The Open Data Institute has today published a new Fuel poverty and data infrastructure report, along with a fuel poverty risk index, which shows the state of fuel poverty around England and allows you to see detailed analysis at a district level. This guide seeks to explain the reasons behind the creation of this new index, and how civil servants, as well as charities and others helping those in fuel poverty, might use it in their work. The fuel poverty risk index demonstrates the value of data infrastructure to help understand the scale and depth of fuel poverty across England and allows data to be compared nationally and at local authority level. The report follows on from the ODI’s report on food poverty, published in October 2022, which also identified gaps in the existing data and proposed that developing a single food poverty metric could improve our understanding of the problem.
What is fuel poverty?
Fuel poverty is the condition in which a household is unable to afford to heat (or cool) their home to an adequate temperature. There are three primary drivers of fuel poverty:
- Income: Households living on a low income are more likely to experience financial difficulties when trying to meet the costs of paying for fuel.
- Unit costs of fuel: All else being equal, more expensive energy prices (including gas, electricity and heating oil) will lead to a greater number of households struggling to heat their homes.
- Household energy consumption: Households living in energy-inefficient properties will have to use more energy on average to keep their homes at an adequate temperature. This higher-than-average consumption may lead to fuel poverty in some cases (depending on that household’s income and the cost of fuel at the time).
The ODI's Fuel poverty and data infrastructure report and its accompanying fuel poverty risk index shine a spotlight onto this issue. In putting together this report, we have drawn on sixteen datasets from 12 separate sources to create the most accurate picture of fuel poverty across England today and illustrate the need for effective data infrastructure to support the efficient targeting of help from energy companies, government and charities.
Why fuel poverty matters
The findings of the ODI’s research place fuel poverty in the realm of a public health emergency. The report shows those areas of the country where energy use is high, poverty and ill health commonplace, and where there is a lack of mitigating energy efficiency measures in place. It indicates that the better use of data could help planning for surges in demand on the NHS, a view which is endorsed by the End Fuel Poverty Coalition.
Access to a safe and warm home is an essential precondition for living a healthy life. Recent analysis has concluded that housing defects that expose residents to excess cold lead to negative health impacts for those residents and, in turn, create annual NHS treatment costs estimated at over £850m. Health impacts of cold homes include increased risks of heart attack, respiratory illnesses, poor diet due to "heat or eat" choices, mental health issues, and worsening existing conditions. These impacts emphasise the importance of having a fuel poverty data infrastructure capable of incorporating a wide suite of metrics from multiple sectors, domains and public services
"The energy price guarantee will temporarily fix rates for domestic customers, but a typical household will still face energy costs of more than twice the level seen in 2021, and many more households will struggle to heat their homes"
How data infrastructure can help
The deployment of an effective data infrastructure around fuel poverty will help to identify those in most need in a systematic way. It could also highlight the longer-term benefits associated with adequate investment in efforts to tackle fuel poverty. Keeping the data up to date will aid timely decision making, supporting policymakers to decide which groups to target when offering support and to assess how much investment in fuel poverty support is optimal given short and long-term impacts.
This is particularly relevant to discussions about how best to provide support for households on energy bills in the context of the ongoing cost of living crisis. The government’s recent energy price guarantee will temporarily fix rates for domestic customers, but a typical household will still face energy costs of more than twice the level seen in 2021, and so many more households will struggle to heat their homes this year relative to the recent past.
Who is at risk?
The fuel poverty risk index and the ODI’s data analysis in Fuel poverty and data infrastructure produced some surprising results. The data suggested outsized impacts on certain groups, showing that fuel poverty impacts:
- 30.6% of households using prepay electricity meters
- 28.8% of households where the eldest occupant is 16-24 years old
- 27% of homes housing five or more people
- 26.5% of lone parents
- 25% of all privately rented households
- 20.4% of households with children aged 0-4 years
- 17.7% of couples with children
- 13.2% of all English households (3.16 million households)
Private renters are particularly vulnerable to fuel poverty, because neither they nor their landlords have enough incentive to improve the energy efficiency of their homes. Most landlords do not get the benefit of lower bills, while tenants eligible for grants have no guarantee that they can stay in their home for the long term, weakening the incentives on both groups to take action.
3.16 million
English households
30.6%
of households using prepay electricity meters
26.5%
of lone parents
are impacted by fuel poverty
Where is fuel poverty more prevalent?
The index shows that the West Midlands and Yorkshire and the Humber contain the highest proportion of households in fuel poverty (17.8% and 17.5% respectively), whereas London and the south of England have lower than average rates (all below 12%). Households in Blackpool have the highest potential for fuel poverty, based on its index. Incomes in Blackpool are 27% below English average, and the area has an above-average proportion of the population in receipt of Universal Credit (15% in Blackpool versus 8% nationally). In addition, 73% of dwellings in Blackpool are classed as energy inefficient (below EPC Band C), which is above the national average of 58%.
What next?
The ODI’s fuel poverty index will be updated annually. We hope that this will support efforts to trace the impact of government intervention and payment schemes over time, and the effect of fluctuating fuel prices on different groups in society.
Future iterations may be based upon a wider set of indicators, including data from a more diverse range of organisations and individuals, including charities and community-based organisations that provide services locally or across the country to help households experiencing fuel poverty. They could also include details of the impact of fuel costs on non-domestic energy customers.
The ODI believes that in order for our fuel poverty risk index to continue to develop and add value in the future, the government could consider whether publication of data on fuel poverty prevalence, drivers and impacts could be done on a more timely basis. In addition, there may be value in greater coordination across the constituent nations of the UK to make a consistent set of indicators available.
Matt Davies is a senior policy adviser for the Open Data Institute