Warm Homes: Tackling fuel poverty - Northern Ireland Audit

REPORT BY THE COMPTROLLER AND AUDITOR GENERALNIA 178/07-08 23 June 2008

Warm Homes:Tackling fuel poverty

Report by the Comptroller and Auditor General for Northern Ireland

Ordered by the Northern Ireland Assembly to be printed and publishedunder the authority of the Assembly, in accordance with its resolution of27 November 2007

Warm Homes:Tackling fuel poverty

NIA 178/07-08 BELFAST: The Stationery Office £5.00

This report has been prepared under Article 8 of the Audit (Northern Ireland) Order 1987 forpresentation to the Northern Ireland Assembly in accordance with Article 11 of that Order.

J M Dowdall CB Northern Ireland Audit OfficeComptroller and Auditor General 23 June 2008

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© Northern Ireland Audit Office 2008

Warm Homes: Tackling fuel poverty

Benefits Health Check

Eaga plc provides advice on benefit entitlementsto householders who qualify for the Warm HomesScheme.

Energy Efficiency Levy

The Energy Efficiency Levy programme wasintroduced in 1997-98. The Levy is collected byNorthern Ireland Electricity Energy Ltd from itscustomers and the funds generated are used todeliver energy savings. The size of the Levy hasincreased gradually over the years to a level of£7 per customer per year in 2007-08. Increasesover the next two years are to be in line withinflation. The majority of the Levy funding (80 percent) is targeted at helping to alleviate fuel povertyby improving poorly heated and inadequatelyinsulated properties. The remainder of the Levyincome is available for projects involving non-priority customers.

Fuel Poverty

The Department considers a household is in fuelpoverty if, in order to maintain an acceptable levelof temperature throughout the home (210C in theliving room and 180C in other occupied rooms),the occupants would have to spend more than 10per cent of their income on all household fuel use.

Northern Ireland House Condition Survey(NIHCS)

The House Condition Survey is based on thesurvey of a sample of dwellings across NorthernIreland. It provides an assessment of unfitness;

disrepair; ‘decent homes’; fuel poverty and energyefficiency (including the SAP ratings) at theNorthern Ireland level, at sub-regional levels andfor key sub-sectors of the market. Nine surveyshave been carried out in the last 30 years and theresults of the latest survey, in 2006, are due to bepublished in September 2008.

The figures for fuel poverty contained in NIHCSreports are derived from the survey findings by theBuilding Research Establishment in Watford usingits fuel poverty model.

SAP Rating

The Government’s Standard Assessment Procedure(SAP) for energy rating of dwellings is measuredon a scale from 1 (least efficient) to 100 (mostefficient). The rating is based on annual energycosts for space and water heating of a dwelling.In England, the Department for Environment, Foodand Rural Affairs introduced a target rating of 65SAP for the energy efficiency of any householdtreated by the Warm Front Scheme.

Vulnerable Households

Eligibility for the Warm Homes Scheme is limitedto vulnerable households, defined as those onspecific benefits and have a disability or are over60 years old or have children (Figure 2).

Glossary

Contents


Page

Executive Summary 2

Part One: Warm Homes and fuel poverty 7

Warm Homes 8

Fuel poverty 11

What we did 11

Part Two: Performance management of Warm Homes 13

Strategic targets and milestones exist but the impact of Warm 14Homes is not being measured

Operational targets are being exceeded but they do not provide a 14useful measure

Fuel poverty has increased since 2004 16

Warm Homes has adapted to meet some emerging challenges 16

Part Three: Eligibility and grant take-up 19

Warm Homes' benefits are considerable 20

The Scheme's marketing is very effective 20

Passport benefits may not be effective in targeting the vulnerable fuel poor 20

Unclaimed benefits are a barrier for potential applicants 21

Some groups are excluded from the Scheme 22

There is targeting of those in the greatest need but some gaps exist 22

Grant allocations are concentrated in urban areas 23

Warm Zones provides a model for targeting assistance 23


Page

Part Four: Energy efficiency measures 25

Warm Homes offers a wide range of measures 26

Some eligible households are not well served 27

Some measures have little impact on household energy efficiency 28

Part Five: Management of the Warm Homes Scheme 31

Eaga plc, a leading UK energy efficiency company, is the 32Warm Homes Scheme manager

Roles and responsibilities 32

Costs of the Scheme have been increasing 33

The cost of individual measures has increased substantially 33

The Scheme’s maximum grant has been increased 34

Annual quality assurance reviews have repeatedly identified areas 35of low standards of provision

The Department has extended Eaga’s contract 39

The Contract provides for the recovery of excess profits 39

Appendix 1: Comparisons of Fuel Poverty Schemes in the UK 42

Appendix 2: Transforming Lives: Lessons Learned and Shared ‘Home is 43Where the Heat is’ project, Armagh and Dungannon Health Action Zone, 2002

Abbreviations


DEFRA The Department for Environment, Food and Rural Affairs

MLA Member of the Northern Ireland Legislative Assembly

NAO National Audit Office

NIE Northern Ireland Electricity Energy Ltd

NIFPAG Northern Ireland Fuel Poverty Advisory Group

NIHCS Northern Ireland House Condition Survey

NIHE The Northern Ireland Housing Executive

RPI Retail Price Index

SAP Standard Assessment Procedure for energy rating of dwellings

Executive Summary

Executive Summary

2 Warm Homes: Tackling fuel poverty

Introduction

1. A household is in fuel poverty if, in order tomaintain an acceptable level of temperaturethroughout the home, the occupants wouldhave to spend more than 10 per cent oftheir income on all household fuel use.1 Thethree key factors in fuel poverty arehousehold income, energy costs and theenergy efficiency of the dwelling.

2. The Department for Social Development (theDepartment) is committed to ending fuelpoverty in Northern Ireland. Its document‘Ending Fuel Poverty: A Strategy forNorthern Ireland’, published in 2004,established targets of eliminating fuel povertyin vulnerable households (householders onspecific benefits and have a disablility orare over 60 years old or have children) andin the social rental sector by 2010 and innon-vulnerable households by 2016.

3. The Warm Homes Scheme is sponsored bythe Department. It is a key element inaddressing fuel poverty amongst vulnerableowner occupiers and private rentedhouseholds. Established in July 2001, theScheme’s budget has grown steadily, from£5 million in 2001-02 to £22million in2007-08. A total of £109 million wasspent on the scheme by 31 March 2008:£98 million from the Department and £11million from Northern Ireland ElectricityEnergy Ltd (NIE), funded by the energyefficiency levy.

1 Ending Fuel Poverty: A Strategy for Northern Ireland Department for Social Development, 2004. The Department adoptedthe World Health Organization standard, 210C in the living room and 180C in the other occupied rooms, as theacceptable household temperature.

Key findings

4. Warm Homes has helped to improve thelives of many. The Scheme has providedenergy efficiency measures to some 60,000homes since 2001: in 2007-08 it gavegrants averaging £1,835 to almost 11,300households. It has contributed to a range ofgovernment priorities beyond addressing fuelpoverty, such as better health and fewerwinter deaths, improved air quality andreduced carbon dioxide emissions.

5. Nevertheless, there are a number of ways inwhich Warm Homes could be improved tomeet the challenge of eradicating fuelpoverty:

• performance monitoring is simplistic anddoes not provide robust information withwhich to measure progress;

• the current eligibility criteria excludesignificant numbers of the fuel poor, whileproviding assistance to many householdswhich are not in fuel poverty;

• the energy efficiency measures availableare not sufficient to lift some householdsout of fuel poverty and their impact insome households is negligible;

• the costs of scheme measures haveincreased considerably since 2001, inexcess of inflation; and

• independent quality assurance has raisedsignificant concerns about the quality andtimeliness of the works completed over anumber of years.

Warm Homes: Tackling fuel poverty 3

2 Eaga plc is a leading organisation in the management and delivery of the UK’s grant-funded programmes aimed at tacklingfuel poverty. It has an office in Dungannon and its headquarters are in Newcastle upon Tyne, England.

3 The Northern Ireland Housing Executive’s ‘2006 Northern Ireland House Condition Survey’ (to be published September2008) – the survey report has not been made available to the Northern Ireland Audit Office.

6. In part, these issues reflect the Scheme'shistory. Warm Homes' predecessor, theDomestic Energy Efficiency Scheme (DEES),was not designed to address fuel poverty.DEES was upgraded and launched asWarm Homes in July 2001, more than threeyears before the publication of NorthernIreland's fuel poverty strategy in November2004. The strategy embraced WarmHomes as a tool to eliminate fuel povertyamongst vulnerable groups, even though itwas primarily an energy efficiency schemenot best suited to this purpose.

7. The Department is currently reviewing WarmHomes as it prepares to let a new contractfor managing the scheme. The currentscheme manager is Eaga plc2 (Eaga). TheDepartment’s review will consider the issuesin this report and it appears likely that it willseek considerable changes to the Schemeunder the new contract.

8. The rest of this summary explores the issuesin more detail and containsrecommendations to address them.

Detailed findings

9. Warm Homes has great potential value tobenefit the fuel poor. It has significantly moreresources and provides a wider range ofmeasures than its predecessor, DEES. TheScheme remains very popular with itscustomers, providing significant benefits inhousehold warmth and affordability.

10. Warm Homes is the primary tool foreliminating fuel poverty amongst vulnerableowner-occupiers and private rentedhouseholds, and as such is central to the fuel

poverty strategy. However, the Department’sstrategic objective of eliminating fuel povertycannot be achieved by the Scheme alone.Fuel poverty is a product of householdincome levels, the costs of fuel as well ashousehold energy efficiency. The Departmenthas no control over household income levelsand fuel costs.

11. The Department has established milestonetargets for all households in fuel poverty, butthese are not broken down between types ofhousing tenure i.e. owner occupied, privaterented and social housing sectors. WarmHomes' contribution to eliminating fuelpoverty is therefore not being measureddirectly. Operational targets for the Schemehave been exceeded consistently, but theirsimplicity does not provide a useful measureof progress towards the strategic objective.This is because the targets and monitoringare based solely on the number of homestreated rather than on the impact of suchtreatments, either in terms of liftinghouseholds from fuel poverty or, as areasonable proxy, the improvement inhousehold energy efficiency.

