Scottish Government

Main Findings

• As a result of the CHP improvements, the mean National Home Energy Rating (NHER) score increased from 3.31 to 6.87, with the percentage of dwellings scoring less than 4 falling from 66.4% to only 5.5%.
• Household-reported fuel expenditure prior to the CHP improvements ranged from 3.50 to over 35 per week, with 11.5% of households spending more than 20 per week. Afterwards, household-reported fuel expenditure ranged between 3 and 31 per week, with fewer than 4% of households spending more than 20 per week. The mean household-reported expenditure fell from 13.00 to 11.41 per week, a reduction of 12.2% on average.
• Prior to the new heating being installed, households were heating their homes on average 4.5 hours per room per day. With the new heating, this increased to 9.7 hours of heating per room per day, accompanied by an increase in the reported level of comfort for individual rooms, and across the whole home.
• To achieve the satisfactory heating regime before the central heating was installed would have required a mean expenditure of 1085 per year, a 60.5% increase on household-reported fuel expenditure. Following the CHP improvements, the cost of achieving this temperature standard fell to 549 per year, a reduction of 49.4%.
• Prior to the CHP improvements, the average fuel expenditure required to meet the satisfactory heating regime accounted for 10.9% of total household income, with 61.6% of households needing to spend more than 10% of their income on fuel, and 9.3% of households needing to spend more than 20% of their income on fuel. Afterwards, average expenditure fell to 5.5% of total household income, with only 7.8% of households needing to spend more than 10% of their income on fuel, and no household needing to spend more than 16% of their income. The CHP improvements removed 87.2% of the previously fuel poor households from fuel poverty.
• Regardless of the method for calculating income, the CHP removed a similar number of households from fuel poverty overall. The numbers removed from fuel poverty within different sub-groups (such as local authority housing association tenants, and non-pensioner households) varied considerably depending on the definition of household income.
• The results from the survey indicate that physical measures alone may be insufficient to eradicate fuel poverty. The improvements did not remove all households from fuel poverty. Those remaining in fuel poverty were characterised by low incomes. All remaining had a total household income of less than 9,000 per year; over half had an income of less than 5,000.

Background

The Scottish Fuel Poverty Statement states that a "household is in fuel poverty if, in order to maintain a satisfactory heating regime ¹, it would be required to spend more than 10% of its income (including Housing Benefit or Income Support for Mortgage Interest) on all household fuel use." ² As part of its strategy to reduce the number of households in fuel poverty by 30% by 2006, and remove all households from fuel poverty by 2016, the Scottish Executive launched the Central Heating Programme (CHP) in 2001. The CHP installs central heating systems and various insulation measures in Scottish dwellings without central heating. To monitor progress, the Scottish Executive commissioned a research study to carry out an annual survey over each of the first three years of the CHP. The primary aims of this research study are to determine:

• the extent households were in fuel poverty before the CHP improvements;
• whether they were removed from fuel poverty, or had the degree of fuel poverty reduced;
• whether those not in fuel poverty have benefited from lower fuel bills or other improvements.

This research study also assessed a number of secondary effects of the CHP, including changes in levels of fuel debt, fuel tariff and payment method and changes in use of the house.

The Survey

In total, 8,508 dwellings received a new heating system under the CHP during 2001/2002. From this total, 300 private sector, 300 local authority and 200 housing association randomly selected addresses were approached; 470 households agreed to participate in this study. The interviews, which were conducted between October 2002 and March 2003, took place after the heating had been installed.

Three significant factors in determining whether or not a household is in fuel poverty are the energy efficiency of the home, household fuel costs, and household income. The survey collected information of all three through:

• an energy survey of the dwelling to collect information on its insulation and heating characteristics for both before and after the CHP improvements; and,
• a household questionnaire to collect information on the use and heating of individual rooms, the incidence and extent of condensation in the home, fuel expenditure, methods of payment, self-disconnection, fuel debt, household characteristics, health concerns, and income.

Importantly, information collected through the survey and the questionnaire distinguished between the situation prior to the CHP improvements, and afterwards. This energy survey and assessment of fuel costs to achieve the satisfactory heating regime were analysed using the NHER Surveyor 3 ³ energy audit computer software.

