know enough about that to comment on those issues. But obviously, if you're living in a part of Wales that is in an Arbed area and you're seeing something on the news that there have been problems with Arbed, that is obviously going to be a deterrent. So, there's a need maybe there as well to consider what's going wrong in those areas where there seem to be problems with it, so that we can take steps to improve it in that area, so that the news coverage becomes more positive about people benefiting from it, rather than maybe hearing about the negative stories and then that feeds into absolutely what you said about the fear of cons and all of that sort of stuff.
I think it happens already, but I think that partner involvement is just as important in Arbed as it is in Nest. The community-based strategy offer is difficult: quality issues, communication issues. But, unless it's some form of co-creation with the community, you're inviting suspicion or anxiety, especially if there are experiences with quality. So, what I would really love to see, going forward with Arbed, is this commitment that it's not doing it to communities, but doing it with communities, and understanding the other bits of advice—your point about ventilation earlier was absolutely key—about those other forms of behaviour and inhabiting a house that now has these different measures attached that enable you to take the benefit from it. So, I think that experience of, 'Don't do anything that's not in partnership, don't do anything that doesn't involve either the recipient of the service or the community in which that service is to be produced', isn't just some airy-fairy commitment to involving people, it's a necessary condition of those schemes being successful. And I don't know the extent to which that happens or doesn't happen in Arbed. I've got some anecdotal evidence of where it did and where it was the better for it, but I'd like to see it much more hard-wired into approach of the scheme.
Yes, I would agree pretty much with everything you've just said there. I think we experience—. Obviously, we go out and we knock on doors, so we always experience that fear of a scam. With Nest—who's going to give me a free boiler? Why? What am I going to have to pay? What's the end result? There is a massive fear out there, and rightly so, because you should be doing your jobs and you should be telling people that's out there, because equally we knock on doors where they tell us they've had a knock on the door from the council and we find out it's an energy provider, not the council, just getting them to switch, and that does happen. So, the route in—.
When we go to a new area, before we even knock on the door, it takes us a few months. We go into the council. We go into all the partners in the area. We make those relationships. We get out there, we do sessions with the public, with the community, and we explain who we are and what we're going to do. You can't just arrive and go, 'Look, we've got this lovely package and we're going to make your lives better', because people don't believe it. So, the best way in is through a trusted partner and I think—I'll reiterate it again, but the education behind the measures you're putting in is really important. So, the engagement—. An organisation like ourselves can go into a community. In a lot of Welsh communities we've already got that trust, it's already built there, so we can go in—and we've worked very closely with Welsh Water, similarly, previously—explain the measures, explain to them how they'll be put in, what will happen, how to use them, how to make best use of them.
So, in terms of what we're putting in—we've heard about boiler replacement—are we installing the right things, if you like, in terms of new technology going forward for people?
I don't know, to be honest. There are lots of good things happening about the hybrid heat pump trials that Wales and West have done. There's introduction of pumped hydrogen and biogas into the system. There's lots around battery storage and infrared heating and different systems. So, there's a lot going on out there.
In answer to the previous point, I would love to see the Welsh Government—. Now that we've had almost entire cross-party agreement for the manifestos for the last general election to investing huge amounts of public centrally funded money into the decarbonisation of fuel poverty agenda, I would love Welsh Government to make the most powerful case it possibly can to say, 'We have a particular need, given the type of housing stock, the position of the housing stock, it's dependence on certain types of fuel, to learn all the lessons we can and we're going to do it with the most vulnerable first'. So, I don't know.
I have my own position, which is I think that, over the next few years, I want to see people whose lives are being destroyed by living in cold, damp, miserable, unsafe homes dealt with. And some of that will be about the gas extension network, because that's the most available thing. But we need to make sure that the learning and the pilots and the trials and the opportunities that we take to understand how we entirely decarbonise heat across all those buildings happens in Wales, happens with those particular homes we've talked about—46 per cent in off-gas areas—and happen in the most vulnerable first, because my instinct, because why shouldn't it happen like it's always happened, is you do the lower hanging fruit, you go and innovate in new build and you don't address the issue of retrofit until right at the end.
Talking about rural areas—and we touched on it very briefly—it is right to say that the majority are off gas completely. So, how are we going to tackle that—because they are probably, in terms of numbers, the greatest number, they might be well-dispersed—to help those individuals who are in probably quite desperate need and in the worst housing?
Those would be the houses that are probably the best houses to look at the renewable option, because that's where it makes sense. That's my argument with, 'Yes, I think renewables are the answer', but my concern is that we go, 'Right, we're not doing any gas any more. That's not decarbonisation, so we have to go to renewables', and then we put renewables in everywhere but no-one knows how to use them, it's a waste. We need to do it in an educated manner.