12. At the current rates of activity the Scheme isunlikely to achieve its objective. The worldwide rises in energy costs have drawnsignificant numbers into difficulty since 2004and the Department informed us that thelatest research3 estimates that in 2006 therewere 225,500 households, 34 per cent ofall households in Northern Ireland,experiencing fuel poverty. As the 2010deadline approaches it is hard to see howfuel poverty can be eliminated amongst thetarget group without a massive and costlyexpansion of the Warm Homes Scheme.

Executive Summary


13. The Scheme's marketing is very effective.The use of passport benefits to defineeligibility for grants provides a simple meansof administering applications, but excludesgroups such as the working fuel poor, thenear benefit pensioners and those who,while eligible for benefit, do not claim it.Fuel poor adults below 60 years old, butwithout dependent children or a disabilityare considered non-vulnerable and remainoutside the scope of Warm Homes. Thesegroups, taken together, have been estimatedto represent at least 35 per cent of the fuelpoor and some means of addressing theirneeds will be necessary if the Government isto meet its targets. The use of AttendanceAllowance and Disability Living Allowance,which are not means tested, as passportbenefits means that almost half of all grantsgo to households that are not necessarily infuel poverty.

14. The wide range of energy efficiencymeasures available under the Schemeprovides flexibility in meeting the needs ofdifferent households, but some householdsare not well-served. Central heating systemsare only available to the over 60s, althoughexperience suggests that householdsreceiving only insulation measures areunlikely to be lifted from fuel poverty. Theproblem of 'hard to treat' homes, typically inrural areas away from the gas network, is along standing one which Warm Homes hasnot yet addressed. The Department istrialling the use of solar energy as apotential solution.

15. Grants are not directed towards the leastenergy efficient homes. In 2006-07, 30 percent were awarded to energy efficienthouseholds that were at little risk of fuel

poverty, that is, those with StandardAssessment Procedure (SAP) for dwellingsenergy ratings of 65 or more. Only 16 percent of grants went to the least energyefficient households i.e. SAP ratings of 30or less. The benefits of some grants can beminimal. Some of the measures provided,such as compact fluorescent light bulbs anddraught proofing, have little or no impacton household energy efficiency andfuel poverty.

16. The costs of the Scheme’s measures haveincreased substantially, much more thaninflation, over the period of the Scheme.While there are no direct comparisons withcosts in other similar schemes in GB, thelower costs of heating systems in England'sWarm Front Scheme are only partiallyexplained by differences in Warm Homes'technical specification. The timeliness andquality standards expected from Eaga andits registered installers (sub-contractors) havenot been achieved, and a substantialbacklog has developed for installation ofheating systems – by the end of March2008 the waiting list for heating systemswas equivalent to two years work (based oncurrent funding). Eaga stated that timelinesshad not been achieved in most cases due tothe Scheme being over-subscribed and, inits view, quality assurance monitoring hasbeen carried out in line with the NorthernIreland Housing Executive (NIHE)specifications and not specifications for theWarm Homes Scheme. The Departmentextended Eaga plc’s contract as schememanager on two occasions (July 2004 toJune 2006 and July 2006 to June 2008),as allowed for under the contract. Thecurrent contract with Eaga runs to 30 June 2008.


17. The Department considers that the WarmHomes Scheme has contributed significantlyto the alleviation of fuel poverty in NorthernIreland. NIHE, drawing on data from the2006 Northern Ireland House ConditionSurvey (paragraph 12), estimated that thelevel of fuel poverty in Northern Ireland in2006, 34.2 per cent of households, wouldhave increased by 19.4 per cent to 53.7per cent had it not been for the effects ofreduced energy consumption. This is basedon energy savings resulting from energyefficiency improvements in social andprivately owned/rented houses, and otherfactors such as fuel switching, changes inhousehold size and dwelling floor areas; thespecific contribution of the Warm HomesScheme to the reductions in energyconsumption and fuel poverty has not beenseparately quantified.

18. The Department also informed us that it wantsto improve the Warm Homes Scheme as animportant tool in the alleviation of fuel poverty,and that it had begun working on theimplementation of our findings followingreceipt of our draft report in March 2008. InMay 2008, in response to the recentsignificant increases in fuel prices, the SocialDevelopment Minister established a FuelPoverty Task Force to develop practical short-term measures to alleviate fuel poverty amongthe most vulnerable this winter. The Task Forceis to report back to the Minister before theend of summer 2008. The Departmentinformed us that it is the Minister’s intention tothen seek the support of the Executive for apackage of short-term measures to assist themost vulnerable fuel poor.

Recommendations

19. For all the reasons above, Warm Homesdoes not make the contribution that it couldto eradicating fuel poverty. The Departmentshould consider how the Scheme can bematched more closely with the objectivesand targets set out in the Fuel PovertyStrategy. Consideration should also be givento a review of the eligibility criteria and ofthe energy efficiency measures available.Preparations for letting the new contract formanaging the Scheme from July 2008provide an opportunity to implement thechanges necessary to improve the economy,efficiency and effectiveness of WarmHomes.

20. Our specific recommendations are:

• Performance management. TheDepartment should establish performancemonitoring with related targets that canmeasure directly Warm Homes'contribution to eradicating fuel poverty.Ideally, these would measure the impacton household fuel poverty of WarmHomes' intervention, although a measureof the impact on household energyefficiency could be a useful proxy. Thismay require a fuel poverty indicator toolfor Northern Ireland, similar to thatdeveloped by the Centre for SustainableEnergy and the University of Bristol inEngland. Continuous monitoring, withtimely action to address any emergingrisks or shortfalls in performance will benecessary;

Executive Summary


• Eligibility. The Department should focusassistance on those in fuel poverty whoneed help the most. A review of theeligibility criteria should consider how thenon-vulnerable fuel poor - those in lowpaid work, near benefit pensioners andothers - can be supported; whileexcluding those who are eligible underthe current criteria but are not fuel poor.The extension of the benefits health checkto include all applicants would be auseful first step. It may also be necessaryto introduce specific targets for assistingthe rural fuel poor and those in extremefuel poverty. Restricting eligibility to thoseon low incomes, as evidenced by receiptof means tested benefits, wouldconcentrate help on those in need;

• Energy efficiency. Warm Homes shouldprovide the most effective measures to lifthouseholds out of fuel poverty. Thisshould include making central heatingavailable to all those who qualify forgrants. Established solutions for ‘hard totreat’ homes, while comparativelyexpensive, should be made availablewithin the Scheme on an exceptionalbasis. These may include renewable

technologies such as solar water heating.Directing support towards the mostenergy inefficient homes, perhaps byestablishing a target household energyefficiency rating for all homes treated,would make the most effective use ofthe Department's resources. This couldrequire limiting any spending onenergy efficient homes and on somemeasures which have little impact onfuel costs; and

• Contract management. The Departmentshould consider whether the substantialincrease in the cost of measures isjustified and whether a differentspecification or approach to sub-contracting could potentially reducecosts. There is a need to ensure thattimeliness and quality standards aredelivered consistently and that wherethere are ambiguities in the technicalspecification, that these are resolved andthe targets revised accordingly. TheDepartment should also monitor Eaga’sfinancial performance and ensure that itenforces the profit sharing clause in theContract.

Part One:Warm Homes and fuel poverty

Part one:Warm Homes and fuel poverty


Warm Homes

1.1 Warm Homes replaced the Domestic EnergyEfficiency Scheme in July 2001. It is basedupon a similar scheme in England calledWarm Front, which has operated since June2000. Warm Homes provides grants tovulnerable householders (those on specificbenefits and who have a disability or areover 60 years old or have children) for thecosts of home insulation measures, such ascavity wall and loft insulation. In addition,grants are available under the banner ofWarm Homes Plus to vulnerablehouseholders over 60 years old for theinstallation of new heating systems. Thecurrent maximum grants are £850 forinsulation measures under the Scheme and£4,300 for insulation and heating systemsunder Warm Homes Plus.

1.2 The Scheme is funded and overseen by theDepartment for Social Development (theDepartment). Scheme management isdelegated under contract to Eaga plc (Eaga)which is responsible for marketing,administration and managing the delivery ofenergy efficiency measures to households byits sub-contractors (Eaga carries out a similarfunction for Warm Front in England, and forthe Home Energy Efficiency Scheme inWales). The Northern Ireland HousingExecutive (NIHE) performs some key clientfunctions, making payments to Eaga underthe contract and quality assuring the workcarried out in homes.

1.3 The scale of Warm Homes has grownsubstantially since 2001 (Figure 1). TheDepartment’s expenditure of £98.2 million,to March 2008, includes £12.5 million fees

paid to Eaga, the scheme manager, and£85.7 million on the energy efficiencymeasures; a further £10.8 million fromNorthern Ireland Electricity Energy Ltd (NIE)was spent where the costs of the energyefficiency measures required by householdsexceeded the Warm Homes Plus maximumgrant. The growth in expenditure reflects notjust the increased activity in Warm Homesover this period, but also the increased costsof installing energy efficiency and heatingmeasures. To meet these costs and to ensurethat households continued to receiveappropriate assistance, the maximum grantamounts available also increased from£750 and £2,700 to the current levels, forinsulation measures and Warm Homes Plusrespectively.

Figure 1: Warm Homes Scheme expenditure1 by theDepartment and households treated annually, 2001to 2008

Year Expenditure (£s) Households

2001-02 4,327,000 3,826

2002-03 8,984,000 7,484

2003-04 10,672,000 7,124

2004-05 13,633,000 8,557

2005-06 16,447,000 10,266

2006-07 22,143,000 11,687

2007-08 22,025,000 11,279

Total 98,231,000 60,223

Note: 1In addition to the £98.2 million spent by the Department,a further £10.8 million was spent on the Scheme by NIE, fundedby the energy efficiency levy.

Source: the Department


1.4 Eligibility for the Scheme is limited to thevulnerable. The Department has definedvulnerable householders as being amongstthree main groups: those with children andin receipt of specific benefits; people withdisabilities receiving specific benefits; andthe over 60s receiving specific benefits. Anyof these groups living outside the socialrented housing sector are eligible to receiveWarm Homes' grants.

1.5 The receipt of a specific benefit is the key toeligibility. The definition of a fuel poorhousehold is one where more than 10 percent of income is spent on energy costs. Inthe Department's view, a test to establish theincome and fuel costs of an applicant to theScheme would be intrusive and difficult toadminister. Consequently, it has identified anumber of benefits, the receipt of whichconstitutes a 'passport' to eligibility for agrant (Figure 2).