Energy Efficiency of the Dwelling

The National Home Energy Rating (NHER) score provides a succinct measurement of the overall energy efficiency of a dwelling on a scale of 0 - 10. A NHER score of '0' indicates a poorly insulated dwelling that is reliant on an expensive form of heating; a score of '10' indicates a dwelling that is extremely efficient in its overall use of energy.

Prior to the CHP improvements, 66.4% of the dwellings surveyed scored less than 4 on the NHER scale, with a mean NHER score of 3.31. No dwelling scored higher than 7. By way of comparison, the 2002 Scottish House Condition Survey has a calculated average NHER of 5.4 ⁴, with only 17% of Scottish dwellings scoring less than 4 on the NHER scale. As a result of the CHP improvements, the mean NHER score of the dwellings surveyed increased to 6.87, with only 5.5% of the sample scoring less than 4 on the NHER scale (see Figure 1).

Household Fuel Costs

Household-reported fuel expenditure prior to the CHP improvements ranged from 3.50 to over 35 per week, with 11.5% of households spending more than 20 per week. The mean expenditure was 13.00 per week. After the CHP improvements, household-reported fuel expenditure ranged from 3 to 31 per week, with fewer than 4% of households spending more than 20 per week. The mean household-reported expenditure fell to 11.41 per week, a reduction of 12.2% on average.

Amongst low-income households, household-reported fuel expenditure is considered to be a poor indicator of the amount they actually need to spend to achieve reasonable temperature standards. Certainly before the new heating was installed, households were heating their homes to considerably lower standards than set out in the satisfactory heating regime. When the use of heating in each room was aggregated and averaged across the whole house, the result was a mean use of heating of 4.5 hours per room per day. In terms of the reported level of comfort, when the individual room scores were aggregated and averaged across the whole house, 85% of dwellings scored less than comfortable overall, with a mean reported level of comfort of 2.16 ⁵.

After the new heating was installed, the use of heating in the home increased considerably. While there was a small reduction in the heating of the lounge compared to previously, all other rooms were heated for longer (see Figure 2). On average, the use of heating increased by 5.2 hours, to 9.7 hours per room per house per day. The increased use of heating brought an increase in the reported level of comfort, with the overall mean level of comfort rising from 2.16 to 3.62, with 91% of dwellings being rated between 'comfortable' and 'warm' overall.

To achieve the satisfactory heating regime prior to the CHP improvements required a mean expenditure of 20.86 per week, a 60.5% increase on household-reported fuel expenditure ⁶. While 22.1% of households needed to spend up to 15 per week, 20.2% of households needed to spend over 25 per week, to achieve these standards. The CHP improvements significantly reduced the cost of achieving the temperature standard. Mean expenditure required fell from 20.86 to 10.56 per week (a 49.4% reduction), with 93.7% of all households needing to spend less than 15 per week and just one household needing to spend more than 25 per week (see Figure 3).

Household Income

To take account of various concerns about different ways by which household income may be calculated, and the impacts of these different calculations on the fuel poverty figures, household income was calculated for the main respondent, spouse or partner, and any economically active adults living at home in four ways:

1. household-reported income with no adjustments for subsidies or housing costs.

2. total household income including Housing Benefit, Income Support for Mortgage Interest, but net of Council Tax.

3. household income excluding Housing Benefit and Income Support for Mortgage Interest and net of Council Tax.

4. household income net of all housing costs, including Housing Benefit, Income Support for Mortgage Interest and Council Tax Relief minus full rent, mortgage and Council Tax.

How household income was defined had a considerable effect on the average household income. The different definitions of household income provide a range between the 'high' of total household income that includes all benefits and a 'low' when all housing costs are removed (see Table 1). For the year before the CHP, household income ranged on average between 8,498 when all housing costs were excluded to 9,930 when the calculation included Housing Benefit, Income Support for Mortgage Interest and Council Tax Relief - a difference of over 14%. A similar range in household income exists after the CHP improvements.

Table 1: Overall Average Household Income

Impact on Fuel Poverty

The CHP improvements resulted in a considerable reduction in the percentage of household income spent on fuel and, as a result, a reduction in the incidence and severity of fuel poverty. Prior to the CHP improvements, the fuel expenditure required to meet the satisfactory heating regime accounted on average for 10.9% of total household income. 61.6% of households needed to spend more than 10% of their income on fuel, while 9.3% needed to spend more than 20% of their income on fuel. Afterwards, required expenditure fell to an average of 5.5% of total household income, with only 7.8% of households needing to spend more than 10% of their income, and no household having to spend more than 16%. The CHP improvements removed 87.2% of the fuel poor households from fuel poverty (see Table 2).

