Policy paper

CFP response to the Review of the Fuel Poverty Strategy consultation

Published 3 April 2025

Applies to England

The Committee on Fuel Poverty (the Committee) is an advisory Non-Departmental Public Body sponsored by the Department for Energy Security and Net Zero (DESNZ). The Committee advises on the effectiveness of policies aimed at reducing fuel poverty and encourages greater co-ordination across the organisations working to reduce fuel poverty.

The Committee on Fuel Poverty welcomes the Review, something we called for in our 2024 Annual Report. We share the government’s concern about the flatlining of numbers in fuel poverty; and we recognise that the government links the fuel poverty strategy to a goal of achieving growth, and new jobs across the UK.

If that growth strategy means a determination to ramp up the volume of cold homes occupied by lower income households treated over the coming five years, the Committee would welcome that ambition.

In addition to the Committee’s specific response to the consultation questions, we would draw attention to the following CFP submissions and reports, which are relevant to an updated Fuel Poverty Strategy:

• OFGEM consultation on Consumer Vulnerability Strategy Refresh 2024: CFP response
• the Barriers and Enablers to supporting fuel poor households achieve Net Zero - CFP research report August 2024
• “Can Fuel Poverty Be Ended?” the Committee on Fuel Poverty Annual Report 2024
• OFGEM affordability and debt call for input 2024 - CFP response
• Standing Charges: CFP response to OFGEM call for input
• OFGEM consultation on Additional debt-related costs allowance - CFP response
• “Meeting or Missing the Milestones” The Committee on Fuel Poverty Annual Report 2023
• Understanding the challenges faced by fuel poor households – CFP research report May 2023
• Ofgem’s Call for Evidence on Prepayment Rules and Protections - CFP response

Comments on questions

1. Should the 2030 fuel poverty target be retained?

2. What are your views on an alternative fuel poverty target objective and what this objective should be?

3. What are your views on the objective date? We welcome views on the target date for the current 2030 objective and any objective date for any alternative target which could replace or succeed the 2030 target.

The Committee believes the 2030 target is valuable – if only because it focuses government efforts on a timeline that is closer to the practical political horizon for policy making.

If government were to replace this measure with a target in 2040, every current and many future Ministers would know they may be long gone before the target end dates come into view.

However, we would qualify the target to make it more specific and remove the “reasonably practicable” condition – see Q10.

Implicit in the Committee’s Annual Report is that fuel poverty will not be ended simply because most if not all low-income households find themselves in homes that are C rated. There is a wider problem of affordability that goes beyond simply households living in C rated homes.

We support a complimentary target – the 10% rule or similar – to progressively reduce the numbers of households below a certain income band, whose energy bills exceed more than 10% of disposable income after housing costs.

It may make sense to have a 2035 target which builds on the progress of the achievement of the 2030 target - which might be a “energy distress target”.  This might set a 2035 deadline to reduce the number of below average income households who face unaffordable bills.

A new target definition could helpfully identify those households struggling with energy costs, potentially including those most at risk groups. This would have in its sights the remaining households of the 8.9million who exceed the 10% rule.

4. What are your views on: 

a. retaining the Low-Income Low Energy Efficiency metric as a measure of structural fuel poverty and as the official measure of progress to the statutory fuel poverty target in England?
b. whether to adopt an additional indicator to monitor the impact of energy prices on the affordability of energy?
c. the form of an energy affordability indicator, including whether this should include an income constraint and considerations on the basis on which to determine unaffordable energy requirements?  Please provide any supporting evidence.  

The Committee believes that the Low Income, Low Energy Efficiency (LILEE) metric should be reviewed as it no longer captures the full range of households facing unaffordable bills. The LILEE metric is a valuable measure for a different purpose – achieving targets for delivery of energy efficiency schemes to alleviate fuel poverty by focussing them on worst first houses. But that as a measure of fuel poverty it is deficient because of reasons like assuming once in a C home you cannot be in fuel poverty, lack of response to wildly changing fuel prices (which are a relatively new phenomenon not envisaged when LILEE was implemented). So, for looking at levels of fuel poverty a 10% metric or similar is more appropriate, and basic income threshold.