Measures available

Cavity wall insulation

Reflective radiator panels (solid walls only)

Loft insulation

Draught proofing to windows and doors

Hot water tank jackets

Compact fluorescent lamps

Energy advice

Benefits health check

Eligibility criteria

Householders of any age (the applicant or their spouse) whohave a child under the age of 16 and who are in receipt ofone or more of the following benefits:

• Housing Benefit • Rates Rebate • Income Support • Income Based Job Seekers Allowance • Child Tax Credit & NHS Tax Exemption Certificate (can

apply to children over the age of 16 in full time education) • Expectant mothers in receipt of a Maternity Certificate (MAT

B1) and one of the above benefits.

Householders under the age of 60 (the applicant or theirspouse) who are in receipt of one or more of the followingdisability related benefits:

• Disability Living Allowance • Housing Benefit (with Disability Premium) • Rates Rebate (with Disability Premium) • Income Support (with Disability Premium) • Working Tax Credit (with Disability Premium) & NHS Tax

Exemption Certificate • War Disablement Pension (with Mobility Supplement or

Constant Attendance Allowance) • Industrial Injuries Disablement Benefit (with Constant

Attendance Allowance)

Figure 2: Eligibility criteria and measures available



1.6 Once accepted, applicants can receive arange of heating and insulation measures,depending on their circumstances. Thoseaged below 60 qualify for Warm Homesand can receive insulation measures only.The over 60s qualify for Warm Homes Plus,and are eligible for heating and insulationmeasures up to the £4,300 grant maximum.Unlike Warm Front in England, wherehouseholders meet the excess costs ofmeasures over the grant maximum, WarmHomes requires no financial contributionfrom the householder. Where the cost of themeasures installed is higher than themaximum grant, the difference is made upby the NIE contribution to the Scheme.

1.7 A comparison of the grant levels, eligibilitycriteria and measures available within thevarious government energy efficiencyschemes in the UK is shown at Appendix 1.

1.8 The process for getting help under theScheme is relatively straightforward. Eagamarkets Warm Homes to generate enquiriesfrom eligible householders. Some basicquestions, over the telephone or in a postalapplication, establish whether the applicantappears eligible for assistance. If so, asurveyor visits the household to confirmeligibility and to assess what heatingand/or insulation measures should beinstalled. Subsequently, more detailedtechnical surveys are carried out by theregistered installers sub-contracted by Eaga,to confirm what work is required beforeundertaking the installation. Eaga thencompletes quality assurance checks on thefinished work.

1.9 Heating and insulation measures installedunder the Scheme have resulted in warmer,more comfortable homes, with lower energy

Measures available

Warm Homes Plus, including all of theabove, plus:

Conversion of an existing bottled gas,solid fuel central heating system orEconomy 7 to oil or natural gas

Installation of a new fully controllable,energy efficient oil or gas central heatingsystem

Repair/upgrade of an existing oil/naturalgas central heating system

Eligibility criteria

Householders who are 60 years and over and are in receipt ofone or more of the following benefits:

• Rate Rebate • Housing Benefit • Pension Credit • Income Based Job Seekers Allowance • Attendance Allowance • Disability Living Allowance • Working Tax Credit (with Disability Premium) & NHS Tax

Exemption Certificate • Industrial Injuries Disablement Benefit (with Constant

Attendance Allowance) • War Disablement Pension (with Mobility Supplement or

Constant Attendance Allowance)

Figure 2 (continued): Eligibility criteria and measures available

Source: Eaga plc


4 Speech by Margaret Ritchie, Minister for Social Development, 29 May 2007.

bills, for thousands of households since2001. The Scheme is popular amongstthose receiving assistance. Annual surveysconducted by Eaga and by NIHE showcustomer satisfaction ratings consistentlyabove 90 per cent.

Fuel poverty

1.10 Fuel poverty is, principally, a function ofthree distinct features:

• low household incomes;

• high energy prices; and

• inefficient home heating and insulation.

Northern Ireland has the highest rate of fuelpoverty in the UK. The 2001 NorthernIreland House Condition Survey (NIHCS)estimated that 203,000 households (33 percent of the total) fit the definition of ‘fuelpoor’. This estimate was significantly higherthan equivalent estimates for Scotland (17per cent) and England (9 per cent). Whilethe 2004 interim NIHCS estimated that fuelpoverty had reduced, affecting 153,000households (24 per cent), this rate wasmore than three times higher than the NorthEast of England, the worst affected Englishregion.

1.11 The NIHCS presents a picture of fuelpoverty in Northern Ireland. The 2004estimates show that:

• fuel poverty is highest amongst owneroccupiers and those who rent their homesprivately;

• pensioners are the largest single groupamongst the fuel poor. More than 40 percent of all pensioners are in fuel poverty;

• 28 per cent of fuel poor households areheaded by someone in work - the'working fuel poor'; and

• 40 per cent of the fuel poor live in ruralareas.

It is expected that the 2006 NIHCS willshow an increase in fuel poverty due to theworld-wide increases in the cost of energyin this period. The results of the 2006NIHCS are due to be published inSeptember 2008.

1.12 The effects of being fuel poor are hard toquantify in definitive terms, but areundoubtedly severe. It is estimated that morethan 1,000 older people die due to thecold every year. Illnesses such as ‘flu, heartdisease and strokes are more prevalent andtheir effects worsened. It also impacts uponthe quality of life of those affected, withreports of increased stress, isolation andloneliness. The Department estimates that illhealth associated with cold weather coststhe National Health Service around £40million a year.4

What we did

1.13 We evaluated the contribution made byWarm Homes towards the strategicobjective set out in ‘Ending Fuel Poverty: AStrategy for Northern Ireland’ of eliminatingfuel poverty amongst vulnerable householdsby 2010. In particular, we considered



whether the Scheme's performance ismanaged to maximise its contribution to thestrategic objective of eliminating fuelpoverty, addressing these key questions:

• do the Warm Homes Scheme grantsreach the vulnerable fuel poor?

• do grants provide significant homeheating and insulation measures?

• is the contract managed effectively todeliver the best outcomes for the fuelpoor and the taxpayer?

1.14 We used a variety of methods to gather ourevidence. We interviewed senior officials inthe Department, the NIHE and in Eaga plcand examined the data and files held bythem. We worked closely with theDepartment's officials responsible for lettingand managing the new contract. We soughtthe views of stakeholders in the NorthernIreland Fuel Poverty Advisory Group5,individually and in a focus group. We alsoconsidered the findings of the NationalAudit Office review of Warm Front in20036 and the subsequent work to assessthe impact of its recommendations.

5 The Northern Ireland Fuel Poverty Advisory Group comprises experts from a wide variety of organisations in the public,private, voluntary and community sectors. It advises Government on the nature and extent of fuel poverty in Northern Ireland,provides views on the Fuel Poverty Strategy, policies and initiatives, considers the effectiveness of policies and identifies thebarriers and solutions to reducing fuel poverty.

6 Warm Front: Helping to Combat Fuel Poverty, NAO June 2003 HC 769.

1.15 Our report considers:

• the performance managementarrangements for Warm Homes, and itsimpact in reducing fuel poverty in Part 2;

• the eligibility criteria, and whether grantsare reaching the vulnerable fuel poor inPart 3;

• the measures available under the Schemeand if they are effective at improvingenergy efficiency in Part 4; and

• the management of the Contract inPart 5.

Part Two:Performance management of Warm Homes



2.1 Performance management is nowrecognised widely as being key toimproving public services.7 A performancemanagement system provides a frameworkfor planning, monitoring, reviewing andrevising what an organisation does toachieve its strategic objectives. Theperformance management system needs tobe integrated with resource management, toensure the necessary financial and otherresources are available to support thedelivery of the objectives, and with riskmanagement arrangements to ensure thatany risks to achieving the objectives areidentified and managed.

2.2 This part of our report considers theeffectiveness of the Department'sperformance management arrangements forWarm Homes.

Strategic targets and milestones exist but theimpact of Warm Homes is not beingmeasured

2.3 The Department’s ‘Ending Fuel Poverty: AStrategy for Northern Ireland’ (2004)established a clear target to eliminate fuelpoverty amongst vulnerable households (seeFigure 2) by 2010, and in non-vulnerablehouseholds by 2016, subject to theavailability of the necessary resources. TheStrategy also established a series ofmilestone targets to achieve the 2010 target(Figure 3).

2.4 These targets include vulnerable householdsin the social rented sector. There are nospecific milestone targets for ending fuelpoverty amongst the vulnerable owner

7 Devolving decision making - Delivering better public services: refining targets and performance management HM Treasuryand Cabinet Office, March 2004.

occupiers and private renters for whomWarm Homes is designed. The contributionof Warm Homes to achieving the target istherefore not being measured directly.

Operational targets are being exceeded but theydo not provide a useful measure

2.5 The Department has identified annual targetsfor households assisted by Warm Homes(Figure 4). These have generally beenexceeded by actual performance.

2.6 These targets do not, however, provide auseful measure of the Scheme's contributionto eliminating fuel poverty. In particular, theydo not take account of the reduction inhousehold fuel poverty resulting from WarmHomes' measures.

2.7 A household assisted with, for example,energy efficiency advice and compact

Figure 3: Milestone targets

Year Number of vulnerable householdsthat suffer fuel poverty

2004 158,000

2005 138,000

2006 110,000

2007 80,000

2008 50,000

2009 20,000

2010 0



8 SAP is the Government's Standard Assessment Procedure for Energy Rating of Dwellings. The current specification, SAP2005, measures energy efficiency on a scale from 1 (least efficient) to 100 (most efficient).

fluorescent light bulbs counts equally formeasuring performance with a householdwhere the full range of heating andinsulation measures have been installed. Yetthe improvement in energy efficiency (asmeasured by the household's SAP rating8),and consequently the impact on fuel poverty,in the first household is likely to be minimalcompared to the impact achieved in thesecond household. The Department does notcollect information about the improvement inenergy efficiency per household from thescheme manager, which would provide aready basis for measuring Warm Homes'performance. The Department told us that itis monitoring the use, in GB, of a fuelpoverty indicator tool developed by theCentre for Sustainable Energy and theUniversity of Bristol. It is to consider theeffectiveness of the tool in the NorthernIreland context and will also commissionwork to map fuel poverty in Northern Ireland

which, in its view, may provide a moreeffective indicator tool.

