News

August 2011: A number of announcements have been made recently in relation to the increasing numbers of households suffering from fuel poverty. A summary of this information follows below, along with its relevancy to London.

The Government’s latest fuel poverty estimates for the UK (based on 2009 data) were published last month (DECC press release) and set out the significant increase in the number of households now classed as fuel poor as a result of increasing fuel prices. The Annual report on fuel poverty statistics 2011 stated that “In 2009, the number of fuel poor households in the UK was estimated at around 5.5 million, a rise of around 1 million when compared to 2008, and representing approximately 21 per cent of all UK households.”

Regional analysis of the data in the Annual report (in section 5.9) highlights that the percentage of households in London (under the Government’s definition) that are classed as fuel poor  has risen from around 4%  in 2004 to around 13% as at 2009 : this equates to around 430,000 households, based on London’s 3.3 million homes.

In response to the Government’s news release fuel poverty charity National Energy Action (NEA) produced a briefing with an estimate for London’s fuel poor based on this 2009 data as 417,000.

This is of course all based on 2009 data as mentioned before. Projections data on a sub-regional basis is not provided in the DECC reports however, in terms of understanding the potential current numbers of Londoners who may be classed as fuel poor, the following should be noted:

• The 2009 data estimates 5.5m UK households are in fuel poverty, of which 4m are in England. In terms of projections, the Annual Report (p75 and76)  states that “fuel poverty is projected to remain at around 4.0 million households in England in 2010 and rise slightly to 4.1m in 2011, as the 2011 price changes begin to impact on households.”
• The fact that figures for 2009 and 2010 remain static may seem odd at first, but when looking at gas and electricity price changes over the past few years (DECC’s Quarterly Energy Prices June 2011 provides the latest data – Chart 2.1.2.) it can be seen that the most significant prices increases were between 2007 and 2009, hence that period would have seen the most dramatic increase in fuel poor households. In contrast the Quarterly Energy Statistics report that “Annual average domestic electricity prices, including VAT, fell by 5.2 per cent in real terms between 2009 and 2010.  Domestic gas prices, including VAT, fell by 8.6 per cent in real terms during the same period.“
• However things have changed again. All six main energy suppliers increased tariffs earlier this year, and there are expectations of yet further price increases in the near future. Other contributing factors that need to be considered include the reduction in funding by Government  to programmes such as Warm Front and Decent Homes.
• As a consequence of these various pressures, the Chairman of the Government’s Fuel Poverty Advisory Group (FPAG) was interviewed on Channel 4 last week and said that DECC’s projections were significant underestimates and that “ in relation to 2011 “We’re looking at 6.6m households in the UK in fuel poverty by the end of this year…”. Of these, FPAG estimate that England will have 5.1m fuel poor compared to the 4.1m estimate in the Annual report.
• On a simplistic linear relationship between the regional estimates for 2009 data (using the NEA number for London), this could mean that there could be 500,400 fuel poor in London by the end of the year.
• All of these numbers are based on the Government’s definition of fuel poverty which is defined as the number of households needing to spend more than 10% of their income on fuel to maintain reasonable warmth . However, London has long made the case that because of the disproportionately high costs of housing in the capital, this 10% proportion should be applied on income  AFTER housing costs are taken into account (see GLA Fuel Poverty in London Report for further information). This, along with other factors considered in the GLA study, mean that under conventional estimates, the number of fuel poor households in London are currently grossly underestimated.

Additional information published alongside the Annual Report includes:
Fuel poverty 2009: detailed tables
Fuel poverty monitoring indicators 2011 – provides only scant detail in relation to any specific issues related to London.
Trends in fuel poverty England: 2003 to 2009 – London data in Table 37