It may be sensible to add a basic income threshold, such as households with below median household incomes. The Review suggests that an appropriate income threshold is 60% below median household income. In our view, that appears too restrictive and would exclude many households who face a genuine and ongoing affordability problem.

5. What are your views on adapting or implementing the Worst First principle, in order to maximise the number of fuel poor homes brought to Band C while ensuring that the worst homes are not left behind? Please provide any supporting evidence.  

The Committee believes the starting point of any fuel poverty strategy is to end the spectre of cold homes.  It is extraordinary that of two neighbours in superficially similar homes, one might have bills twice that of the other because one home is EPC E-rated and the other has been insulated to reach a C-rating.

The resources employed per household to reduce energy usage has been a major constraint on progress.

Going forward, the Committee favour a “fabric first” approach.  Aligned with that, we welcome a “worst first” approach for social justice reasons, i.e. the energy consumption of a G property is a more urgent need to resolve than a D rated property.

The Committee noted in our 2024 Annual Report that “between 2022 and 2024, the shift away from fabric first delivery… to [installing] better monitoring equipment and heating controls may be cheaper ways of treating more properties to encourage reduced energy consumption, but were ineffective at delivering substantially warmer homes”

We would want future ECO programmes to focus on “fabric first”.

However, it is important to be clear what we mean by “fabric first”. In the Committee’s view, the most efficient approach to warm homes is to ensure that the building – walls, cavities, floor and roof spaces and windows – have very high insulation, heat retention standards.

This must be the first order consideration – ahead of any discussion on the most efficient heating system, low carbon or not.  Clean heat is desirable for net zero reasons, but does not, of itself, make a huge contribution to lowering energy bills and tackling fuel poverty.

We would therefore want to see a clear separation of a modernised heating system, including heat pumps, from the basic objective that each property must first be well wrapped up.

Heat pumps may be a desirable medium-term option for many properties, but they cannot be done ahead of efficient work to insulate a home’s structure; and should not be competing for the same pots of funding.

6. What are your views on how we could better define or implement the cost effectiveness principle? Please provide any supporting evidence. 

This is a difficult challenge.  It may be that some properties – such as traditional solid wall homes, exposed rural cottages, farmhouses etc, require sums of £20,000+ to deliver a major upgrade to a C or above.

The evidence suggests that around 10% of properties could not be feasibly upgraded within a £20,000 budget per property, and therefore, we support a cost limit for value for money reasons. 

For sums lower than £20,000 to achieve a C rating, we regard a demonstrated payback through lower bills over a 12-15 year period still represents value for money, even if it is a horizon beyond the occupancy of those who lived in the property when the work was undertaken.

7. What are your views on how we could better define or implement the vulnerability principle? Please provide any supporting evidence. Responses could include views on:

- How to better incorporate consideration of health inequalities and vulnerabilities into fuel poverty policies
- How to better target fuel poor households who are vulnerable
- How to better track the rates and impacts of fuel poverty on households with specific vulnerabilities 

The Committee believes that identifying and supporting vulnerable households is fundamental to tackling fuel poverty.  However, identifying vulnerability and directing targeted interventions, such as EE programmes at those households, is more complicated.

Vulnerability is a multi-faceted problem.  Acutely vulnerable households include a wide range who have some direct contact with the state (local council, DWP, NHS) or supportive intermediaries – CAB, foodbanks, community groups etc.

Vulnerability was recognised as a problem, some 12 years ago, when Ofgem published a strategy to address consumer vulnerability. Ofgem stated:

[our] approach recognises that vulnerability can be complex and may arise for many different reasons. Vulnerability is more than a list of personal characteristics, as both personal circumstances and factors in the market can affect consumer vulnerability.

To collate these people, and overlay deprivation data, requires a revolution in data sharing. This is all the more vital for those households who are reclusive and marginal, farthest from engagement with local agencies.

Ofgem recognises the growth in household energy debt.  If this, too, is data that can be shared, it could be that this, combined with council tax bands could be enough to trigger an enquiry about energy use, support, and energy efficiency.

