Fuel Poverty Strategy and health

16 July 2013

The Hills Review

• Independent review commissioned in March 2011 from Professor John Hills of the London School of Economics

• Key questions considered:

– Is fuel poverty a distinct issue? Yes– Whether the current definition is

correct? No– How fuel poverty should be

measured? Low income households facing high energy costs

• Final report to Government to March 2012

• Independent review commissioned in March 2011 from Professor John Hills of the London School of Economics

• Key questions considered:

– Is fuel poverty a distinct issue? Yes– Whether the current definition is

correct? No– How fuel poverty should be

measured? Low income households facing high energy costs

• Final report to Government to March 2012

The Hills Review

Professor Hills recommended adopting the Low Income High Costs (LIHC) approach. Where a household is fuel poor where:

- It has an after housing costs income below the poverty line (after adjusting for energy costs)

- It faces above average (modelled) energy costs

The LIHC approach provides twin indicators that show the extent and depth of fuel poverty.

The Hills Review: the LIHC definition

Beyond Hills: a new strategic framework

September 2012: consultation on a proposal to adopt a new definition based on the recommendations of the Hills review

July 2013: formal response to the consultation and publication of a new strategic framework (‘Fuel Poverty: a Framework for Future Action’), which sets out how we will use the new definition to shape future policies.

Who should we prioritise for support? How should we support those households?

Using the new indicator to shape policies?

The LIHC indicator doesn’t reflect the fact that certain households are vulnerable to the impacts of fuel poverty. The strongest evidence on vulnerability relates to the health impacts of living at low temperatures and in poorly insulated dwellings. There is compelling evidence that the drivers of fuel poverty are strongly linked to living in low temperatures.

The Marmot Review Team provided a comprehensive overview of the evidence linking fuel poverty related factors to poor physical and mental health as well as the effect of interventions to mitigate them.

The Hills Review also provides a comprehensive summary of the literature.

How do we take account of vulnerability?

Quantifying the health impacts of fuel poverty

Cold-related morbidity and mortality

Complex interactions, but persuasive evidence linking low temperatures with a range of health impacts from minor infections to serious respiratory and cardiovascular conditions in particular that can prove fatal. Three main ‘at risk’ groups:

- Elderly people- Very young children- People with a long-term sickness or

disability

Evidence less clear cut on the link between cold indoor temperature and mortality

Quantifying health impacts

Source: HI-DEEM model

Being able to quantify and monetise the health impacts of fuel poverty will allows us to explicitly recognise vulnerability in decisions around prioritisation and policy choices.

• Prioritisation of the households that are suffering from the most severe problem: the new indicator helps us to understand the factors that are important in driving fuel poverty (and severe fuel poverty) and to identify a set of risk factors that will help us to prioritise support to those households that are suffering from the most severe problem

• Supporting priority households through cost-effective policies: the analysis set out in the strategic framework document helps us understand where there is cost effective potential to support fuel poor households and also the trade-offs that may result if we prioritise supporting more ‘hard to treat’ households.

• Ensuring that vulnerability is reflected in fuel poverty policies: this means that we will continue to prioritise vulnerable fuel poor households – i.e. those households containing older people, children or long-term sick or disabled people – for support under fuel poverty policies.

Guiding principles of future policy development