Response to government home insulation plans

LGA media release - 12 February 2009

Responding to the announcement by the Secretary of State for Energy and Climate Change on  home insulation, council leaders called for energy suppliers to pay a £500 million annual charge to help fund a comprehensive home insulation programme that would lift half a million people out of fuel poverty.

The Local Government Association, a cross party organisation representing councils in England, believes that the Government's ambition improve the housing stock long term is a good move but is calling on them to go further.

The LGA recently commissioned independent experts SQW energy to investigate the published financial statements of the six major energy suppliers. Its analysis found that dividend payments have risen from £1.378 billion in 2006 to £1.635 billion in 2007, a 19 per cent increase and equivalent to £75 per household.

Extra investment in council-led home insulation programmes would save 10 million households £280 a year on their energy bills, lift 500,000 people out of fuel poverty and create up to 20,000 new ‘green’ jobs.

Sir Jeremy Beecham, Vice Chairman of the Local Government Association, said:

“The long term plans announced today to help people have warmer homes and cut their energy bills are a major step forward.

"The freezing conditions over the last couple of weeks have taught us that there also needs to be some urgent short term measures to cut bills and keep people's homes warmer.

“Last winter, during average temperatures, the cold was blamed for more than 25,000 extra deaths in England and Wales, the vast majority among the over 75s. Unless we act quickly more people will die unnecessarily because of the cold.

“A comprehensive home insulation programme is the best long-term solution to tackling fuel poverty, cutting domestic carbon emissions, creating jobs and saving people money.

“The suppliers talk about the need for investment in new forms of energy and nuclear power stations. The most effective investment drive would be a national home insulation programme. This would allow the energy firms to continue being profitable and provide the best long-term solution to cutting carbon emissions and fighting fuel poverty.

“As the economy has entered into a recession, insulating existing homes must remain a priority that can create jobs and help those struggling to pay their fuel bills. The LGA proposals for a national home insulation scheme would save households around £280 on their energy bills each year and create much needed jobs.

“This extra money will lift the most needy out of fuel poverty, and protect the elderly and vulnerable. Trapping people into dependency on hand-outs will not tackle the causes of fuel poverty or bring about a permanent reduction in greenhouse gases. There needs to be a comprehensive drive to insulate every home in the country to cut carbon emissions and lift people out of fuel poverty.

“A national home insulation programme will not be achieved overnight. The energy suppliers have been asked to contribute more towards cutting carbon emissions and household bills, but this investment must not be a one-off gesture and the cost should not be passed on to consumers.

“The average household is already paying £33 a year extra on their bills towards energy efficiency schemes, and they simply cannot afford to pay any more.

“Councils are uniquely placed to deliver energy saving programmes. Councils can coordinate delivery to ensure the most vulnerable are assisted first and can link in other goods and services such as security devices and benefit entitlement checks.”

ENDS

Author: LGA Media Office
Contact:  LGA Media Office, Tel: 020 7664 3333