So, for example, if customers with serious arrears to their energy company, were overlayed against those in Council tax bands A & B – this might identify fuel poor households.

There have also been “Warm Home Prescription” pilot schemes where vulnerable patients are identified by GPs and other data sets to direct support to overcome cold homes.

For years, lack of data sharing has been used as a reason for poor or inaccurate targeting.  In our view, the need to protect the health, wellbeing and financial security of those vulnerable consumers should justify a rethinking of data protection rules. 

The Committee also sees the necessary support for vulnerable households must include early and proactive engagement by the energy supplier and affordable repayment plans for those with energy debt.

8. What are your views on how we could better define or implement the sustainability principle? Please provide any supporting evidence.  Responses could include views on:  

- How the transition to net zero can be best implemented for fuel poor households
- The role of fabric first in alleviating fuel poverty 
- The role of fossil fuels within government schemes addressing fuel poverty
- How smart technologies could be used to support fuel poor homes
- How home retrofit can support climate change adaptation 

9. Are there any additional principles that you think should be considered for inclusion in the new strategy?  

The Committee supports the principle of sustainability.  This review quotes the COMMITTEE’s five main recommendations contained in our 2024 Annual Report.  The fifth of these was:

A fair transition to Net Zero that does not increase fuel poverty

The Committee would like the impact on fuel poor/low-income households to be assessed in advance of introducing any policies which might add to bills, including Net Zero initiatives.

We therefore believe the principle described should be “fairness and sustainability” – so the drive to lower emissions is linked to lower bills, which in turn is linked to reducing fuel poverty.

“Sustainability” cannot simply be reduced to replacing fossil fuels for homes with low carbon alternative heating.  The government’s support for a transition to net zero, is for a fair transition. Therefore, it is necessary to map a path to lower and more stable domestic energy bills, that avoids an upward trajectory in energy costs for households.

Therefore, as stated in Q5, the Committee approach to lowering emissions and lowering bills is to adopt a ruthless fabric first approach.  Lower carbon heating systems should not compete for the same funds as insulation.

As the Review consultation document notes, over half of the energy efficiency work since 2013, was achieved in the first four years.  The drift away from fabric first, to cheaper measures, such as heating controls, contributed to the flatlining of fuel poverty in the past five years, rather than continuing the downward trend.

Fundamentally well wrapped homes are the foundation of both reducing fuel poverty and reducing emissions year after year.

When homes are well-wrapped, smart technologies, and smart meters, to improve control of heating systems and prevent inefficient use, should follow-on, but are no replacement for a well-insulated home.

Going forward, the Committee hopes that in the hierarchy of measures implemented, we will not see net zero considerations overriding fuel poverty as the focus for resources.  A fabric first approach to this problem, addresses both goals with one policy.  Warmer homes reduce energy consumption, reducing emissions.  A win-win.

The government should be transparent about the total cost of meeting its fuel poverty and Net Zero objectives currently met by billpayers. The government should review the extent to which it is reasonable to continue to add the costs of these obligations, onto all billpayers as opposed to all taxpayers.

The Committee’s Annual Report 2023:

…welcomed the removal of the social and environmental levies from consumer bills in 2022. The application of social and environmental policy costs has a negative distribution impact most keenly felt among the most vulnerable and fuel poor. The removal of these charges into general taxation, which was welcome during the energy crisis, could become a permanent feature.

The Annual Report 2023 also recommended:

At the very least government should consider how to mitigate against the impact of additional charges on fuel poor and vulnerable households. For example, the proposal to move levies for social and environmental policy exclusively to gas consumers could exacerbate hardship for many low income and fuel poor households who rely on gas for space and water heating in the short to medium term. The timing of any such move should only occur when properties are substantially improved and when low-income groups have frictionless access to alternative means of home heating.

10. What are your views on the factors set out above which will determine what is ‘reasonably practicable’ in relation to meeting the fuel poverty target? Are there any additional factors that should be considered in the analysis of the number of homes that can achieve the target level by the target date? Please provide any supporting evidence.  