I agree, with the rural properties, there's a lot of them that wouldn't be eligible to go on to gas anyway, because they're so far away from the network that it's not feasible, so I think they're the properties that we need to look at for this technology, but with the right engagement and the right education behind it. And perhaps it needs to be subsidised, because, at the end of the day, for the householder, it's the cost of their fuel post what you've put into their home. So, we know that at the moment, putting people on to gas, gas is the cheapest fuel. So, if you're putting in a ground-source heat pump or whatever you're putting into a property, likely that's going to be more expensive ongoing for the householder. So, whether we need to look at subsidies for those measures, I don't know. The ideal is, 'Yes, let's give everyone renewables and fight the climate crisis', but we've got to have the practicalities behind it.
I think that links back in as well to the technology question and what we were talking about earlier about there being more than one driver, because, using the Scottish measure, they suggest that that would probably slightly be overestimating fuel poverty in rural areas and underestimating it in urban areas, and that's partly because you can give someone a brand-new boiler, you can insulate their house, everything energy efficient wise is great, but, if they're on a low income, it doesn't matter, they still can't afford to heat that house. We have heard some anecdotal stories about people, even with a brand-new boiler put in, still choosing to put an electric heater on because they can control the cost of that electric heater and they find it more difficult to control the cost of the boiler. So, it does highlight that need to think about the holistic element of this as well, not just the energy efficiency side of it.
To be fair to Governments—and it's a habit I try and avoid—in Wales and across the UK, it's probably the most difficult energy policy question around decarbonisation we face, because it's thousands of millions of different homes, rather than big providers and transport infrastructure systems. I think there need to be vastly more pilots—area-based intensive pilots in vulnerable areas to test things out, but with that caveat that you need to protect those consumers from the cost of things going wrong or they're being more expensive. So, if you're going to pilot it, you need to learn in real circumstances how people deal with it and anticipate that their behaviour will not match the brochure or the ideal that you would want from it, and they need to be protected from the financial costs of running those systems. I think it's tremendously difficult, but I cannot conceive of any long term—and I don't know how long Welsh Government is intending its next fuel poverty strategy to run, but I cannot conceive of any short, medium or long term strategy that doesn't understand that the decarbonisation of every single home in Wales is necessarily bound up with its ambitions on fuel poverty.
And, finally from me, you did mention the bad story about the private rented sector, but are there good stories about the private rented sector benefiting from Warm Homes programmes?
Yes. The one thing we would say is there's been an awful lot of investment in RSL properties—rightly so—however, the private sector has been left behind with the investments, and there are a lot of people who are vulnerable living in the private rental sector. Nest is available to the private rental sector. Steffan mentioned earlier the possible abuse. Nest has a cap, that a landlord can only have a boiler put into three of their properties, to try and combat that. We've had a circumstance recently that I'm torn between, because we went into a home that was very fuel poor, they were in poverty, they are very vulnerable, and we applied for Nest and it turned out their landlord had previously had three properties already done, so technically he didn't qualify. However, there's a system that I've only recently been made aware of where you can make an appeal for that based on the situation of the individual, and this individual had a really bad health condition. So, we went through that and they did get the heating.
Personally, I struggle with this, because part of me says, 'If somebody owns four homes, they should be able to afford to put a boiler in the fourth home, and if they can't they should sell it and keep the three homes up to standard.' But then, working with that individual, if that were the case, that individual wouldn't have had that help. So, I really struggle with if we are reaching the right people that—. We do have situations that come up that we go—. And there's that scepticism; we hear a story and we go, 'Is that a landlord moving people around? Is that a landlord's sister? Is that for the gas connection?', we often think. And then we go, 'Are we just too sceptical?', because overall there are going to be those people who abuse the system, that's always going to happen, no matter what you put in. There are people who abuse the benefits system. There are people who abuse whatever system is there. Overall, our viewpoint is that the private rental sector doesn't have enough funding and we need more because there's a lot of vulnerable people within that circumstance.
A slightly divergent view: there are sticks and there are carrots. Sticks: in England and Wales there's the minimum energy efficiency standards. Landlords should be investing to bring their rental properties up to energy performance certificate E by April this year or they can't rent them out. Wales is in a great position, because it's got the register of landlords. I would love to see maybe an explicit target in the next fuel poverty strategy about enforcement on those regulations. Because I absolutely agree: most landlords are good, they're competent, they're just going to face the investment, but not all are.
