The number of households in fuel poverty across England is likely to be up to two and a half times higher than the Low Income Low Energy Efficiency (LILEE) indicator states, according to research from a multi-disciplinary group of researchers at the University of Nottingham.
In 2019, the government introduced the LILEE indicator to identify whether a household is fuel poor when measured against two elements:
- Whether people are living in a property with an Energy Performance Certificate (EPC) rating of D or below; and,
- Whether people are left with residual household income below the official poverty line following energy expenses (including heating, cooking and use of electrical appliances).
To identify potential shortcomings of this metric, researchers conducted a two-part study to analyse fuel poverty and energy insecurity levels in London, with the findings published in Energy Policy.
Torran Semple, study lead and PhD student in the Faculty of Engineering, said: "When LILEE was introduced, the government acknowledged it omits some 'homes who are unable to afford sufficient energy to keep warm', which contradicts most definitions of fuel poverty and energy security across the globe."
Given the fact all homes with an EPC rating of A-C are automatically excluded by LILEE, this raised questions for us as to whether its primary function is to measure fuel poverty or encourage energy efficiency upgrades.
Torran continued: "Retrofitting is crucial when it comes to decarbonising our housing stock and providing healthier more comfortable homes. However, it is costly so not always accessible to all as we found in previous work, and only able to reduce bills to some extent. Improving a home's energy efficiency will help but it isn't equivalent to eradicating fuel poverty – we need investment in both."
The first part of the study was a spatial analysis of fuel poverty in the capital, which exposed discrepancies between deprivation and expected fuel poverty levels. In addition, around 171,000 financially vulnerable households (i.e. where the main earner was unemployed or economically inactive) were classed as "not fuel poor" by default due to their EPC rating.
This was followed by a resident survey of 2,886 households in London, which found that around 27% of respondents in EPC A-C rated households were energy insecure, a figure that was only slightly lower than EPC D-G, which came in at around 29%.
Dr John Harvey, Associate Professor based in N/LAB at Nottingham University Business School, said: "One of the most eye-opening takeaways from this research is that there is a significant number of financially vulnerable homes, including those in social housing, that are automatically excluded from current statistics purely because their homes are considered to be energy efficient."
Our findings have shown that the rate of energy insecurity in London is 145%, or two and a half times, higher than the official LILEE fuel poverty rate, highlighting the likelihood that the metric is considerably underestimating the number of households struggling to afford to keep their homes warm.
Torran added: "It's clear to see that EPC ratings have little impact on energy insecurity and, therefore, should probably be removed from fuel poverty assessments. So, our attention now turns to identifying our own metric that will provide a more accurate representation of England's fuel poverty levels.
"To do this, we'll be collaborating with industry to test our ideas against real household data over the next 12 months, which can then be proposed to government as a replacement for LILEE. At a time when the cost-of-living crisis continues to affect thousands of people across the country, it's never been more important to ensure an accurate metric is in place so effective means of support can be developed and provided."
To read the paper in full in Energy Policy, click here.