As it stands, the 2030 target is very difficult to achieve. It requires resources, smarter targeting, and tougher regulation, on different fronts to bear down on the problem – and the greatest challenge will be the low-cost private rented sector.

The Committee believes the “reasonably practicable” criteria is, in some ways, a fudge; and is better replaced by a more solid target.

The “reasonably practicable” criteria is an oblique reference to the fact that some properties, perhaps exposed rural cottages; farmhouses, and some non-traditional constructions, would require excessive resources to achieve a C-rating.  Indeed, DESNZ modelling suggests that 8% of properties cannot achieve the C rating at all.

The Committee recommends an explicit aim of raising 90% of properties to EPC C; but for those properties where it may cost £20,000 or more to do so, the goal should be to achieve whatever rating is possible using traditional insulation measures up to a set cost. 

In this way, the 2030 upgrading target is explicit, honest and provides value for money.

The Committee Annual Report identifies as a key recommendation:

Targeted and specific action for the private rented sector.

The Committee Annual Report noted that in 2024, 46% of properties in the private rented sector (PRS) were below an EPC C-rating. This is 1.1 million households.

Of all private rented sector tenants, almost one in four are fuel poor – the highest concentration of any tenure. Unlike social housing, where providers have clear programmes to upgrade properties by 2030 and regular monitoring of their progress; no such policy underpins the private rented sector.

There is a separate consultation on the PRS and the Minimum Energy Efficiency Standard which the Committee will respond to in detail. However, the Committee has been concerned for some time that too many landlords avoid or delay upgrading their tenants’ homes using the exemption cost cap of £3,500 to justify this. The policy has left many residents with the least control over their homes, in fuel poverty for years longer than is necessary.

11. What are your priority recommendations for an updated plan to improve the energy performance of fuel poor homes? 

In the view of the Committee the energy performance of properties is a first, order consideration.  Cold homes are a blight; create avoidable costs for the health service; undermine children’s ability to thrive; and exacerbate child poverty.

The priority therefore is worst first approach to upgrading properties; a fabric first approach and the necessary steps to speed up work in the private rented sector, through reform of the MEES regulations. 

Rightmove’s energy bill tracker identified that a 3-bedroom semi-detached, upgraded form an EPC E to a C-rating, reduced their energy bills by £1,518 (February 2025).^{[footnote 1]}

Therefore, the foundation to reducing fuel poverty is to make homes that meet high energy performance standards the norm, especially for low-income households.

12. What are your priority recommendations for the design of energy bill support for fuel poor households?  Responses could include views on: 

- who should receive support
- what form that support should take
- any additional policies which would contribute to the updated fuel poverty strategy to support fuel poor households with the cost of energy 

The Committee Annual Report 2024 noted that energy prices remain substantially above pre-Ukraine conflict levels.  In the decade before, energy prices had been relatively stable – and everything since has been seen as exceptional, not normal.

Our report’s first key message was:

based on current energy price levels, targeted support to the fuel poor will remain important, and necessary, for the foreseeable future

The House of Commons Library research Briefing “Gas and Electricity Prices during the ‘energy crisis’ and beyond”^{[footnote 2]} noted that the April 2025 energy price cap of £1,849 compares to £1,216 during the winter of 2021/2 (the cap immediately before the invasion of Ukraine).

This means current energy costs for UK households are 52% above the pre-Ukraine norm.

If one of the key pillars of the government’s strategy going forward is energy affordability, then in our view we have some distance to go. 

Unless many of those low-income or vulnerable households are put onto a path of affordability, they are going to continue to cost the billpayer/taxpayer, from one pocket or another (Warm Homes Discount, payments from the Household Support Fund, which some LAs direct to fuel support); or indirectly through costs to the NHS.

The simplest route to affordability is a social tariff, perhaps set at a discounted percentage of the current unit rate for energy.  Notably, a discounted unit rate helps those with prepayment meters most when the bills are highest, in winter. The total cost of this would reduce over time if the government’s insulation programmes reduced energy consumption; and make households more energy conscious.

