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CASE STUDY Indeed, a

CASE STUDY Indeed, a comprehensive study of household energy expenditure in the UK by Hirsch et al. (2011: 4) found that on average, households consume only around two thirds of their theoretical ‘need’, with people on low incomes most likely to be under-consumers of energy. 2.3 Household Income: The final consideration necessary for both required and actual energy expenditure models is how to accurately assess household income. However, the definition of income is contentious in three key ways: firstly, whether to use a before housing costs or after housing costs measure, secondly, what welfare payments or benefits should be included within this calculation, and lastly, whether income should be equivalised to reflect household size (see Boardman, 2010; Hills, 2012; Thomson, 2013). 2.4 Limitations of expenditure based approaches: The expenditure approach is one of the most widely used methods for measuring energy poverty, in part due to the objective and quantifiable nature of the approach. However, in some instances there has been an incorrect or uncritical application of methodologies from the UK in other countries, suggesting that the underlying methodology is complex and not easily, and that perhaps there is a need to build technical and scientific capacity within this field. Indeed, the confusing nature of the expenditure approach has been highlighted by Healy and Clinch who state “it can be misleading, as several formulae now exist for calculating fuel poverty, some with housing costs included in net household income (…) while other calculations analyse gross household income as opposed to net” (Healy and Clinch, 2002a: 5). In addition to this, data requirements/availability, assumptions around energy needs and definitions of income all give rise to criticism. Case Study Box 1 indicates some of the problems of using an expenditure based approach in England with reference to disabled people. There is sufficient data on the English housing stock to base energy poverty indicators on required energy spend rather than actual energy spend, housing conditions to be accounted for, and, under the LIHC measure, to adjust for household size. However, a recent study conducted by Snell, Bevan and Thomson (2014) highlights how both the 10 per cent and LIHC measures of energy poverty used in England is likely to under estimate both energy poverty rates and the lived experience of disabled people, one of the groups considered by the government to be most vulnerable to it. Measuring energy needs sufficiently: Whilst the English measure of energy poverty is based on modelled energy requirements, this is essentially a ‘one size fits all’ approach that is unable to cater for a variety of different energy needs. However evidence suggests that people with particular impairments or conditions may need (amongst other things) higher indoor temperatures; longer periods of warmth; the use of air conditioners and other energy intensive equipment; and additional washing and drying facilities. These needs are not considered within the current measurement of energy poverty in England, and arguably, as a result, this is likely to underestimate the energy needs of a highly vulnerable group. Measuring income sufficiently: Whilst the energy needs of disabled people may be underestimated under the current English definition, the incomes of some disabled people may be artificially inflated. Under the current measurement of energy poverty disability related benefits such as Disability Living Allowance (DLA) are treated as disposable income that could be spent on energy bills. There is significant criticism regarding the treatment of disability related benefits as income under the existing measure, particularly benefits such as DLA, and the subsequent likely under reporting of energy poverty rates amongst disabled people. Criticisms centre around the idea that benefits such as DLA are disposable income, whereas in actual fact they are specifically there to compensate for the additional costs caused by a disability. Furthermore a measure that compares the income of two households (one containing a disabled person, the other not) is problematic, as in reality a household containing a disabled person may have less disposable income to pay for fuel costs, given the additional costs that disabled people often face. Table 2 produced by Snell et al. (2014) highlights the difference in energy poverty rates when disability related benefits are removed from the calculation of income. 108 DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU 109

Table 2 - Energy poverty rates, disabled people and household income (Snell et al., 2014) % of population in energy poverty (percentage) number of households in energy poverty (millions) increase in energy poverty after removing dla & aa (percentage) increase in number of energy poor households after removing dla & aa (thousands) 10% full income lihc disabled person present in hh disabled person not present in hh disabled person present in hh 20.4 14.6 13.2 10.5 1.29 2.21 0.84 1.60 + 2.0 - + 1.2 - + 413 - + 72 - disabled person not present in hh Given the rigid treatment of energy needs and inclusion of disability related benefits as disposable income, it is likely that the existing English definition under estimates energy poverty rates amongst one of the groups considered by policy makers most vulnerable to its effects. 3. Subjective/Consensual approach Given the criticisms and difficulties associated with the expenditure approach, some researchers (most notably Healy, 2004; Thomson and Snell, 2013; Petrova et al., 2013) have proposed the use of self-reported subjective indicators to quantify energy poverty. This method is grounded in the consensual poverty approach and is based on the inability “to afford items that the majority of the general public considered to be basic necessities of life” (Gordon et al., 2000: 7). This approach typically involves asking individuals and households a combination of the indicators listed in Table 3 Table 3 - Summary of available subjective indicators. (Thomson et al., 2016b) indicator Ability to pay to keep home adequately warm Arrears on utility bills within the last 12 months Risk of falling behind on paying utility bills over next 12 months Leaking roof, damp walls/floors/ foundation, or rot in window frames or floor Dwelling comfortably warm during winter time Dwelling equipped with heating facilities Dwelling comfortably cool during summer time Dwelling equipped with air conditioning facilities data sources EU-SILC main survey; Eurobarometer 72.1 (2009) and 74.1 (2010); European Quality of Life Survey 2007 and 2012 EU-SILC main survey; European Quality of Life Survey 2007 and 2012 Eurobarometer 72.1 (2009) and 74.1 (2010) EU-SILC main survey; Eurobarometer 73.2 + 73.3 (2010); European Quality of Life Survey 2007 and 2012 EU-SILC ad-hoc housing conditions module 2007 and 2012 EU-SILC ad-hoc housing conditions module 2007 and 2012 EU-SILC ad-hoc housing conditions module 2007 and 2012 EU-SIL ad-hoc housing conditions module 2007 The consensual approach has tended to be used to measure pan- European rather than national energy poverty. Recent comparative analyses of EU-wide energy poverty have been undertaken by researchers such as Bouzarovski and Tirado Herrero (2015), Dubois and Meier (2016), Thomson and Snell (2013), and Thomson et al. (2016b). The consensual approach has numerous strengths. Firstly, it can be less complex to collect consensual data than expenditure data, particularly required modelled expenditure data, thus it may be suitable as an interim measure of energy poverty in countries that lack a comprehensive house condition survey. Secondly, at the European level there are no standardised microdata concerning household energy expenditure or house conditions (Thomson and Snell, 2013), and so by using consensual indi- 110 DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU DEFINITIONS AND INDICATORS OF ENERGY POVERTY ACROSS THE EU 111

Understanding Fuel Poverty - CARDI
Fuel Poverty Strategy publication - South Ayrshire Council
Handbook on Poverty and Inequality - ISBN: 9780821376133
A review of Fuel Poverty and Low Income Housing, 2002
Energy Poverty
UK Fuel Poverty Monitor
London’s Poverty Profile 2015
Mapping Poverty - Combat Poverty Agency
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