Home Energy Efficiency Scheme (England) (Amendment) Regulations 2010

Lord Marland Excerpts

Tuesday 26th October 2010 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, in answering these comprehensive questions I shall lump them together.

First, I welcome the noble Baroness, Lady Morris, who has changed her name since I had tea with her this afternoon—for the record, I thought she was called Baroness Smith—who made an excellent first speech as the shadow DECC Minister. It was a factual speech which represented the situation fairly, adequately and comprehensively and I thank her for that. I also thank her for the pre-advice she gave me on some of the questions I need to answer. I am not sure that I have all of them but I shall do my best. I thank the noble Lord, Lord Beecham, and my noble friend and colleague Lord Teverson, who is always so excellent on these matters. He is missed when he goes to Japan but we know that he is doing valuable work out there on behalf of this subject.

I shall go through the questions as asked by the noble Baroness and pick up on them. What percentage of the 2010-11 budget has been allocated to date? As at the week ending 16 October, £310 million has been allocated; of this about £180 million has been spent. As at 16 October approximately 81,000 customers had made applications that are currently being actioned. This number takes account of customers who have dropped out of the process. We expect these applications and other costs to lead to further expenditure of about £130 million.

When does the Minister consider that the 2010-11 funding will have been fully allocated? The Warm Front budget for 2010-11 remains unchanged at £345 million—I underline the fact that it remains unchanged—and the measures will continue to be delivered throughout the year. The scheme remains open to new applicants this year while the resources are available to meet the commitments—that is what we have promised—and, at the current rate of applications, we expect the funding to be fully utilised by mid-December. I should point out that, despite the comments made by the noble Lord, Lord Beecham, and the spending review, the commitment has remained. There has been no going back on it and it has been honoured. Applicants contacting Warm Front after the funding has been fully allocated will be advised to reapply once the scheme reopens.

What demand is anticipated for the years 2011-12 and 2012-13 and are we planning any changes to the criteria for those years? We expect the demand to be lower in 2011-12 and 2012-13 because of changes to the scheme. Based on the available budget, we expect, as a maximum, to be able to help 60,000 households in year one and 54,000 in year two of the spending period. We will work to improve the cost-effectiveness of the Warm Front scheme by ensuring that it will be better targeted to help the most vulnerable. We will be consulting to make sure that the eligibility criteria reflect this.

Another question concerned monitoring. The scheme is monitored on a weekly basis to review the flow of applications and expenditure commitments. This is underpinned through the contractual reporting arrangements and will continue throughout the lifetime of the scheme. An equality impact assessment will be undertaken in advance of temporary closure to new applicants and we will also conduct an equality impact assessment on any proposed changes to the eligibility criteria.

Warm Front will continue until the Green Deal is launched. The Green Deal is a key element of our policy to improve household energy efficiency. It will help to protect people against price rises through greater energy saving, with special support for the most vulnerable. The new energy company obligations, starting in late 2012, will run in parallel with the Green Deal programme. It is intended to focus particularly on households that cannot achieve financial savings without additional support, including the poorest and most vulnerable and those in hard-to-treat homes. This includes offering a wide range of measures to improve energy performance, such as heating systems. As announced on 20 October, as part of our spending review, the renewable heat incentive will go ahead in 2011. We expect to be in a position to announce details of the scheme at the year end and to be open for business in 2011.

I hope that that deals with most of the noble Baroness’s questions. If she has more, I am always delighted to hear them. I hope that what I have said also picks up the comments of the noble Lord, Lord Beecham. I shall now respond to his comment about Eaga, about which he is obviously very knowledgeable.

Eaga has been contracted by the Government to deliver Warm Front since 2005. The contract provides for fees to be paid to Eaga, based on its delivery. We intend that the scheme should provide for the vulnerable; that was Eaga’s main task when it was set up. Given the statistics, the Government think that the scheme has not fully targeted the vulnerable. Fuel poverty has increased from 4 million to 4.6 million, which indicates that one of the things that the scheme was introduced to do has not been achieved to the desired end. However, that does not mean to say that Warm Front is wrong; we have been lucky to have it as an experiment. When something is not working completely, it is the job of government to recognise that and adjust it. That is why we have learnt from the mistakes made and developed two new policies. The social price support will generate £250 million of support, rising to £310 million by 2014-15, while the Green Deal will continue to offer practical support to households and will focus on the vulnerable.

Before the new schemes are introduced, we are consulting on how Warm Front should best operate and who are the most needy and vulnerable. We will then target those people for the delivery of these measures, which we hope to do by November. I hope that that explanation satisfactorily answers the questions that have been asked.

[Baroness Smith of Basildon]

My Lords, I thank the Minister for the care that he has taken in addressing the questions that have been raised today. I thank also the noble Lords, Lord Beecham and Lord Teverson. Tempted as I am to get the latter’s name wrong, I promise not to do so.