As we get better access to data then there are several options that could work well depending on the consumer and government should be open to more than one solution (lump sum, discounted unit rate, rising block tariff).

During the energy price increase of 2022, the Commons Library report notes that gas usage fell by 20% and electricity between 4%-8%.  What we cannot see is unhealthy rationing, or self-disconnection, by those at the sharp end in the face of unaffordable bills.

In terms of who should receive this support, those on means tested benefits, whilst not perfect, is a good starting point for directing subsidy.  Perhaps some flexibility for GPs and others to refer individuals in, such as those in fuel poverty with high energy bills because of medical needs.

We are conscious that a robust social tariff policy has to have accurate data and be sensitive to changes in income and needs of the recipients.

13. What do you think are the priorities for government to support fuel poor households in accessing the energy market fairly and effectively? 

14. What are your views on how to improve targeting of fuel poor households? Please provide any supporting evidence.  Responses could include views on: 

- Alternative ways to set criteria to verify the eligibility of fuel poor households
- Views on tools that can support better targeting of fuel poor households
- How to improve the targeting of support for children and people with health conditions
- The role of referrals to help reach vulnerable households 

The most important player is government. A combination of data on benefits (DWP), income (HMRC), health (NHS) would be the best single way of identifying the largest cohort of financially or health-vulnerable households

The Committee welcomes that tackling fuel poverty is identified as a cross-government mission.  We welcome that work has begun on areas that overlap with tackling fuel poverty, such as the Child Poverty Taskforce, the Health and Energy Missions and the MHCLG Opportunity Mission.  It is important that this cross-government work is sustained by Ministers and officials.

The role of the energy companies in identifying fuel poverty cannot be under-estimated.  Their customer records can reveal growing energy debt in a low-income neighbourhood; intelligent computer systems can see when power is cut off for a period of days in winter; their systems could flag up unusual consumption patterns for prepayment meter customers.

In addition to government and the energy companies, there are a range of agencies; GPs/hospitals who see signs of cold-related illness; charities who encounter residents needing fuel vouchers; local government officers/councillors who encounter residents reporting damp and mould within their property; etc.

For each of these agencies, there should be a rapid referral route, which triggers an inspection of their home; an EPC rating (if not available) and connection to an approved intermediary to liaise about upgrading the home.  If the property is socially rented or privately rented; there should be clear circumstances that trigger a notice of improvement, giving the provider, say, a six-month window to complete essential work.

Rather like the duty of candour, where cold homes are suspected, there should be a duty to refer. Local government is an obvious avenue to undertake inspection and determine the most rapid route to improve the property where a cold home is discovered.

The Committee’s research on the journey to Net Zero for fuel poor households also identified

that each household’s journey is personal, and trusted, local intermediaries and good advice can prevent them from being excluded or lost before their life in a cold home has been resolved for the better.

This approach applies equally to tackling fuel poverty as it does to Net Zero for marginal and vulnerable households.

15. What else could improve partnership and learning to support the fuel poor? 

16. How could access to quality advice be improved to support the fuel poor? Where should advice be targeted?  

17. How could vulnerable households be supported to access advice? Is there a role for the health and social care workforce or other professional groups supporting vulnerable households? 

Wider understanding of fuel poverty and its impact derives from a shared mission to tackle fuel poverty that embraces government, local government the NHS.  This would enable the putting in place of a more collaborative, joined up approach across a wider range of legalisation and regulation, so opportunities, across government, to bear down on fuel poverty are not missed; and to maximise the impact of the collective effort.

Local authorities and regional mayors, working with partnership organisations, should have a clear strategic role to tackle fuel poverty, with a particular focus on building capacity in regions which have a high percentage of fuel poor households.  To that end, we welcome the devolution of funding to regional mayors.  And enhancing the ability of local authorities to refer fuel poor households for energy efficiency support under the ECO Flexible Eligibility Route 4 scheme.

Government and energy supplier schemes should make it as easy as possible for local authorities and housing providers to combine and partner with energy companies and others to deliver energy efficiency programmes.