Loads of work has been done in social housing, loads of work done—understandably easier to work with, more difficult for private rented sectors. Enforcement teams, trading standards or environmental health in local authorities have been cut to the bone. But it is absolutely essential that we follow that legislation, because we've talked a lot about that we can just legislate for stuff, but legislation and regulation requires effective and vigorous enforcement across the piece, otherwise it's pointless. I want to see what Welsh Government is going to do to help local authorities enforce the MEES standards so that people don't live in misery because their private landlords refuse to invest in their properties.
I would say build more council housing, in which case you would take a lot of the problems away. Jenny Rathbone.
So interesting, this conversation. How well do you think the use of the Welsh housing quality standard, particularly its requirements to improve energy efficiency in the social housing sector, has been effective in reducing fuel poverty?
I think the data from the quality standard is on too small—. I think it was done on 2,500 properties across Wales, which is really, really small, if you're looking—. I don't think that can be reflective—
But surely all landlords must maintain an audit of the quality of their individual properties, don't they?
I think there's a point—. The social housing sector is maybe the best illustration of the fact that there are multiple drivers of fuel poverty, because the Welsh housing quality standard clearly increased the quality of provision of the housing stock, but, if you look at the percentage of people living in poverty just across the board, the social hosing sector is about 45 per cent or 46 per cent, something like that, of people in social housing live in poverty. That's partly because social housing has become, I guess, a safety net. So, the days of council housing and social housing being available for all are gone, so it lends itself to that being the case. But that then feeds into the issue around that the Welsh housing quality standard has clearly improved the quality of the homes in that sector, but if people are on low incomes in those homes anyway they are still going to be vulnerable to fuel poverty. So, I think—I can't remember off the top of my head now, but 10 per cent, 20 per cent, of people in the social housing sector are still in fuel poverty. So, it's been really effective in driving up that energy efficiency side of it, but I think that might be the best illustration of the problem of just concentrating on the energy efficiency side of things as well.
But, clearly, it's an important element, because the social housing landlord is not in charge of the benefit system, they're in charge of ensuring that the homes they're renting to people are fit for purpose.
Yes, absolutely. I think the standards have done a lot of good, but obviously there's stuff beyond their control. I guess there's the other issue of social rents increasing as well, so that would have been another factor that feeds into that. They have been increasing above inflation for quite a period of time now. So, there are those factors combining there. But I think the quality standards themselves have been a step forward in terms of what's within the control of social landlords themselves to do.
Obviously, WHQS goes back to the third Assembly, before there was the focus on climate change and our obligations there. So, it's easy, with the benefit of hindsight, to say, 'Well, they could have been more rigorous in ensuring that we increase energy efficiency', but do you think that given the standards that were established back then—I think in 2009—it's been successful in achieving that? I agree that there's still—I think it's 9 per cent of all social housing tenants are still living in fuel poverty, which is a concern, but some of it's to do with the income they're receiving from the state or from lousy employers.
Yes, absolutely. And I think the key with the Welsh housing quality standard is, as you said, it was a product of its time and there have been attempts to update some of it, but it's about that constant—. It's an iterative process, isn't it, to look at what's worked, what hasn't worked. And, as we said, in terms of when we were discussing earlier about having with Nest and Arbed and Welsh Government strategy more broadly—if we have targets of what we want to achieve in a given year, we can see whether that's worked or not, and if it's worked, great, we'll invest more in it. If it hasn't, then, no, okay, let's think what else we can do. So, I think the Welsh housing quality standard is an example of something that's worked in a number of areas, but it's about going back and reviewing that on a regular basis to think, 'Right, what new technologies do we have? What new expectations do we have? What can we do to improve that further and to keep that process going?'
In terms of tackling the issues of private rental tenants that we've already discussed earlier, do you think that we should be applying the WHQS standard to them, or should we simply be ratcheting up the requirement on landlords in terms of the energy efficiency rating of the house they're renting? And how fast do you think we can go on that?
I guess there will be some improvements if and when the Renting Homes (Wales) Act 2016 actually comes into force. There is some stuff in there around the fitness for human habitation stuff that will hopefully strengthen some of the stuff about retaliatory evictions and all that sort of stuff. So, that will make it harder for landlords maybe to avoid some of the stuff. But I don't see why, if people are renting out their properties to someone else, they shouldn't be expected to comply with the highest standards. And, if WHQS has been doing well, why shouldn't the private sector as well be looking to moving towards that? There's obviously a cost with that, but, if people are renting out their properties, well, it's up to them to do it to the highest standards.
