A new definition of fuel poverty in Scotland: review of recent evidence
A report by a panel of independent experts who conducted a review of the definition of fuel poverty in Scotland.
Chapter 3 Fuel poverty and vulnerability
In Chapter 2 we introduced the term 'energy vulnerability', which has become part of recent discussions about the experiences of people affected by fuel poverty. In this Chapter we examine the sometimes confusing ways this term has been used, and make recommendations about how it might be most accurately used as part of a revision to the Scottish definition of fuel poverty.
3.1. Vulnerability in energy policy contexts
In EU policies related to fuel poverty, there is no common definition of vulnerability. Each Member State is required to define what they mean by the term 'vulnerable'. The EU gave guidance on how Member States should capture the concept as follows:
'In this context, each Member State shall define the concept of vulnerable customers which may refer to energy poverty and, inter alia, to the prohibition of disconnection of electricity (gas) to such customers in critical times' ( EU, 2009).
The guidance treats vulnerability as a by-product of European energy markets, and defines those unable to pay as 'vulnerable customers' who need additional protections. Each EU Member State can then use its own particular definition of the vulnerable customer, with more than a dozen different definitions currently in play. The British energy markets regulator, Ofgem (2013), submitted the following definition to the EU:
' Ofgem have defined vulnerability as when a consumer's personal circumstances and characteristics combine with aspects of the market to create situations where he or she is:
- significantly less able than a typical consumer to protect or represent his or her interests in the energy market; and/or
- significantly more likely than a typical consumer to suffer detriment, or that detriment is likely to be more substantial.'
In an energy market, consumer protection is a necessary part of fuel poverty remediation, but it is not a sufficient means to end fuel poverty (Pye and Dobbins, 2015), particularly when the intention is to treat this as a matter of social justice, rather than market access alone.
3.2. Understandings of vulnerability in fuel poverty strategies
In the more specific sphere of fuel poverty strategies and practices, the term vulnerability is also used in several different ways.
3.2.1. Who is vulnerable to being fuel poor?
Here, the term refers to the types of people or households who are most likely to be in fuel poverty - people or households that are vulnerable to it, in other words. Hence, for example:
'Deprivation is high also among young people and students who regularly live in houses of multiple occupation, but are rarely recognised as a group vulnerable to fuel poverty (Bouzarovski et al., 2013). The same could be said of migrants, homeless people, and asylum seekers.' (Cauvain & Bouzarovski, 2013).
In this context, objections have been raised against this use of the term, since it assigns a label or status to people and may imply that this state of risk is immutable, rather than remediable. On the contrary, it is argued, people should be seen as being 'in vulnerable positions', often through no fault of their own:
' We must recognise that the policies and practices of service and product suppliers in different markets can heavily influence the choices available, the decisions people make and the extent to which people are in vulnerable positions. People, for example, may 'choose' more expensive energy tariffs, loan or purchase deals because it is the only real option available for them. Similarly people may be put into vulnerable positions because they do not have the confidence - or power - to negotiate affordable deals if they get into debt.' (Stearn, 2012).
3.2.2. Energy vulnerability in a capabilities framework
Here 'vulnerability' is broadly defined as a lack of the skills and capacities required by households in order to avoid the risks and adverse effects of fuel poverty. This approach draws heavily on the capabilities framework of Sen & Nussbaum (1993). A seminal paper published in 2016 by Day, Walker and Simcock states that:
' Promoting capabilities maximises opportunities, but leaves the individual free to decide what kind of life they value…development programmes should be aiming to increase the capabilities of individuals, and should be evaluated in these terms.'
The capabilities framework is translated in the work of Thomson, Bouzarovski & Snell (2017) into 6 contributors to household energy vulnerability, which encompass both market access and wider health and welfare. Each contributor has a subset of metrics that could be used in assessing the severity of national fuel poverty and who is most in need:
- access i.e. a household's access to energy markets, including choice and competition amongst suppliers;
- affordability, encompassing not only modelled energy costs for particular types of house, but also self-perceived affordability and energy debt;
- flexibility i.e. a household's capacity to manage complex local/national energy infrastructures, smart metering and supply contracts and to engage in switching suppliers, tariffs, etc;
- energy efficiency, encompassing not only the customary House Condition Survey data, but also the energy efficiency status of appliances, and self-assessments of the extent to which the building fabric and design supports a household's daily routines;
- needs, particularly as these relate to health, other forms of personal vulnerability and thermal comfort;
- practices, encompassing energy rationing, self-disconnection, and experienced control over energy use.
Hence, a household which has a required energy cost three times the median, but which is experienced in tariff-switching, finding the best supplier on an annual basis, and has adopted a range of energy-saving routines already has some of the necessary capabilities to reduce the impacts of their high energy costs. By contrast, a household with little or no experience of engaging with suppliers, and only limited knowledge of how energy can be saved in their home is more vulnerable to the impacts of fuel poverty. The latter could, it is argued, be deemed in greater need of assistance. Under the current UK definitions (Boardman and LIHC), none of these factors are taken into consideration when estimating severity of fuel poverty and who is most in need.