2.8 If the Strategy is to eliminate fuel poverty forvulnerable households, then a measure thatreflected the movement of households out offuel poverty as a result of Warm Homes'intervention would be the best indicator ofperformance. It is notable that in 2004, theDepartment for Environment, Food and RuralAffairs (DEFRA) in England introduced atarget SAP rating of at least 65 for theenergy efficiency of any household treatedby Warm Front, being of the view that thislevel of home energy efficiency presents aminimal risk of fuel poverty.

2.9 The Department informed us that its targetsfor the Warm Homes Scheme weredeveloped within a context of a smallerbudget but were not revisited as the budgetincreased year on year. It also informed usthat it is developing a more meaningfultarget, relating directly to the alleviation offuel poverty, to be included as part of arevised Warm Homes Scheme. While someoperational changes have already beenmade to the current scheme in line with thefindings of our report, a number of otherchanges, including eligibility criteria, arepolicy changes which require equalityassessment, public consulation andtranslation into subordinate legislation beforea revised scheme can be adopted. TheDepartment plans to have a draft WarmHomes Scheme document ready by July2008 which will then be subject toconsultation and which will form the basisfor the procurement exercise to select a newscheme manager.

Figure 4: Warm Homes' performance,2001 to 2008

Year Target households Actual householdsassisted assisted

2001-02 4,250 3,826

2002-03 6,250 7,484

2003-04 6,250 7,124

2004-05 8,250 8,557

2005-06 8,250 10,266

2006-07 10,000 11,687

2007-08 10,000 11,279




Fuel poverty has increased since 2004

2.10 The Department relies on the data from theNIHCS to derive its estimates of the extentof fuel poverty and consequently monitor theachievement of its targets. The latest NIHCSwas completed in 2006 after the previousfull survey in 2001. An interim survey tookplace in 2004. As the NIHCS is carried outevery five years, with an interim survey inbetween, the Department does not have aneffective mechanism to continuously monitorprogress. Without this, it is difficult for theDepartment to react swiftly to changingdemands for resources or to emerging risks.

2.11 Previous results from the NIHCS haveindicated good progress being made. Theinterim survey in 2004 estimated that fuelpoverty in vulnerable households haddecreased to 126,000, against a target of158,000. The results of the 2006 survey,however, indicate that this progress has notbeen maintained. The number of householdsin fuel poverty rose to 225,500, comparedwith the target of 110,000. Around 34 percent of households are now fuel poor. Thiscompares with 27 per cent (167,000households) in 2001, based on the 2006NIHCS methodology. The goal ofeliminating fuel poverty amongst vulnerablehouseholds by 2010 was always achallenging one, but the current rate ofprogress suggests that it is now unrealistic.The rise in energy costs since 2004 isaccepted widely as the key factor in thissituation.9

2.12 It is arguable that the strategic objective wasnever likely to be achieved. It required atleast 158,000 vulnerable households to be

9 The price of standard crude oil on the New York Mercantile Exchange was $40 a barrel in June 2004. In January 2008 itwas $100 a barrel.

10 2001 Northern Ireland House Condition Survey, NIHE.

taken out of fuel poverty between 2004 and2010, without any others falling into fuelpoverty during this period. A proportion ofthese households, 37 per cent, were insocial housing and therefore outside thescope of Warm Homes. Accordingly, almost100,000 households needed to receive aWarm Homes grant between 2004 and2010 to achieve the objective, an averageof more than 16,500 annually. Yet theoperational targets for Warm Homes wereto treat 8,250 households in 2004-05 and2005-06, and 10,000 thereafter. Whileactual performance has bettered this, thescheme has not treated 12,000 householdsin any year and if the current rate of activityis maintained, Warm Homes will haveprovided around 66,000 grants by 2010.

2.13 There are also limitations inherent in anyapproach to tackling fuel poverty based onimproving household energy efficiency.While energy efficiency measures makehomes more comfortable and easier to heatthey do not affect household income and thebenefits of lower heating costs can bequickly eroded by rising energy prices. It isnotable that analysis of the results from the2001 NIHCS10 estimates that even if allhouseholds in Northern Ireland were broughtto an acceptable level of energy efficiency,17 per cent would still be in fuel poverty.

Warm Homes has adapted to meet someemerging challenges

2.14 The Scheme has grown significantly inexpenditure and in the numbers ofhouseholds treated since its introduction in2001. This is partly a consequence of new


sources of funding being made available -for example, the Government's Environmentand Renewable Energy Fund contributedmore than £9 million to the Warm Homesbudget between 2006-07 and 2007-08 -but it also reflects the increasing costs of theScheme's measures. Grants for heatingsystems, in particular, rose from an averageof £2,628 in 2001 to £2,907 in 2004,and by 2006-07 the average grant hadreached £3,859.

2.15 Some changes have been made in reactionto risks identified as a result of theDepartment's monitoring. In 2004 theDepartment completed an internal review ofthe Scheme which took account of severalissues highlighted in reports by a number ofstakeholders, including National EnergyAction (NI), the General Consumer Councilfor Northern Ireland and the NAO's 2003review of Warm Front6. Subsequently,changes were introduced to the measuresavailable, such as extending the eligibilitycriteria to include the over 60s receivingdisability related benefits, the provision ofthe first annual service to a newly installedheating system, and the benefits healthcheck.

2.16 Otherwise, Warm Homes remains much asit was in its first year. A number of the risksidentified by the Department and otherstakeholders, including several highlighted inthis report - the exclusion of some fuel poorhouseholds from the Scheme, the problem of'hard to treat' homes and the limitedeffectiveness of some energy efficiencymeasures in lifting households from fuelpoverty - have not so far been addressed.

2.17 In May 2008, in response to the recentsignificant increases in fuel prices, the SocialDevelopment Minister established a FuelPoverty Task Force to identify how fuelpoverty can be addressed for the comingwinter. The Task Force brings together all ofthe main stakeholders in the energy sector toidentify practical ways of helping the mostvulnerable and it is to report back to theMinister before the end of summer 2008.The Department informed us that it would bethe Minister’s intention to then seek theExecutive’s support for a package of short-term measures to assist the most vulnerablefuel poor.

Part Three:Eligibility and grant take-up



3.1 Reaching the right people is essential to thesuccess of Warm Homes. To achieve this,the Scheme should be marketed effectivelyto generate applications; the eligibilitycriteria should focus assistance on thevulnerable fuel poor; and grants should betargeted at those most in need.

3.2 This part of the report examines whetherWarm Homes is effective in targeting thevulnerable fuel poor for help.

Warm Homes' benefits are considerable

3.3 The Scheme has assisted 60,223households since 200111. Its popularityamongst its customers remains very high, asmeasured by the satisfaction surveyscompleted by the scheme manager and bythe NIHE:

• 93 per cent of customers were satisfiedor very satisfied with their new heatingsystem;

• 94 per cent were satisfied with theirinsulation measures; and

• overall satisfaction with the scheme ismore than 90 per cent12.

3.4 Warm Homes' grants have helped toimprove the energy efficiency of thousandsof homes. In 2006-07 the averageimprovement for homes treated was 20 SAPpoints (the latest available figures). Insulationand heating measures have also served tocut carbon dioxide emissions and led towarmer, healthier homes for some of themost vulnerable people in society.

11 To 31 March 2008.12 Typical responses from several customer satisfaction surveys by Eaga and NIHE.

The Scheme's marketing is very effective

3.5 The scheme manager, Eaga plc, works witha wide variety of organisations to publiciseWarm Homes and generate referrals frompotential applicants. These includeorganisations in the National Health Service(NHS), the voluntary sector, energycompanies and local authorities. Politiciansfrom all parties have also been engaged topublicise the Scheme. Other typicalmarketing activity includes mail shots,directly by Eaga and in conjunction withother organisations such as the NIHE.

3.6 This has been effective in generatinginterest. By the end of 2003-04, Eaga hadreceived 13,000 enquiries in response to itsmarketing activity in the year. TheDepartment's evaluation of Warm Homes in2004 concluded that... “Eaga's sustainedmarketing activity has ensured that highlevels of referrals are achieved… across thewhole of Northern Ireland.” Otherstakeholders we consulted expressedconsistently positive views of the success ofEaga's marketing strategy.

Passport benefits may not be effective intargeting the vulnerable fuel poor

3.7 Passport benefits undoubtedly provide aconvenient mechanism for allocating WarmHomes' assistance. While a morecomplicated eligibility test to identifyvulnerable households in fuel poverty wouldguarantee that the Scheme's help wasdirected towards those most in need, therewould be a number of drawbacks. Anobjective test of household income would be


13 A fuel poverty solution? Assessing the effectiveness of the Warm Homes Scheme, National Energy Action (NI) 2003.14 Income related benefits estimates of take-up in Northern Ireland 2004–06.15 Up to 23 per cent of those eligible do not claim Income Support. Up to 39 per cent of those eligible do not claim

Jobseeker's Allowance.

feasible, but more of an administrativeburden than current arrangements. Theincome test would need to be matched witha test of household spending on energywhich would be equally taxing. However,the difficulties of this kind of approach aremost apparent when the effects of 'churn' -the movement of households into and out offuel poverty over time, as fuel costs andincome rise and fall - are taken into account.

3.8 A modest rise in income can be enough tolift a household out of fuel poverty, under theGovernment's definition. A subsequent rise infuel costs can bring that same householdback into fuel poverty. Even the apparentlysimple relationship between income and fuelcosts can be complicated by the effects ofthe seasons: the lower demand for energymay mean that a low income household isnot fuel poor in the summer months, butbecomes so as winter draws in and itsdemand for heating and lighting increases.For all these reasons, eligibility criteriabased on household income and spendingon energy would be complex to administerand possibly act as a disincentive toapplicants.

3.9 Nevertheless, the evidence is that the currentarrangements do not direct Warm Homes'assistance to those who need it most. Astudy by National Energy Action (NI) in200313 suggested that 40 per cent ofgrants went to households that were not fuelpoor, principally due to the presence of non-means tested benefits amongst the passportbenefits that determine eligibility.

3.10 Attendance Allowance and Disability LivingAllowance are not means tested andconsequently are not reliable as indicators of

poverty. In 2006-07, 5,524 grants forheating and insulation worth £7.9 millionwere awarded to applicants receiving thesebenefits. This represented 39 per cent of theWarm Homes’ budget for energy efficiencymeasures spent on households that may nothave been experiencing fuel poverty.

