Fuel Poverty Strategy published

25 February 2021

On 11 February 2021, the government published an updated fuel poverty strategy, entitled Sustainable Warmth – Protecting Vulnerable Households in England. The new strategy is important to housing associations, both in relation to tenant support and the journey towards achieving net zero carbon housing stock. Government statistics suggest that 15% of fuel poor households in England live in social housing. 

The strategy includes a new indicator of fuel poverty, replacing the Low Income High Costs (LIHC) definition with Low Income Low Energy Efficiency (LILEE). This definition will allow energy efficiency improvements made to homes to be better reflected in the way fuel poverty is measured. The updated measure, Low Income Low Energy Efficiency (LILEE), finds a household to be fuel-poor if it: 

  • has a residual income below the poverty line (after accounting for required fuel costs), and 
  • has an energy efficiency rating below Band C.

The strategy sets out principles to guide government policy on tackling fuel poverty: 

  • prioritise the least efficient homes 
  • adopt a cost effective approach
  • consider how best to support vulnerable households
  • join up fuel poverty policies with wider government priorities (such as achieving net zero carbon emissions by 2050).

Targets to alleviate households from fuel poverty are recommended  ‘as far as reasonably practical’. The government states that ‘when considering which homes should be retrofitted based on the fuel poverty target, the fuel poverty strategy considers several factors, including the physical characteristics of the property and the preferences of the householders’. For example, the strategy makes clear that in some cases it may not be feasible to retrofit a particular property due the design of the building. Or some households may have no appetite for retrofitting. 

In addition to work towards homes being EPC Band C by 2030, the government have laid down interim milestones (contained in the 2015 fuel poverty strategy): 

  • As many fuel-poor homes as is reasonably practicable to Band E by 2020
  • As many fuel-poor homes as is reasonably practicable to Band D by 2025.

Key actions contained in the strategy (some of which have already been announced) include:

  • Investment of £60m to retrofit social housing, and £150m invested in the Home Upgrade Grant
  • A review of the Decent Homes Standard
  • Expand the Energy Company Obligation (ECO) – a requirement for larger domestic energy suppliers to install heating, insulation or other energy efficiency measures in the homes of people who are low income and vulnerable or fuel poor

Invest in energy efficiency of households through the £2bn Green Homes Grant, with a renewed focus on low income households to install energy efficient and low carbon heating measures in their homes.

This information has been updated since this page was first published on 16 February 2021.