The tangible difference between the various definitions of income is the number of fuel poor households both before and after the CHP improvements - the higher the income, the fewer households in fuel poverty prior to the CHP improvements, and subsequently (see Table 2). The inverse was also found to hold true - the lower the income, the more households in fuel poverty both before and after the improvements. Regardless of the method for calculating income, the CHP is successfully removing households from fuel poverty.

Table 2: Comparison of Impact of CHP by Definitions of Income

The method of calculating income effects various sub-groups within the sample differently. While the CHP was found to remove considerable numbers of households from fuel poverty across all of the sub-groups examined, the actual numbers removed varied depending on the method of calculating household income. The largest variations in the number of fuel poor occurred amongst local authority and housing association tenants depending on whether or not Housing Benefit was included in the income calculation. By contrast, the number of fuel poor owner occupiers showed almost no change with the change in the income calculation.

The results from the survey indicate that physical measures alone may be insufficient to eradicate fuel poverty. Regardless of the definition of income, some households remained in fuel poverty after the CHP improvements. Those that remained in fuel poverty were characterised by low and very low incomes, all having a total household income of less than 9,000 per year; with over half having an income of less than 5,000 per year. This represents a considerable change on the situation before the central heating was installed when fuel poor households extended into much higher income bands (see Figure 4).

Condensation, Dampness and Mould

The large majority of the individual rooms were recorded as being dampness, condensation, and mould-free for the periods before and after the CHP improvements. Where condensation, dampness or mould problems were reported or found, there was a reduction in the number of rooms effected by these problems, as well as a reduction in their overall severity, subsequent to the CHP improvements.

The number of completely condensation and damp free homes increased from 308 prior to the CHP improvements to 425 after, with the mean overall severity of condensation and dampness ⁷ falling from 0.28 before to 0.05 after the CHP improvements. The number of completely mould-free homes increased from 397 prior to the CHP improvements to 452 afterwards. The average overall severity of mould in the home fell from 0.13 to 0.02.

Other Changes

Fuel Debt

Only a small number of households (5.5% of electricity customers, and only 1.7% of gas customers) reported that they had a fuel debt with either their electricity or gas supplier, either before or after the CHP improvements. All of these debts had been incurred before the CHP improvements as no household reported that they had only incurred a debt or that it had got worse afterwards. All but one of these households were in the process of paying the debt off at the time of interview either through weekly or monthly payments agreed with the supplier, or had paid it off completely. What cannot be said here is that the reductions in these fuel debts were directly attributable to CHP improvements. As most of the households had entered into an agreement with their respective fuel supplier prior to the CHP, they would have been paying off these arrears regardless of the CHP improvements.

Prepayment Meters and Self-disconnection

Less than a quarter of households (21.7%) had a prepayment meter for either their electricity or gas supply. Self-disconnection does not seem to have been much of a problem, either before the CHP improvements or since. Amongst those households with a prepayment meter, 79.5% stated that they never let it run out of credit completely, and another 12.3% stated that they had sometimes used the emergency credit facility but had not allowed it to run out altogether. The only difference noted in the incidence of self-disconnection was that 3 households, all with an electricity prepayment meter, stated that they had not self-disconnected since the installation of the new heating system.

Changing Fuel Supplier

Prior to the CHP improvements, the 3 traditional Scottish fuel suppliers (Scottish Gas, ScottishPower and Scottish Hydro-electric) accounted for the electricity supply of 98.1%, and the gas supply of 98.6% of the households surveyed. Overall, these three companies still dominated the supply of fuels after the CHP improvements as only a small number of households (13.6%) reported that they had changed either their electricity supplier, their gas supplier, or both. Some had changed more than once since the new heating was installed. Overwhelmingly the main reason cited for change was the search of cheaper fuel bills. None of the households stated that they had changed supplier because of advice received through the CHP.

Method of Paying for Fuel

Amongst those households where a direct comparison could be made, there was a slight shift away from quarterly billing and prepayment meters, towards paying for fuel consumption by regular amounts through direct debit and weekly payment arrangements. It is not possible to claim that households that changed their method of payment did so as a result of the CHP. Those that changed did so in search of lower fuel bills or for reasons of convenience (e.g. dual fuel suppliers). These options were available to these households, regardless of the CHP; none of the households surveyed stated that they had changed their method of payment because of advice received through the CHP.