3.11 The Department considers that the currenteligibility criteria for Warm Homes are fairlyrobust, as most of those assisted are onincome related benefits and consequently infuel poverty. While it acknowledged thatsome of those assisted, because theyreceive a non-means tested disability benefit,may not be in fuel poverty, it considered, onbalance that most probably are. However, italso informed us that it will giveconsideration to either changing theeligibility criteria or introducing some form ofmeans testing, although, in its view, abalance needs to be struck, as meanstesting can be cumbersome and expensive.

Unclaimed benefits are a barrier for potentialapplicants.

3.12 Pensioners are the biggest single groupamongst the fuel poor: 54 per cent of thosein fuel poverty are over 60. TheDepartment's estimates of benefits taken upsuggest that as many as 51 per cent ofeligible pensioners do not claim PensionCredit14, a passport benefit for WarmHomes. Estimates of take-up for IncomeSupport and Jobseeker's Allowance amongstnon-pensioners also reveal significantproportions of unclaimed benefits15. Benefitshealth checks could play an important rolein increasing the proportion of claimantsreceiving their benefits entitlements. Thesewere made available to successful



applicants to Warm Homes from July 2006,but presently are not provided to rejectedapplicants, that is, those not alreadyreceiving a passport benefit.

3.13 This appears to be a missed opportunity.Providing benefits health checks to those notcurrently receiving a passport benefit couldnot only widen access to the Scheme, byidentifying eligibility to benefit, but also helpto alleviate fuel poverty through theconsequent increase in household income.The benefits health checks provided tosuccessful applicants since July 2006 haveidentified an additional average weeklybenefit increase of £22.82 for 751households16.

Some groups are excluded from the Scheme

3.14 The working fuel poor - the low wagedemployed or self employed - comprise 28per cent of the total group17, but are unlikelyto receive passport benefits and so do notbenefit from the Scheme. 'Near benefit'pensioners and adults below 60 years oldon benefits, but without dependent childrenor a disability, are also outside the eligibilitycriteria. The Department considers that otherassistance schemes provided from the FuelPoverty Partnership Fund, funded bycontributions from the energy companies,local councils and the NHS as well as theDepartment and delivering similar forms ofassistance to Warm Homes, represent ameans to address the needs of these groups.These schemes aimed to assist more than1,100 households in 2006-07, comparedwith the Warm Homes target of 10,000,but access to support depends on a numberof criteria - some of them benefit-based - and

16 Tackling Fuel Poverty: A Partnership Approach, Northern Ireland Fuel Poverty Advisory Group 2007 Annual Report.17 Interim Northern Ireland House Condition Survey 2004, Northern Ireland Housing Executive.

it is difficult to see how sufficient numberswill be helped. Certainly, some effectiveform of assistance will be necessary if theGovernment is to achieve its target oferadicating fuel poverty amongst all groupsin society by 2016.

3.15 The Department, acknowledges that theworking fuel poor were excluded from theWarm Homes Scheme but considered manyhouseholds from this group had benefitedfrom the Fuel Poverty Partnership Fund. Italso informed us that it had commissionedresearch from National Energy Action toexamine how the working fuel poor can beidentified and how those most in need couldbe brought into the Warm Homes Schemewithin existing resources. The research willalso include those pensioners who do notqualify for, or who have not applied forPension Credit.

There is targeting of those in the greatestneed but some gaps exist

3.16 The focus of Warm Homes' attention on theover 60s, people with disabilities and thosewith children demonstrates the Government'scommitment to meeting the needs of themost vulnerable in society. The targeting ofthe over 60s for additional heatingmeasures, beyond the insulation measuresavailable to the other groups, is also a clearstatement of priorities. There remains scopefor further targeting of assistance to meet theneeds of the most vulnerable.

3.17 Warm Homes assistance has been providedstrictly on a 'first come, first served' basis toany household that meets the eligibility


criteria. The Department has a rule of thumbthat 33 per cent of grants should go to theover 60s for heating measures, but this isnot a formal target. There are no prescribedmechanisms to direct assistance towards theneediest, such as those experiencing severeill-health or those who spend 20 per cent ormore of household income to meet the costsof fuel, the 'extreme fuel poor'.

3.18 There are cases of specific targeting of themost vulnerable where, for example, Eagahas prioritised the household survey for someindividuals after representations from adoctor or MLA .This is comparatively rare:Eaga receives, at most, 50 suchrepresentations per year. However, allallocations of work to sub-contractors weremade strictly on the basis of date of referraluntil April 2008. In response to theincreased demand and lengthening waitinglists for heating systems the Department hasintroduced prioritisation of applicationsaimed at those in greatest need. From April2008 Eaga is required to prioritiseapplications from the most vulnerablehouseholds with no central heating, followedby households with expensive solid fuel orelectric central heating. This approach is tobe carried forward into a revised WarmHomes Scheme (paragraph 2.9).

Grant allocations are concentrated in urbanareas

3.19 The rural fuel poor account for 40 per centof the total group, more than 50,000households. Eight per cent of the fuel poorlive in small rural settlements, while 32 percent are in isolated rural households. Rural

households are statistically more likely to beless energy efficient and not connected tothe gas network. Accordingly, the rural fuelpoor can be seen to have greater needsthan those in urban areas.

3.20 Eaga markets the Scheme across NorthernIreland. It does not monitor grant take-upbetween urban and rural areas and thereare no mechanisms to prioritise help for therural fuel poor. The Department for theEnvironment, Food and Rural Affairs(DEFRA), in 2004, reported that less than10 per cent of grants awarded by theWarm Front Scheme in England went torural households and stakeholders agreegenerally that the distribution of grants inNorthern Ireland is unlikely to be verydifferent. Analysis of Warm Homes' grantsawarded in January and February 2008shows that 15 per cent went to isolatedrural households.

3.21 Isolated rural areas appear to besignificantly under-represented. While it isacknowledged that it is easier to identify thefuel poor and to generate applications forassistance in urban areas, more needs to bedone to target the rural fuel poor if WarmHomes is to be successful.

Warm Zones provides a model for targetingassistance

3.22 Area based approaches to provide acoordinated set of benefits advice andenergy efficiency measures to the fuel poorhave proved successful. Amongst thepioneers of these was the BeechmountEnergy Efficiency Project in Belfast, funded



primarily by the Department, which beganin 1999. An evaluation of this scheme in2002 concluded that it had been largelysuccessful in improving energy efficiencyand alleviating fuel poverty: the averageSAP rating per household increased from 38to 68, with average household savings onannual energy costs of £535. Otherreported benefits included an average 7 percent increase in disposable income perhousehold, better health and reducedcarbon dioxide emissions.

3.23 During this period, a similar approach wastaken by the Armagh and DungannonHealth Action Zone. A summary of the'Home is Where the Heat is' project and itsachievements is shown at Appendix 2.More recently, the approach has been takenup by Warm Zones in a number of areas inEngland (Figure 5).

18 Warm Zones: External Evaluation, Energy Saving Trust, March 2005.

3.24 Warm Zones pilots began in five areas inEngland in 2001. The pilots wereindependently evaluated on behalf of DEFRAand the Department of Trade and Industry18.The results showed that a Warm Zone couldreduce fuel poverty in a local area bybetween 20 per cent and 30 per cent, overa period of 3 to 4 years. The role of locallybased 'enablers' to carry out the doorstepassessments and facilitate access toassistance is crucial to success.

3.25 There are now thirteen Warm Zones-typeareas in England. The programme hasproved successful in supporting householdswhich had previously not taken up the helpavailable from, for example, Warm Front.Hard to reach households in NorthernIreland, such as those in rural areas, couldbenefit from a similar approach.

Figure 5: Warm Zones

Warm Zones in England is a large scale, area-based programme delivering a targeted approach to identify fuelpoor households and deliver the benefits of energy efficiency improvements and maximised income. WarmZones is part of National Energy Action the national fuel poverty charity.

Warm Zones works in partnership with local authorities, energy suppliers and others to broker funds from avariety of sources to deliver benefits such as: energy efficiency, carbon savings, fuel poverty reduction, benefitsadvice, health improvements, fire and home security, employment skills and training.

The approach is based on the systematic assessment of households in a given geographical area to establishenergy efficiency standards, income levels, fuel poverty status and eligibility for a range of grants and otherservices. The local partnerships then coordinate the delivery of a range of energy efficiency programmes(including Warm Front), integrated with support for income maximisation through benefits take-up, and addedsocial inclusion, health and well-being initiatives.

Source: Warm Zones Ltd

Part Four:Energy efficiency measures



4.1 Delivering effective home heating andinsulation measures is the key to maximisingWarm Homes' impact. However, householdenergy efficiency is only one of three factorsimpacting on fuel poverty – the other twofactors, household income and fuel prices,are both outside the Department’s control. Ina situation where fuel prices increase morequickly than household income, increasingenergy efficiency becomes more importantin making homes easier to heat and helpinglift them out of fuel poverty. Therefore, themeasures offered by Warm Homes shouldprovide significant improvements inhousehold energy efficiency.

4.2 This part considers the effectiveness of theenergy efficiency measures delivered byWarm Homes.

19 Given the limited gas network, 70 per cent of central heating systems in Northern Ireland are oil fired.

Warm Homes offers a wide range ofmeasures

4.3 The energy efficiency measures offered bythe Scheme are based largely on thoseoffered by Warm Front in England (Figure6). These were developed with the BuildingResearch Establishment to maximise thereduction in fuel costs and increased warmthfrom the funding then available. Theavailability of oil fired central heating inWarm Homes since its inception, which onlybecame available from Warm Front in2005, reflects the tailoring of the scheme tofit the energy market in Northern Ireland19.

4.4 The wide range of measures availableprovides considerable flexibility to choosethe most effective means of improving

Figure 6: Warm Homes Scheme measures by households, 2007-08

Source: Eaga plc

0 2,000 4,000 6,000 8,000 10,000 12,000

Boiler Replacements and Repairs

Draught Proofing

Reflective Radiator Panels

New oil Heating System

New Gas Heating System

Hot Water Tank Jackets

Cavity Wall Insulation

Loft Insulation

Compact Fluorescent Lamps


20 The Energy Efficiency Levy programme was introduced in 1997. NIE levied a charge per customer, to be used to implementenergy efficiency schemes for domestic customers with the aim of reducing carbon emissions. Since eliminating fuel povertybecame a Government priority, a major proportion of the funds raised have been used for this purpose, includingcontributing to Warm Homes.

