Jamie Torrens, Department of Energy and Climate Change

1. Fuel Poverty Strategy and
health
16 July 2013

2. The Hills Review
• Independent review commissioned in
March 2011 from Professor John Hills of
the London School of Economics
• Key questions considered:
– Is fuel poverty a distinct issue? Yes
– Whether the current definition is
correct? No
– How fuel poverty should be
measured? Low income households
facing high energy costs
• Final report to Government to March 2012

3. • Independent review commissioned in
March 2011 from Professor John Hills of
the London School of Economics
• Key questions considered:
– Is fuel poverty a distinct issue? Yes
– Whether the current definition is
correct? No
– How fuel poverty should be
measured? Low income households
facing high energy costs
• Final report to Government to March 2012
The Hills Review

4. Professor Hills recommended
adopting the Low Income High Costs
(LIHC) approach. Where a household
is fuel poor where:
- It has an after housing costs
income below the poverty line
(after adjusting for energy costs)
- It faces above average (modelled)
energy costs
The LIHC approach provides twin
indicators that show the extent and
depth of fuel poverty.
The Hills Review: the LIHC definition

5. Beyond Hills: a new strategic
framework
September 2012: consultation on a
proposal to adopt a new definition
based on the recommendations of the
Hills review
July 2013: formal response to the
consultation and publication of a new
strategic framework (‘Fuel Poverty: a
Framework for Future Action’), which
sets out how we will use the new
definition to shape future policies.

6. Who should we prioritise for support? How should we support those households?
Using the new indicator
to shape policies?

7. The LIHC indicator doesn’t reflect the fact that certain households are vulnerable to the
impacts of fuel poverty. The strongest evidence on vulnerability relates to the health
impacts of living at low temperatures and in poorly insulated dwellings. There is compelling
evidence that the drivers of fuel poverty are strongly linked to living in low temperatures.
The Marmot Review Team
provided a comprehensive
overview of the evidence linking
fuel poverty related factors to
poor physical and mental health
as well as the effect of
interventions to mitigate them.
The Hills Review also provides a
comprehensive summary of the
literature.
How do we take account of
vulnerability?

8. Quantifying the health
impacts of fuel poverty
Cold-related morbidity and mortality
Complex interactions, but persuasive
evidence linking low temperatures with a
range of health impacts from minor
infections to serious respiratory and
cardiovascular conditions in particular
that can prove fatal. Three main ‘at risk’
groups:
- Elderly people
- Very young children
- People with a long-term sickness or
disability
Evidence less clear cut on the link
between cold indoor temperature and
mortality
Quantifying health impacts
Source: HI-DEEM model
Being able to quantify and monetise the
health impacts of fuel poverty will allows us
to explicitly recognise vulnerability in
decisions around prioritisation and policy
choices.

9. • Prioritisation of the households that are suffering from the most severe problem:
the new indicator helps us to understand the factors that are important in driving fuel
poverty (and severe fuel poverty) and to identify a set of risk factors that will help us to
prioritise support to those households that are suffering from the most severe problem
• Supporting priority households through cost-effective policies: the analysis set out
in the strategic framework document helps us understand where there is cost effective
potential to support fuel poor households and also the trade-offs that may result if we
prioritise supporting more ‘hard to treat’ households.
• Ensuring that vulnerability is reflected in fuel poverty policies: this means that we
will continue to prioritise vulnerable fuel poor households – i.e. those households
containing older people, children or long-term sick or disabled people – for support under
fuel poverty policies.
Guiding principles of future
policy development