Use of the Home

All households were asked about whether their use of individual rooms had changed subsequent to the CHP improvements. The results indicate a small, net increase in the use of all rooms in the home, subsequent to the CHP improvements.

Improved Health

All occupants were asked about their health before and after the CHP improvements. While two-thirds (65.8%) of householders reported no health problems prior to the CHP improvements, of those that did, two-fifths (39.9%) reported that their condition or problem had eased or improved since the new heating was installed. Despite all of the qualifications that must be applied here, and without claiming that the installing of the new heating and the improved health are directly linked, the results are positive ⁸.

Household Experience with the New Central Heating System

The general opinion of the households receiving improvements under the CHP was overwhelmingly positive:

• 83.4% of households reported that the new system heated the home either well or extremely well
• 78.5% of households stated that they were either satisfied or extremely satisfied with the new system overall.
• 78.9% stated that they found the new systems either easy or extremely easy to use.

Conclusions

Installing new heating systems amongst other improvements under the CHP appears to have achieved very noticeable and tangible benefits amongst the households surveyed.

The CHP has succeeded in reducing the cost of heating the home to a reasonable temperature standard and, as a result, has removed significant numbers of households from fuel poverty and reduced the severity of fuel poverty, both overall, and amongst various sub-groups within the population. Conditions within the home have improved. Homes are being heated more; rooms are being used more; and, households consider their homes to be warmer and more comfortable to live in.

Subsequent to CHP improvements, a number of other changes have been noted. However, many of these changes only affected a small number of households, and may not be necessarily directly attributable to the CHP. These changes included a reduced incidence of self-disconnection and fuel debt, and a lower incidence and reduced severity of condensation, dampness and mould growth. Households have switched fuel suppliers to take advantage of cheaper tariffs, and have switched to cheaper and more convenient methods of payment. Households are heating and using more of their homes. Finally, householders reported that their health had improved since the new heating had been installed.

Further Work

Further surveys will be conducted amongst households that receive new heating systems and other improvements under the CHP during 2002/2003 and 2003/2004. An annual report will be produced after the information has been analysed. The data collected over the three years of the research project will allow statistically valid results to be broken down by tenure, by urban and rural locality, and between households with occupants over and under 60 years of age.

Footnotes

1. The Scottish Fuel Poverty Statement defines the satisfactory heating regime for elderly and infirm households to be 23°C in the living room and 18°C in other rooms, to be achieved for 16 hours in every 24. For other households, it is 21°C in the living room and 18°C in other rooms for 9 hours in every 24 (or 16 in 24 over the weekend), with two hours being in the morning and seven hours in the evening.
2. Scottish Executive (2002) 'The Scottish Fuel Poverty Statement', Edinburgh: The Stationery Office, para 3.4
3. NHER Surveyor 3 is one of the suite of software programs available from National Energy Services, National Energy Centre, Davy Avenue, Knowlhill, Milton Keynes MK5 8NA.
4. D. Cormack, K. Friel, S. Grainger, D. Millen, A. Robinson (2004) Fuel Poverty in Scotland: Further Analysis of the Scottish House Condition Survey, Edinburgh: Communities Scotland and Scottish Executive.
5. The level of comfort achieved in each room in the dwelling was rated by the households surveyed on a scale where 1 = cold; 2 = cool; 3 = comfortable; 4 = warm; and 5 = hot.
6. The SFPS is not concerned with actual household fuel expenditure if the end product is still a cold home. Those surveyed needed to spend more than reported on fuel to achieve the temperature standards set our in the satisfactory heating regime. The NHER Surveyor 3 program was used to calculate just how much households needed to spend to achieve the respective satisfactory heating regimes given the heating and insulation characteristics of the dwellings both before and after the CHP improvements.
7. Condensation and / or dampness in each room was scored for both before and after the CHP improvements on a scale where 0 = none; 1 = small spots; 2 = hand-sized patches; 3 = larger patches. Mould growth was scored independently, but on the same scale.
8. The Scottish Executive has commissioned a separate study to assess the impact of the CHP on health. Consisting of a survey of an intervention and control group of households at three separate points in time the study is due to report in September 2006.