I don't know the specifics, but a general point would be that we have the legislation and these standards: make them work, enforce them, bring them up. But, in terms of the levers that are available to Welsh Government, in the context of achieving net zero—. Net zero means zero carbon from homes very, very quickly. What levers have you got that you can get yourself a platform from which you can have a strategy that has a chance of working? I think that's one that's available to it. You may have to iterate, change and get more ambitious, but you can't say, 'This works just for social housing, but owner-occupiers don't count or the private rented sector.' So, it may not be the same mechanism, but you're going to have to apply something like that if the ambition, which is now stated and accepted—and there's a bit of ambition inflation as well that's going on, a bit of an arms race about how quickly we can do things. It requires, very, very quickly, the decarbonisation of every single home in Wales. And energy efficiency is a critical part of that and standards—enforced standards.
Okay. I can see the levers we could apply to the private rented sector; I'm not entirely clear how we could apply those demands on privately owned property.
That's when the mixture of enforcement regulation, incentives that make a huge amount of sense, ease to engage with, simplicity and learning the lessons of green deal will come in. So, I think the instinct of Westminster Government will be, 'How many green incentives, how many green finance deals, how many easy investment decisions can we get people to make?' and spread the costs and take away some of the threat, either at point of sale, through the energy performance certificate rating or whatever it will be. So, you're absolutely right, there'll be a huge amount of incentives, and it probably will be the case that fuel-poor, low-income owner-occupiers will be the most difficult instances to address, because your levers to impose stuff on them are going to be much less. So, I think you're absolutely right: at the moment, there's a huge amount of reliance being placed on people acting in their own financial self-benefit as owner-occupiers, but we do know that lots of those are fuel-poor or close to fuel-poor, and no matter how many incentives or regulations you roll out, it's not going to be sufficient or enable them to enter into some investment decision.
Okay, but there was obviously a proposal that the National Assembly's not in control of, which is to oblige the energy suppliers to install the right solutions to people's energy problems, fund the capital costs themselves, and then gradually take it back out of the money that was being saved in terms of the amount of energy being consumed.
There are a number of schemes, ECO and other schemes, to bring that into place. I think what they will also have to think about going forward is—no-one's going to shed any tears for them—the fragility of the existing major energy supplier market, where them as deliverers of this sort of scale of energy-efficiency measures is becoming less reliable and less effective as their profits and their ability to sustain themselves as a business happens—. I don't think that's a long-term solution. I cannot see, I cannot conceive of, a solution, especially for fuel-poor low-income owner-occupiers, that isn't about a grant-based support mechanism, centrally funded, area targeted, with a big quality control over the supply chain.
That's why I say that Arbed is something that folk in poor communities in England would cut their arms off for.
Okay, so Arbed is a solution that looks at an area, regardless of the tenancy or owner-occupancy of the residents, and says, 'For this type of housing, we are proposing these solutions.' Certainly, that's the most cost effective in terms of the input of resources, because all the contractors are on site at the one time, but are we certain though that it has to be a grant-based system? Why couldn't it be a loan system?
I'm not certain at all. I think there are different mechanisms. I think we're going to try lots of things, and things will work and things will fail, and things will work for certain types of householders and they'll fail for others. This is the problem: this is the most significant cross-economy challenge that we face, and we're going to fail as many times as we succeed in getting there. But it's about how many levers, how many ways of engaging people educationally, but making this—. The costs associated with it, we know they're enormous; the systems benefits are necessary and even greater. How we construct and be the architects of the mechanisms is really important. And, going back to the subject of this—the most vulnerable first; they're the ones who get left behind, they bear the biggest costs.
I was interested in Lindsay and Adam's earlier comments that people need some insurance against installing renewable energy and then finding it's more expensive. How common is that? Because, normally, once the capital costs have been paid up front, the actual running costs are minimal.
Well, my point was about the pilots and trialling new technologies in certain circumstances, and if you're going to ask people to change the fabric of their homes and the way they're heated and they've got anxieties about it, you need to provide them with a base level of confidence that they're able to do it without incurring lots of costs.
Can I just come in on the point you raised earlier when Jenny Rathbone asked about giving them loans? If these are the people who will not go on direct debit because of the fear of cost, they're not going to take loans because of the fear of cost, are they?
No, I think that's right. The green deal showed—lots of faults in the way the green deal was put together, but it shows the limitations of market-based mechanisms that are about investment assets and investment decisions for people who that's the last thing they want to think about or are able to contemplate.
