The Welsh Government has not met its targets for the eradication of fuel poverty though its actions do seem to have contributed to a reduction. That’s one of the main messages of a report, published by the Auditor General for Wales.

The report shows that the number of households estimated to be in fuel poverty has fallen by over a half in ten years - from 332,000 in 2008 to 155,000 in 2018. But the Welsh Government set itself ambitious targets – to eradicate fuel poverty among all vulnerable groups by 2010, in social housing by 2012 and in the general population by 2018. These targets have not been met.

Tackling fuel poverty is complex with the causes and responses spanning organisational boundaries. The Welsh Government’s targets were highly ambitious given that some key causes, such as household income and the cost of energy, lie partly or entirely outside its control.

The Welsh Government has spent £249 million, which includes some EU funds, on its Warm Homes programme to reduce fuel poverty, mainly through improving home energy efficiency - but also by providing advice to people on issues like maximising income and saving energy. But exactly how much this has contributed to the reduction is unclear and fuel poverty remains a problem for a significant number of people.  In 2018, those estimated to be in fuel poverty in were: 12% of all households in Wales (155,000); 11% of vulnerable households (130,000); 9% of all households in social housing (21,000). An estimated 32,000 households (2% of all households) were in severe fuel poverty, 19,000 of which were vulnerable households.

The report found as part of its efforts to develop a more holistic approach to tackling poverty, the Welsh Government has sought to work with other bodies and has coordinated its own departments to address the wider causes of fuel poverty. This includes investing in wider programmes, such as work to achieve the Welsh Housing Quality Standard across social housing.

However, there are some inherent tensions between different policy aims. The report highlights tensions between trying to eradicate carbon emissions from domestic housing and prioritising efforts and funding on fuel poor households who tend to use less energy and may indeed need to increase their energy use in order not to live in a cold, unhealthy home.

The report makes recommendations for the Welsh Government to consider as it consults on and finalises a new fuel poverty plan, including:

• learning lessons learnt from the failure to meet the current targets set in 2010 when deciding on any new ambitions.
• linking fuel poverty schemes with other work to tackle the underlying causes of fuel poverty.
• considering how fuel poverty schemes could prevent costs in other service areas and contribute to wider policy goals when setting future programme budgets.

Auditor General, Adrian Crompton said:

“Living in a cold, damp home impacts on people’s mental and physical well-being and dealing with the consequences of fuel poverty increases other public spending, for example in the NHS. So it is good to see that Welsh Government investment has helped to improve the energy efficiency of people’s homes and seems to be part of the story of reducing fuel poverty rates. But, given it has not met its own targets to eradicate fuel poverty, there are lessons for the Welsh Government to learn as it considers its future ambitions and role.”

Notes to Editors:

• This report is an initial high-level overview of the Welsh Government’s existing ambitions for fuel poverty and progress to date. The aim of our work is to provide some insight into efforts since the publication of the Welsh Government’s 2010 Fuel Poverty Strategy.
• The Welsh Government defines fuel poverty as ‘living on a lower income in a home which cannot be kept warm at reasonable cost’. It has adopted the following two measures to assess rates of fuel poverty:
  • If a household needs to spend more than 10% of its income to keep warm, it is in fuel poverty.
  • If a household needs to spend more than 20% of its income, it is in severe fuel poverty.
• The report is being published in advance of a Welsh Government consultation on a new fuel poverty plan. The Welsh Government intends to launch a public consultation in October 2019 and to publish a new Fuel Poverty Plan in February 2020.
• At this stage, we have not looked in depth at the value for money of the two main home energy efficiency schemes – ‘Nest’ and ‘Arbed’. However, we are considering further work to look at these schemes soon. An Assembly Member has written to the Auditor General outlining specific concerns about the Arbed scheme.
• The Auditor General is the independent statutory external auditor of the devolved Welsh public sector. He is responsible for the annual audit of the majority of the public money spent in Wales, including the £15 billion of funds that are voted on annually by the National Assembly. Elements of this funding are passed by the Welsh Government to the NHS in Wales (over £7 billion) and to local government (over £4 billion).
• The audit independence of the Auditor General is of paramount importance. He is appointed by the Queen, and his audit work is not subject to direction or control by the National Assembly or government. 
• The Wales Audit Office (WAO) is a corporate body consisting of a nine-member statutory Board which employs staff and provides other resources to the Auditor General, who is also the Board’s Chief Executive and Accounting Officer. The Board monitors and advises the Auditor General, regarding the exercise of his functions.