21 Are fuel poverty targets out of range? UK fuel poverty monitor fourth year report, National Energy Action 2006.22 Energy Saving Trust (www.energysavingtrust.org.uk).

households' energy efficiency. The Scheme'srules allow the installation of all availablemeasures where they do not exist, subject tothe maximum grant. In cases where the costis greater than the maximum grant, the NIEcontribution is used to bridge the gap. Thiscontribution counts towards NIE's targetsunder the energy efficiency levyprogramme20.

4.5 NIE has contributed £10.8 million to WarmHomes since 2001-02, spending £1.9million in 2006-07 to fund improvements tonearly 1,500 homes. As a result of a reviewof the Energy Efficiency Levy in 2006, theNorthern Ireland Authority for UtilityRegulation has recommended that thiscontribution be phased out over the period2008 to 2010, with NIE spending £1million in 2008-09 and £500,000 in2009-10. If the Scheme is to continue in itscurrent form, the Department will either haveto seek additional funding from WarmHomes' customers or other sources, increaseits own contribution to match the shortfall orinstall fewer measures in fewer homes.

Some eligible households are not wellserved

4.6 Heating systems are restricted to eligibleapplicants over 60 years of age. For themajority of Warm Homes' customers,assistance is limited to insulation measuresonly. This improves the energy efficiency ofthe home and by reducing heat lossprovides additional warmth. More than9,000 households received insulationmeasures in 2007-08. Experience indicates,however, that insulation measures alone are

unlikely to lift a household out of fuelpoverty. It is notable that Warm Front inEngland has offered heating installations toall eligible applicants, not just those over60, since July 2005.

4.7 Households living in 'hard to treat' homesaccounted for 35-40 per cent of the fuelpoor in 200421. 'Hard to treat' homes aretypically older, solid walled properties offthe mains gas network. They may have littleor no loft space. They are most commonlyfound in rural areas. As such, the range ofenergy efficiency measures that can beapplied to them is limited: gas centralheating is unavailable and cavity wall andloft insulation can not be installed.

4.8 Other solutions are limited. Oil fired centralheating is available to qualifying applicants,but on its own is unlikely to raise householdenergy efficiency to an acceptable level.Alternative insulation measures can beinconvenient and expensive. Internal wallcladding projects into the room, reducingthe available living space and typically costs£4,500 for an average semi-detachedhouse22. External cladding of the outsidewalls is similarly costly. Neither treatment isavailable from Warm Homes.

4.9 The Department is committed to exploringrenewable technologies and is engagedwith Eaga in a two year pilot project toinstall solar panels to provide domestic hotwater in 500 homes. While this can reducerunning costs by 30-50 per cent, the initialcosts of installation are high, around£2,700. The costs of such technologies areexpected to fall in the longer term as themarket for renewable energy develops, but



the current resources available for WarmHomes are a barrier to their widespreadadoption. Nevertheless, solutions for 'hard totreat' homes will be necessary if theDepartment is to achieve its targets.

4.10 The Department informed us that it isworking with NIE, through the Fuel PovertyPartnership Fund, to pilot solutions for ‘hard to treat’ homes in rural areas, with£300,000 having been allocated for2008-09 to pilot and evaluate solid wallinsulation in mainly rural areas, as well as arange of renewable technologies23. TheDepartment stated that it would have to beassured of the cost-effectiveness of therenewable technology in the alleviation offuel poverty before it considered its usewithin the Warm Homes Scheme.

23 Renewable technologies include solar photovoltaics (converting solar energy into electricity), solar water heating, biomassboilers and room heaters (typically wood burners).

Some measures have little impact onhousehold energy efficiency

4.11 Warm Homes' measures can make asignificant difference to household energyefficiency. The average improvement inenergy efficiency for households assisted in2005-06 was 20 SAP points and anaverage running cost saving of almost £200per year (Figure 7).

4.12 Households in the lowest SAP bandexperience the biggest increase in energyefficiency after treatment. Warm Homestakes no account of the existing energyefficiency of a household in its eligibilitycriteria. As a consequence, a significantproportion of the households assisted arealready energy efficient. In 2006-07, the

Figure 7: Benefits of the Warm Homes Scheme, 2005-06

Average Average Average Gain Total GainsBefore Work After Work

SAP Results 49.35 69.00 19.65

Carbon Dioxide Emissions 10.61 8.39 2.23 12,205.03(tonnes/year) (21%)

Carbon Savings (Tonnes) 3,328.64

Running Costs (£/year) 877.07 679.14 197.93(22%)

Energy Consumption 122.75 100.12 22.63(GJ/year) (19%)

Source: Eaga plc


Scheme provided help to 3,147 households(31 per cent of the total) with an initial SAPrating above 65 (Figure 8). This is theacceptable level for home energy efficiencyat which a household can be assumed tobe at a minimal risk of fuel poverty.

4.13 The impact of these grants was limited. Theaverage increase in energy efficiency forhomes with an initial SAP rating of 61-70was less than 8 points. At higher initial SAPratings, the average increase was smaller:an initial rating of 81-90 was increased byan average of only 2 points.

4.14 Given that they were already energyefficient, many of these homes with SAPrating over 60 received minimal treatment.In 2006-07, 1,310 households received

compact fluorescent light bulbs only, at acost of around £13,000. This measure hasno impact on the SAP rating and its financialbenefit is less than £40 per year. Draughtproofing measures, without further insulationor heating, were provided to 385households. These can improve comfort inthe home, but they have a minimal impacton SAP and their financial benefit is lessthan £20 per year per household. WarmHomes spent over £300,000 overall ongrants to provide compact fluorescent lightbulbs and draught proofing to homes in2006-07. These grants could have providednearly 800 cavity wall treatments or loftinsulation measures, either of which wouldraise household SAP by up to 5 points.

Figure 8: Analysis of the SAP gains by households treated by Warm Homes, 2006-07

Source: Eaga plc

0%

20%

40%

60%

80%

100%

0

20

40

60

80

100

636(1-10)

455(11-20)

495(21-30)

676(31-40)

1564(41-50)

2242(51-60)

2162(61-70)

1492(71-80)

344(81-90)

17(91-100)

SAP

ener

gyra

ting

for

hous

ehol

ds

Number of households (by SAP bands) treated by Warm Homes

Average SAP before Warm Homes Average SAP after Warm Homes



4.15 Warm Homes spent more than £10 millionin 2006-07 replacing and repairing 2,637existing central heating boilers that were oldand no longer efficient. The impact of thesemeasures, in terms of energy efficiency andfuel poverty, is uncertain. Some householdscan receive significant benefits in warmthand reduced fuel costs if a non-functionalboiler has been repaired or replaced. Otherhouseholds however, where one functionalbut aged appliance has been replaced bya newer, more efficient one, see littlematerial difference in energy efficiency orfuel costs. At an average cost of £3,809the value for money of these measures isquestionable24.

4.16 The benefits of grants to energy efficienthouseholds, and those to provide compactfluorescent light bulbs and draught proofing,are minimal, both in terms of improvedenergy efficiency and eliminating fuelpoverty. The value for money achieved inboiler replacements and repairs is alsoquestionable. Redirecting these grantstowards the installation of higher impactmeasures in homes with lower initial SAPratings would focus help on the most energyinefficient homes which are more likely to bein fuel poverty. The Department told us that itwill examine the feasibility of using SAPratings of households as a tool formeasuring improvements and assessing theeffectiveness of some of the specificmeasures currently available.

24 This cost includes work necessary to the technical specification supplied by NIHE to bring the system in line with existingbuilding regulations.

Part Five:Management of the Warm Homes Scheme



Eaga plc, a leading UK energy efficiencycompany, is the Warm Homes Schememanager

5.1 The Department appointed Eaga partnership(now Eaga plc) as the Warm Homes schememanager on 1st July 2001 on a 3 yearcontract, with the option of 2 two yearextensions. Eaga plc (Eaga) is a leadingorganisation in the management and deliveryof the UK’s grant-funded programmes aimedat tackling fuel poverty. In addition tomanaging the Warm Homes Scheme, it isthe manager and principal contractor on theEnglish Warm Front Scheme and the WelshHome Energy Efficiency Scheme since theycommenced in 2000, and it also ran theWarm Deal Scheme in Scotland until 2006when British Gas took over running thescheme.

Roles and responsibilities

5.2 As the Warm Homes scheme manager, Eagais responsible for overall co-ordination and thefull range of services25 for the Scheme, withthe exception that it does not install themeasures itself. Its Dungannon office, withsome 36 staff, provides a contact centre andthe main administration and technical functionsfor the Scheme throughout Northern Ireland,with its headquarters (in England) providingfinance, contracting and training functions.

5.3 The public’s contact with Warm Homes isthrough Eaga when applying for the scheme,and with the sub-contractors installing theinsulation and heating measures. However,the Department has established a muchwider framework of roles and responsibilitiesto manage the Scheme:

25 Marketing; householder liaison; processing the Scheme’s applications; the appointment, management and monitoring of sub-contractors; the management and disbursement of the Scheme’s funds; carrying out household surveys; commissioninginstallations; inspecting completed installations; and monitoring and delivery against the Department’s targets.

• the Department determines the policy andsets targets for the Scheme; it delegatesoperational activities to the schememanager; and monitors the delivery ofthe Scheme;

• Eaga is responsible under the Contractfor, amongst other things:

- sub-contracting with registeredinstallers for provision of the Scheme’smeasures, ensuring best price andappropriate quality

- meeting a number of service deliverytargets, for example waiting times

- ensuring the standard of the insulationand heating installations; and

• the Northern Ireland Housing Executive,on behalf of the Department, has thedual role of processing payments toEaga and assessing the Scheme’sadministration and quality of provision.

5.4 Achieving value for money depends to asignificant extent on the effectiveness of theDepartment’s monitoring of the provision ofthe Scheme. This part of the report considersthe effectiveness of the arrangements for:

• controlling the costs of the Scheme;

• the timeliness and quality of provision;and

• the extension of Eaga’s period as schememanager and profit sharing under theterms of the Contract.