The Department of Health and Social Care should ensure that England’s 42 Integrated care Systems and Integrated Care Boards directly address fuel poverty in their strategies; and as a minimum implement the NICE guidelines on health risks of cold homes.

Partnership learning and support could also be fostered through Health and Wellbeing Boards having fuel poverty forums that manage reports and actions. The Boards could oversee cross-agency training programmes for key professionals or third sector staff who might then act as support/advocates to the vulnerable household.

Every household where fuel poverty is suspected, should initially have an advocate – perhaps from a charity or local government – who verifies their circumstances and is their support/advocate during referrals.  The system must have integrity, objectivity and openness at its heart to work.

We look forward to the results of the Local Energy Advice Demonstrator (LEAD) pilot schemes to identify and share what works best. There are multiple ways people can access online energy advice, but it can be confusing and, in some cases, misleading. That’s why it is so important that government provides a single point of access that become the default trusted option for consumers and their advocates. 

Regarding energy companies, it is worth exploring how their branded initiatives could be aligned with a government accredited single brand covering all energy support and what learning from their campaigns can be applied to public funded initiatives.

18. How else can government improve understanding of fuel poverty and its impacts?  Responses could include views on:  

- Any evidence gaps which need to be filled to improve our collective understanding of fuel poverty and its impacts
- Examples of best practice which could improve our understanding of fuel poverty 

The general understanding of what fuel poverty is, who is affected and what the impacts are, are commonplace and widely understood.

The “gap” that exists is how we translate that broad knowledge into identifying those households and resolving their fuel poverty in a timely manner.

The numerous energy efficiency and home upgrade programmes still do not achieve the outcomes – or the hit rate – expected. 

The evidence gap appears to be a gap between the theory and the delivery.

England’s local authorities all have estimated levels of fuel poverty, yet none has a database of exactly who those households are.  Likewise, we have an estimate of the number of cold homes, but an estimated 3 out of every 10 properties do not yet have a valid EPC. We would suggest this is the crucial evidence gap that needs to be closed, for efficient delivery and for effective support for fuel poor households.

Therefore, the government needs a programme to ensure that every home built before a certain date has a confirmed EPC. 

There may also be a case for research to review and compare funding levels of energy efficiency programmes to the depths of fuel poverty between and within regions.

To build trust and confidence, there is also a case for live testing: research showing energy usage before and after homes are upgraded to test the effectiveness of insulation and other programmes in reducing energy consumption and impact on bills.  The Building Research Establishment undertakes research of this kind.

The Committee published research projects in the last two years:  “Understanding the challenges faced by fuel poor households” and “Understanding the barriers and enablers to supporting fuel poor households achieve net zero”. Our current research project is addressing the key factors that lead to energy bill inequity for fuel poor households and how future innovative tariffs could overcome this.

The Committee believes that research which takes the viewpoint or experience of the householders directly affected is essential to the widest understanding of fuel poverty and effective outcomes.

19. Are existing arrangements sufficient to meet our commitments to review and scrutinise government action on fuel poverty?  

Tackling fuel poverty is a very long-term policy and, therefore, successive governments benefit from having independent advice, such as the Committee on Fuel Poverty as well as the vital challenge received via Parliamentary scrutiny and stakeholders.

The Committee on Fuel Poverty undertakes this monitoring and advisory role, with limited secretariat support provided by DESNZ, and at minimal cost to the taxpayer. 

The publication of the Annual Fuel Poverty statistics is welcome, but a more current, live tracking of fuel poor household energy efficiency completions would be of more value in the short term.

20. Do you have any further views or evidence on how the 2021 fuel poverty strategy should be updated? 

The Committee recognises that the most acute problems created by fuel poverty occur in the coldest months of the year, when bills are highest, and the risks created by cold homes are greatest.  Every year, we write to Ministers urging that the NHS includes fuel poverty in its winter planning.  It has yet to do so.

1. https://www.rightmove.co.uk/news/articles/property-news/average-uk-energy-bills-how-to-save-money/ ↩

2. https://researchbriefings.files.parliament.uk/documents/CBP-9714/CBP-9714.pdf ↩