Yes, just finally, because we're running out of time, we've already talked to some extent about the importance of having a bottom-up approach, to use trusted partners when we're going into an area to improve things. Is there anything in particular you want to add to that as to how we absolutely radically need to change the way we're delivering this? Because, clearly, in the case of Arbed, I'm not convinced that they have understood either of those principles.
I'm going to shamelessly use it as an opportunity to say the one thing in relation to that that I think is most important, which is—we've talked about definitions and delivery mechanisms—timescales. I think the one thing we would need to change and would want to see changed in the next iteration of this fuel poverty strategy is something that is cognisant of the delivery vehicles that are available and the consequences of redefining it, probably with the consequence of reducing the numbers. I want to see a 2025 or 2030 target to give the possibility of leadership and to hold people's feet to the fire. When you miss targets one after the other it becomes habitual; it becomes easy to miss the next target. That's not an excuse for stretching those targets out into the nether distance; it's an argument for having those data, those interception points, so that we can hold their feet to the fire. So, my response would be to accelerate the timelines—don't stretch them out.
I think another point as well, particularly about Nest, is to look at those local authorities where the enquiry rate is much higher. So, there are some local authorities where the enquiry rate is about 10 per cent; there are others where it's about 1 per cent. So, what's going on in those local authorities? But it's actually about the percentage that are living in fuel poverty. Because they're obviously doing—. There's something going right in those areas that isn't being replicated in other parts of Wales.
I think it was in our written evidence. I think it was also in Nest's annual review. I think there was something in there as well.
I'll have a look at that, then. Because there may be reasons. Monmouth's may well be low because Monmouth is relatively affluent.
I think, actually, it was in Lindsay's paper as well. It was astonishing that—. No, it wasn't. Anyway, it was astonishing that in Merthyr Tydfil only 2 per cent—. Monmouthshire, I can understand. That doesn't mean to say that there aren't very poor people living in Monmouthshire, but, like your experience with Cardiff, with you being—
Yes, it's not what you expect, necessarily.
—directed to the arc, but then actually there are pockets in Llandaff North, which—.
Merthyr, Torfaen, Vale of Glamorgan, Wrexham are all on 2 per cent.
The Vale of Glamorgan includes Barry, where there is some hugely poor housing.
On your point, I think I'd agree with Adam and his timeline to create that urgency. I think there needs to be more joined-up working. Nest, Arbed and ECO3 are all very separate entities and they're all looking to achieve the same thing. So, I think there needs to be a lot more joined up. And then, with organisations, the funding—we're always fighting for funding and then that makes us competitors, so we're often competing with the organisations that are trying to help the same people that we're trying to help. So, we need a lot more joined-up working.
Okay. I agree on that. Thank you. I think we've covered it in the time available.
Okay. Thank you very much. We've gone slightly over time, but I think it's been very worth while. Thank you for coming in. It's certainly been informative and I'm sure you'll see some of your comments in the final report. So, thank you all very much for coming.
Can we note the following papers? The response to the committee's report on 'The Welsh Government's proposed Sustainable Farming Scheme: restoring biodiversity'; letter to the Minister for Environment, Energy and Rural Affairs following November's scrutiny session; follow-up letter to the Minister for Environment, Energy and Rural Affairs on environmental principles and governance post Brexit; an invitation to the chair of Natural Resources Wales to attend annual scrutiny; and correspondence between the Chair of the External Affairs and Additional Legislation Committee and Jeremy Miles AM, Counsel General and Brexit Minister—
On that letter, if I may, Chair, that committee does refer some items for our consideration, so I'm just wondering how we intend to pursue those. Because there are a few points there, aren't there? They note concerns about the impact of continued uncertainty, lack of Wales-specific legislation, development of future policy; there are issues around engaging with representatives of various sectors in the development of future policy. They say that they intend to draw those issues to our attention, as they have done in the letter, and hope that we, as a committee, will give them active consideration as part of our ongoing scrutiny. So, I'm just wondering at what point are we able to raise those, really.
I'll give you the answer everybody always gives: at the appropriate time. I think that we do need to plan it into our forward work programme.
I'm just wondering is it as simple as writing to Ministers to make some of these points. When is the next general scrutiny? Because that's a while away, I'd imagine, isn't it?
It is. We have two Ministers coming in next week for budget scrutiny and there may be an opportunity to raise some of these on the back of those discussions.
Okay. Because I don't want to go too far off piste in that session, clearly.
Well, we've got an opportunity to decide how we want to take it forward.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(vi).
Cynigiwyd y cynnig.
Can we, under item 5, move the motion under Standing Order 17.42, resolve to exclude the public from item 6?
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 12:05.
The public part of the meeting ended at 12:05.