26 Eaga excluded the lowest 5 per cent and highest 5 per cent of bids from its calculation of the harmonised (average) price.27 Eaga indicated that this cost does not include the client contribution and as such is not directly comparable.

Costs of the Scheme have been increasing

5.5 Spend on the Scheme has increasedannually, from £9 million in the first full year(2002-03) to over £22 million in 2007-08(Figure 1).This is a result of a combination offactors including increasing numbers ofhouseholds being treated, as well asincreases in:

• the price of individual measures; and

• the grant maximum allowed for by theDepartment.

The cost of individual measures has increasedsubstantially

5.6 Eaga, under the provisions of its Contractwith the Department, sub-contracts theinstallation of the Scheme’s measures toinsulation and heating contractors. The sub-contracting process, which is managed atEaga headquarters, initially involvedseparate tendering exercises for suppliesand installation. This changed in November2005, when contracts were let toinstallation contactors on a ‘supply and fit’basis with the installation contractor sourcingthe materials required, and ‘harmonised’prices were set for installations. Harmonisedprices for each measure are based on theaverage of the tender bids26 submitted bycontractors deemed suitable to provide themeasures, and the same fixed harmonisedprice is offered to each qualifyingcontractor.

5.7 The prices for some of the main measuresprovided under the Scheme have increasedsubstantially over the period of the Scheme(Figure 9):

• by 2004, the end of the third year of theScheme, prices had increased by 15-16per cent, double the increase in the RetailPrice Index (RPI); and

• the prices increased further after re-tendering in November 2005; changes inbuilding regulations requirements combinedwith price up-lifts resulted in prices 60 percent to 80 per cent higher at December2007 than at the start of the Scheme in2001, and three to four times more thanthe RPI increase over the same period.

These increases in costs are reflected in theincrease in the overall spend per householdtreated – the average cost per household was£1,130 in 2001-02 rising to £1,890 in2006-07, a 67 per cent increase over theperiod.

5.8 While there are no direct comparisons readilyavailable with GB, the prices of Warm Frontheating installations in England are cheaperthan the Northern Ireland Warm HomesScheme (October 2007 prices):

• new oil heating installations

- average cost in Warm Front is £3,700(includes 5 radiators)27

- cost in Warm Homes is £5,000(includes 7 radiators); and

• new gas heating installations:

- average cost in Warm Front is £2,400(includes 5 radiators)

- cost in Warm Homes is £3,400(includes 7 radiators).



5.9 The Department commented that the increasingcosts of the Warm Homes’ measures werepartly a result of increases in material costs andnew building regulations, but that recentlyagreed modifications to the technicalspecifications for heating installations28 willresult in immediate reduction in costs. Inaddition, it said that it was piloting the use ofqualified technical inspectors to carry outassessments and produce work schedules forthe Warm Homes’ measures to be installed.This was seen as having the potential to beardown on costs and make the quality assuranceprocess simpler and more effective.

28 including smaller oil tanks (600 litres instead of 1,000 litres capacity) with smaller supporting bases; proving asmaller/cheaper ‘cabin pack’ covering for boilers than the current boiler house; and drilling and draining back boilers ratherthan removing them.

The Scheme’s maximum grant has been increased

5.10 Grant limits have been set by the Departmentfor the amount of public funding for measureswhich qualifying households receive under theScheme. These limits changed over the periodof the Scheme:

• the grant maximum for insulation measuresincreased from £750 (July 2001) to £850from December 2006 – an increase of 13per cent; and

Figure 9: Changes in the price of the Scheme’s heating system installations, compared with the 2001baseline1, and the Retail Price Index over the period of the Scheme

Measure 2001 Uplift Uplift Nov. Uplift Uplift Uplift Contract October August 2005 April April December

2003 2004 Re-tender 2006 2007 2007

New oil heating £3,040 £3,290 £3,530 £4,000 - £5,000 £5,390system (8%) (16%) (32%) (64%) (77%)

New oil heating £2,635 £2,845 £3,055 £3,420 - £4,420 £4,765system -from solid (8%) (16%) (30%) (68%) (81%)fuel heating

New gas heating £2,340 £2,525 £2,705 £3,185 £3,400 - £3,665system (8%) (16%) (36%) (45%) (57%)

New gas heating £1,830 £1,975 £2,110 £2,595 £2,805 - £3,025system - from solid (9%) (15%) (42%) (53%) (65%)fuel heating

Year 2001 2002 2003 2004 2005 2006 2007

RPI (all items) – - 1.7% 4.6% 7.7% 10.8% 14.3% 19.2%cumulative (2001 base year)

Note 1 percentage figures indicate the level of price increase compared with the 2001 baseline priceSource: Eaga plc


29 The Department approved the NIHE quality assurance plan for the Warm Homes Scheme in February 2002.

• the grant maximum for heating or heatingand insulation measures under WarmHomes Plus increased from £2,700 (July2001) to £4,300 from December 2006– an increase of 59 per cent.

The comparable increase in the Retail PriceIndex over the period 2001-2006 was 14per cent.

5.11 In the Warm Homes Scheme, if the heatingmeasures required for a household exceedthe grant maximum, the measures will onlybe provided if top-up funds are availablethrough the NIE Energy Efficiency Levy Fund.There is no customer contribution to themeasures received, whereas in England theWarm Front Scheme requires contributionsfrom about 17 per cent of households.

Annual quality assurance reviews haverepeatedly identified areas of low standardsof provision

5.12 As the scheme manager, Eaga isresponsible for the standards of materials,workmanship, service and customer

satisfaction provided by the Scheme. It isrequired to inspect 5 per cent of insulationinstallations and 100 per cent of heatinginstallations, and having remedial workcarried out where necessary, prior toclaiming payment from NIHE.

5.13 In addition to Eaga’s quality assurances,NIHE carries out annual assessments andreports on the Scheme’s performance29. Its‘quality assurance monitor’ reports include,amongst other things, an assessment of thetimeliness and quality of completedinstallations. NIHE quality assurance iscompleted following Eaga’s qualityassessment work and the payment of thesub-contractor.

5.14 Timeliness of installations is measured but thefigures require interpretation. While NIHEfound a high level of compliance with thefive working day target for acknowledgingreceipt of enquiries and applications inrecent years, it regularly reported low levelsof attainment of the target times for thehousehold energy efficiency survey andcompletion of the installations (Figure 10).

Figure 10: NIHE’s assessment of Eaga’s performance against timeliness targets

Timeliness Targets1 % of Cases Achieving the Target(from receipt of a referral (an application)) 2004-05 2005-062

31 working days to complete the energy efficiency survey and 26% 34%check the householder’s eligibility

81 working days to complete an insulation installation 14% 53%

126 working days to complete a heating installation 17% 31%

Note: 1 These targets applied from September 2004, prior to this the targets were 28 working days to carry out a survey; 40 working days to complete insulation installation; and 90 working days to complete heating installations.

2 2005-06 are the latest available figures. Source: NIHE



However, it noted a range of outsideinfluences affecting this performance, forexample, delays awaiting landlordpermission and benefit entitlement checks;delays caused by the applicants (clearinglofts or the householder requesting a delayin installation); and, on some occasions, thelarge volume of applicants resulting frommail shots advertising the Scheme. Eagastated that the major cause of delays infitting heating systems had been due to over-subscription of the Warm Homes Pluselement of the Scheme. Eaga also informedus that, from September 2006, it wasmonitoring performance against thetimeliness targets more closely, and that inthe Warm Front Scheme in Englandtimeliness is assessed from the date of thehousehold survey whereas for the WarmHomes Scheme it is measured from the dateof registration.

30 Eaga considers that a commitment to provide the Warm Homes Scheme’s measures arise when its energy efficiency surveyand eligibility checks are complete.

5.15 Timeliness is a key aspect of serviceprovision, and clearly the length of thewaiting list will impact on this:

• at March 2008, Eaga had 6,550referrals for heating systems (5,807referrals awaiting household surveys and743 referrals surveyed and ready to beallocated to sub-contractors)30. Thebacklog would, at that point, be theequivalent of a two year waiting list forheating systems, given no change in theexisting funding. This was despite Eaganot actively promoting Warm Homes Plusin 2007; and

• there are a substantial number ofcancellations from the waiting list, some1,300 in 2007-08 (Figure 11). Whilemost of the cancellations are at theclient’s request, some are due to thedelay in commencing the installations.

Figure 11: There are substantial numbers of cancellations from the waiting list, 2007-08

Source: Eaga plc

Cancellationby

householder368 (57%)

No contactwith householder

76 (12%)

Installationdone

privately28 (4%)

Householdermoved/

deceased52 (8%)

Householdernot satisfied/installation

not practical120 (18%)

Householderunwell8 (1%)

Householdermoved/

deceased41 (6%)

Installationdone

privately10 (2%)

Cancellationby householder

463 (72%)

No contactwith

householder30 (5%)

Householdernot satisfied/installation

not practical84 (13%)

Householderunwell

14 (2%)

Insulation Heating Systems


5.16 Quality of insulation installations hasimproved year on year, with NIHE satisfiedthat Eaga had met its obligations under theScheme in almost all cases in 2004-05 and2005-06 with a pass rate of 85 per centand 92 per cent of inspected installationsrespectively (Figure 12). NIHE noted thatthe majority of problems in the installations itfailed replicated defects it had outlined inprevious reports, for example, loft insulationincomplete or poorly installed, and draughtproofing being omitted.

5.17 Quality of heating installations has beenimproving over the period of the Scheme(Figure 13). NIHE has repeatedly found lowlevels of ‘pass’ and ‘conditional pass’ cases(the latter requiring minor remedial work),and assuming that the remedial work is

completed it combined the 2 types ofpasses and reported annual overall ‘passrates’ ranging from 15 per cent to 64 percent. It reported that the markedimprovement in performance since 2004-05was due to excluding cases from theanalysis where agreement could not bereached with Eaga over ambiguities in thetechnical specification.

5.18 NIHE, in its 2005-06 report, noted that themain reason for failing to meet the qualitystandard was the standard of themechanical installations and that mostdefects were similar to those identified andreported on in previous reports. Forexample, pipework did not meet therequired specification, and systems were notcommissioned to ensure that they operated

Figure 12: NIHE assessment of the quality of installation of the Scheme’s insulation

Note: 1 2005-06 are the latest available figures; 2 installations requiring minor remedial work are classed as conditional passes.

