Sitting at the heart of the Welsh Government’s approach to tackling poverty is action to promote a fairer, more prosperous and greener Wales. For many years, we have taken clear and decisive action to tackle poverty in our communities and to protect and support the most vulnerable in society.
Welsh Government policies and initiatives, such as free prescriptions, free school meals, the education maintenance allowance (EMA) and a generous childcare offer, have made a real difference to the lives of people most in need of support. We have also tackled fuel poverty, with the most recent estimates suggesting levels of fuel poverty in Wales have more than halved in ten years.
Much of this reduction can be attributed to our continued investment in the Warm Homes Programme, which supports owner occupiers and people living in the Private Rented Sector to improve their home energy efficiency. More than £366 million has been invested through this programme, benefitting more than 61,400 households since 2011, saving bill payers an estimated average of more than £280 on their annual household fuel bills. The decision to expand the Nest Health Conditions Pilot in July 2019 has enabled more than 1,000 people at risk of avoidable ill health from living in a cold home to access help.
The investment we have made in the Welsh Housing Quality Standard has led to further improvements in the energy efficiency of social housing, which has better enabled tenants to maintain a warm home at an affordable cost.
Through these initiatives, we have been able to put more money back into more people’s pockets by reducing their energy bills.
Despite the progress we have made, in 2018, 144,000 lower income households were estimated to be living in fuel poverty. A further 145,000 Welsh households at risk of living in fuel poverty. This means spending between eight and ten percent (8-10%) of their household income on household fuel.
Reducing fuel poverty further has been made more difficult by our reliance on the UK Government to take action on welfare, to manage the energy generation and distribution systems in the UK, and by the onset of the coronavirus pandemic, which reached our shores in February.
We have worked to safeguard and insulate households from the worst effects of this deadly virus. We have provided additional support to low income households through our Discretionary Assistance Fund and have supplemented UK Government funding to support our business community. Despite this, our economy and household incomes have suffered.
As at 31 July 2020, 195,600 employees in Wales were furloughed under the Coronavirus Job Retention Scheme, a take up rate of 15%, the joint second highest of all the UK countries and English regions. Data published in July reported the number of people claiming Universal Credit in Wales has also continued to grow, with the number of claimants now 74.5% higher than in March, an increase of 116,000 people.
It is in this context I have published our new draft plan to tackle fuel poverty.
It is informed by extensive engagement with the third sector supporting our communities, including a round table I held in June last year. It is further informed by the Landscape Report into Fuel Poverty in Wales published in October 2019 by the Wales Audit Office, and by the work undertaken by the Senedd’s Committee for Climate Change, Environment and Rural Affairs inquiry into fuel poverty tabled in April.
These significant reports provide the backbone of the draft plan, which proposes to reduce estimated levels of fuel poverty over the next fifteen years. The draft plan sets out the immediate actions needed over the next two years.
We will develop the next iteration of the Warm Homes programme which will:
- Continue to target support to lower income households who are at risk of, or living in fuel poverty;
- Continue to advance a fabric first approach to home energy efficiency retrofit, installing the most appropriate energy efficiency measures to enable householders to maintain a satisfactory heating regime at an affordable cost;
- Continue to focus investment on the most thermally inefficient homes in Wales;
- Work towards the eradication of the burning of coal, wood and heating oil in our homes for primary heating purposes as part of our commitments set out in our clean air plan and our ambition to be net zero by 2050;
- Install low carbon heating systems and reduce the overreliance on the burning of fossil fuels to heat our homes, managing this transition in a way which does not result in more households becoming fuel poor.
As part of our plan, I am also proposing to do more to improve advice and support services to vulnerable households and people dis-engaged from the energy market. In the coming months, I expect to begin a pilot to explore what can be achieved by taking a more proactive approach to energy efficiency advice and support.
Alongside this, investment in improving the energy efficiency of our homes is, and will continue to be a priority for this Government.
The work being undertaken by my Cabinet colleague, the Minister for Housing and Local Government, as part of the Optimised Retrofit Pilot and our Innovative Housing Programme will ensure schemes delivering energy efficiency measures achieve the best outcomes for householders and the environment. This work links directly to our efforts to decarbonise Welsh housing and our ambitions to reconstruct an economy, better able to deliver against our climate ambitions.
The draft plan to tackle fuel poverty I published on 30 September is poised to take account of the new reality presented by the coronavirus pandemic, tackle the ongoing threat posed by Climate Change and take fresh action to lift people in Wales out of fuel poverty in all its forms.