Source: NIHE

0 5

1.0

1.5

2.0

2.5

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2001-02 2002-03 2003-04 2004-05 2005-06

Fail Conditional Pass Pass

Ass

essm

ent%

2

1



correctly. It acknowledged that some defectsare of a minor nature, relating to goodpractice, but others relate to the efficientworking of the system or health and safetyissues. It has also stated31 that .... “Weknow that Eaga think that we apply undulystrict standards to our assessment of heatinginstallations but we can only report on whatwe find and where we feel installationscould be improved.”

5.19 Eaga informed us that, while NIHE’sassessments have helped drive up thequality of installations, it considered that inrecent years the deficiencies raised wereminor in nature and questioned whether theyalways fell within the scope of the worksspecification. It also informed us that it tookassurances from the findings of an externalconsultant it engaged to review the quality

31 Covering letter to the Department on its 2004-05 ‘quality assurance monitor’ report.

of its heating installations; and that theDepartment had never approached it on theNIHE findings.

5.20 The Department informed us that the qualityof installations was an agenda item at its bi-monthly Warm Homes Scheme progressmeetings. However, the complexity of theinstallation specification, particularly inrelation to oil heating system upgrades, hadmade an agreed approach to qualityassurance difficult to achieve and manage.While it noted that quality assurance levelshave generally been increasing over thecontract period, it has commenced a pilotexercise aimed at providing installers withspecific work schedules which it considersshould improve the quality assuranceprocess (paragraph 5.9).

Figure 13: NIHE’s assessment of the quality of the Scheme’s heating installations

Notes: 1 2005-06 are the latest available figures; 2 installations requiring minor remedial work are classed as conditional passes.

Source: NIHE

0 5

1.0

1.5

2.0

2.5

0%

20%

40%

60%

80%

100%

2001-02 2002-03 2003-04 2004-05 2005-06

Fail Conditional Pass Pass

Ass

essm

ent%

2

1


The Department has extended Eaga’scontract

5. 21The Department has on two occasionsextended Eaga’s term as scheme managerby two years, for the periods July 2004 toJune 2006 and July 2006 to 30 June2008, the maximum allowed under theContract. The extensions were entered intoagainst the background of the Scheme’sinsulation and heating installations fallingshort of the specified standards (paragraphs5.16 and 5.17). The Department iscurrently reviewing the Warm HomesScheme and plans to have a draft schemedocument ready by July 2008 (paragraph2.9) which will be the basis for consultationon a revised scheme. However, theDepartment told us that procurement of anew scheme manager will commence on thebasis of the draft scheme document. As aninterim measure, until a new schememanager is appointed, the Department hasentered into short-term arrangement with

Eaga plc to extend its role and reponsibilityfor providing the scheme beyond 30 June2008.

The Contract provides for the recovery of excessprofits

5.22 The current contract includes the provision,amongst others, that if Eaga’s profits exceed15 per cent of the contract value, 40 percent of the excess must be paid to theDepartment. In order to facilitate monitoringof this condition, Eaga should provideindependently audited annual accounts forthe Department’s scrutiny. The Departmenthas not received these accounts, and it hasno way of identifying whether Eaga's profitsmerit invoking the profit sharing agreement.

5.23 The Department informed us that it has nowasked Eaga for updated audited accountsand is seeking expert advice to check anyentitlement it may have to execute the profitsharing clauses in the contract.

Appendices

Appendix One:(paragraph 1.7)


Grantmaximum

Eligibility

Measurescovered

Warm HomesSchemeNorthern Ireland

£850 for insulation,or £4300 forheating andinsulation measures.

Anyone with a childunder 16 in receiptof certain benefits(insulation measuresonly).Anyone over 60 inreceipt of certainbenefits (bothheating andinsulation measures).Anyone in receipt ofcertain disabilityrelated benefits(insulation only).

Insulation measuresonly unless you areover 60, in whichcase both heating andinsulation. Includesreflective radiatorpanels for homes withsolid walls. Alsoenergy efficient lightbulbs.

Warm Deal SchemeScotland1

£500, or £125 forover 60s notreceiving benefits.Included socialhousing and counciltenants until recently.

Households withdisabled childrenand receivingDisability LivingAllowance, andhouseholders agedover 60 andreceiving certainbenefits, are eligiblefor a £500 grant.Over 60s who donot receive benefitsare eligible for amaximum of £125.

Only insulationmeasures- cavitywall, loft, hot watertank and draughtproofing. Alsoenergy efficient lightbulbs.

Home EnergyEfficiency SchemeWales

£2000, or £3600 ifdisabled or over 60.£5000 for oilheating.

All over 80s qualifyfor the full £3600.Over 60s and loneparent familiesqualify for £3600 ifthey are in receipt ofcertain benefits.Householders whoare pregnant orhave a child under16 and arereceiving certainbenefits qualify forthe £2000 grant. Allover 60s can claima £500 rebate.

Heating and/orinsulation measuresand energy efficientlight bulbs. Alsosecurity measures andsmoke alarms. Nosolid wall insulationor double glazing.

Warm FrontSchemeEngland

£2700 for heatingand insulation, or£4000 if oil centralheating isrecommended.

Householders agedover 60, orpregnant/ with achild under 16, ifreceiving one ormore of IncomeSupport, Council TaxBenefit, HousingBenefit, Job SeekersAllowances, orPension Credit. Orhouseholders of anyage in receipt ofany disabilitybenefit. Any over 60can apply for a£300 rebate if theyhave no centralheating.

Heating and/orinsulation measuresand energy efficientlight bulbs up togrant maximum.Solid wall insulationand double glazingare not listed.

Comparisons of Fuel Poverty Schemes in the UK

Note: 1 The Warm Deal Scheme is the only scheme that covers public and private housing, the rest cover private housing only; in Scotlandthere is a separate Central Heating Programme.

Appendix Two:(paragraph 3.23)


30 £300,000 from NIE and the Department for installing heating and other energy efficiency measures. Research fundingwas provided by NIHE, Southern Health and Social Services Board, the Department and Eaga Partnership (now Eagaplc).

31 Fuel Poverty Index range of indicators - low uptake of grants for domestic energy efficiency improvements; high proportionof owner-occupied/private rented sector housing; low income/high benefits dependency; high relative multipledeprivation indices; high percentage of over 60 year olds and of under 5 year olds; and population density (ruralcommunities).

A summary of Transforming Lives: LessonsLearned and Shared ‘Home is Where theHeat is’ A Rural Fuel Poverty and HealthProject, Armagh and Dungannon HealthAction Zone, 2002

The project sought to identify and address some ofthe issues affecting both individual and communityhealth and quality of life. Its aim was … “througha community partnership approach, to developand deliver an innovative, research-focused andaction-based approach to tackling fuel poverty,energy efficiency and health and wellbeing in therural communities of Armagh and Dungannon”.

The project consisted of three phases:

• pre-intervention research into the fuel poverty,energy efficiency and health status ofhouseholders. In order to target resources30 inareas of greatest need the team:

- designed a ‘Fuel Poverty Index’ (consistingof a range of indicators31) as a tool toidentify ‘cool spots’, geographical areaswhere there are high levels of fuel povertyand low income levels

- developed a community self-selectionprocess to determine the commitment or‘buy-in’ within the fuel poor wards identifiedby the Fuel Poverty Index – this resulted inthe work being undertaken in Aughnacloyand Darkley

- designed a Property and Householders’Survey to, amongst other things, identifythose most in need of the measures. Consentto access personal records, including healthrecords and fuel bills, was very high;

• installed a range of energy efficiency measures.It decided, in consultation with the communities,that resources would be prioritised to providefuel poor households with maximum assistancethrough ‘total solutions’ packages, i.e. heating,energy efficiency measures and appliances;and

• measuring the long-term impact of theinterventions on health and wellbeing.

Among the achievements claimed by the projectwere:

• 92 per cent response rate to the Property andHouseholder Survey – 409 out of 436households targeted;

• successful targeting the fuel poor, demonstratedby a 100 per cent up-take by those referred foroil-fired heating systems and energy efficiencymeasures; and

• the project assisted in identifying unmeet need– almost 40 per cent of the recipients ofheating systems were aged less than 60 yearsof age which would have deemed themineligible for heating systems under the WarmHomes Scheme.


Printed in the UK for the Stationery Office on behalf of the Northern Ireland Audit OfficePC2288 06/07

Title HC/NIA No. Date Published

2007

Internal Fraud in Ordnance Survey of Northern Ireland HC 187 15 March 2007

The Upgrade of the Belfast to Bangor Railway Line HC 343 22 March 2007

Absenteeism in Northern Ireland Councils 2005-06 - 30 March 2007

Outpatients: Missed Appointments and Cancelled Clinics HC 404 19 April 2007

Good Governance – Effective Relationships between HC 469 4 May 2007Departments and their Arms Length Bodies

Job Evaluation in the Education and Library Boards NIA 60 29 June 2007

The Exercise by Local Government Auditors of their Functions - 29 June 2007

Financial Auditing and Reporting: 2003-04 and 2004-05 NIA 66 6 July 2007

Financial Auditing and Reporting: 2005-06 NIA 65 6 July 2007

Northern Ireland’s Road Safety Strategy NIA 1 4 September 2007

Transfer of Surplus Land in the PFI Education NIA 21/07-08 11 September 2007Pathfinder Projects

Older People and Domiciliary Care NIA 45/07-08 31 October 2007

2008

Social Security Benefit Fraud and Error NIA 73/07-08 23 January 2008

Absenteeism in Northern Ireland Councils 2006-07 30 January 2008

Electronic Service Delivery within NI Government Departments NIA 97/07-08 5 March 2008

Northern Ireland Tourist Board – Contract to Manage the NIA 113/07-08 28 March 2008Trading Activities of Rural Cottage Holidays Limited

Hospitality Association of Northern Ireland: A Case Study NIA 117/07-08 15 April 2008in Financial Management and the Public Appointment Process

Transforming Emergency Care in Northern Ireland NIA 126/07-08 23 April 2008

Management of Sickness Absence in the Northern NIA 132/07-08 22 May 2008Ireland Civil Service

The Exercise by Local Government Auditors of their Functions 12 June 2008

Transforming Land Registers: The LandWeb Project NIA 168/07-08 18 June 2008

List of Reports

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Warm Homes: Tackling fuel poverty - Northern Ireland Audit