This emphasis on vulnerability as lack of capabilities strengthens the rationale for widening the types of measures which government schemes deploy in their efforts to alleviate fuel poverty. These go well beyond household heating and insulation measures, and include:
- energy efficiency advice and support;
- installation of innovative energy efficiency devices;
- support for using these;
- support in managing energy debts, understanding bills and switching suppliers/tariffs;
- ongoing help in monitoring energy deals;
- advice on appliance purchasing.
In Scotland particularly, where such services have been provided within local communities (supported by local authorities, community organisations and/or national energy agencies), they have been found to maximise both a household's sense of agency and control over their bills, and neighbourhood empowerment (Darby, 2017).
On a more pragmatic note, it is doubtful whether current data in Scotland have the capacity to produce adequate metrics for these 6 contributors to fuel poverty. At least in the medium term, they serve as an important reminder of the value which can be derived from enhancing a household's capabilities and confidence in managing their energy bills, particularly when this begins as part of an integral package of remedial measures, and then continues with support for the household long after measures have been installed.
3.2.3. Health vulnerabilities - fuel poverty's adverse effects on health and wellbeing
Here, vulnerability refers to those individuals who are most susceptible to adverse health effects associated with living in fuel poverty - usually the aged, very young, infirm and disabled. Cold homes are a potential determinant of future ill health as well as being an exacerbating factor in current illness and disease. In 2015, NICE published guidance concerned with preventing excess winter deaths and illnesses associated with cold homes in England. This has perhaps the most explicit definition of health-related vulnerability:
' A wide range of people are vulnerable to the cold. This is either because of: a medical condition, such as heart disease; a disability that, for instance, stops people moving around to keep warm, or makes them more likely to develop chest infections; or personal circumstances, such as being unable to afford to keep warm enough. In this pathway, the term vulnerable refers to a number of different groups including:
- people with cardiovascular conditions
- people with respiratory conditions (in particular, chronic obstructive pulmonary disease and childhood asthma)
- people with mental health conditions
- people with disabilities
- older people (65 and older)
- households with young children (from new-born to school age)
- pregnant women
- people on a low income.'
The Scottish Public Health Network ( ScotPHN 2016) also identifies those vulnerable to health damage from poor housing. The key groups are pre-school children, older people, those with long term illness, pregnant women and disabled people, many of whom spend more time at home. Risk of winter - or cold-related mortality and morbidity increases with age, particularly for cardio-respiratory illnesses, and particularly among those aged 85 and over (Milner et al, 2014). Among children, the percentage with respiratory problems increases with number of years in poorly heated homes. People living with one or more of the major diseases - cardiovascular and respiratory, mental ill health and conditions such as cancer - are also more likely to be vulnerable to the effects of cold homes regardless of age.
It is important to note that reliable results concerning impacts of fuel poverty on illness and disability are derived from major national studies, each with samples of at least 2,000 homes and carried out using rigorous scientific trial methodologies (Liddell & Morris, 2010). For any local authority or charitable group aiming to evaluate smaller scale retrofit programmes in their area, impacts on chronic illnesses such as COPD or asthma are unlikely to be readily found - these sorts of impacts tend to be small but significant impacts, detectable only when large samples are drawn.
But other impacts are more readily detectable with smaller samples. Here, recent consensus has emerged around the likelihood that the primary health benefits of alleviating fuel poverty are on mental rather than physical health (at least in the first 12 months post-retrofit). Such findings may support the idea that - at the very least - fuel poverty imposes burdens of hardship, discomfort and stress, since these burdens all show robust causal pathways to poor mental health and wellbeing (e.g. Liddell & Guiney, 2015). Evaluations using outcomes such as wellbeing, perceived control over energy bills, attitudes to the home, and thermal comfort have provided a strong evidence base from which smaller scale interventions can be assessed. The most recently published example of this approach can be found in the health and wellbeing outcomes associated with Arbed, a major fuel poverty programme in Wales (Grey et al., 2017). We use similar types of outcomes in Chapter 7, where we compare some alternative definitions of fuel poverty in terms of how they correlate with adverse outcomes.
Relevant health conditions where additional data may eventually be needed to ensure that a fuel poverty definition is not wrongly excluding individuals whose energy costs are higher because of long term illness and disability may be as follows (Hodges et al., 2016):
- Cardiovascular and respiratory conditions;
- Neurological conditions (including dementia, Parkinson's disease, multiple sclerosis, epilepsy etc.);
- Musculoskeletal conditions (incl. Osteoarthritis, Rheumatoid Arthritis etc.);
- Blood disorders (incl. Sickle Cell Disease, Thalassemia etc.);
- Psychiatric and mental health;
- Disabilities (consequences of physical, cognitive, mental, sensory, emotional, or developmental impairment, or some combination of these).
It is noteworthy that the list produced by Hodges and colleagues includes conditions that are not encompassed in the NICE Guidelines, and also excludes some conditions in the Guidelines. In particular, age is not seen as a proxy for vulnerability in the list published by Hodges and colleagues, whereas the NICE Guidelines stipulate an age threshold of 65 years above which people are automatically considered to be vulnerable to the health impacts of cold and damp homes. As will be seen in Chapter 5, the World Health Organisation concurs with NICE's view.
However, in the context of an increasingly healthy and active older population, it could be argued that age per se is not a particularly useful criterion for classifying people as vulnerable to cold-related health impacts. In the absence of any long-term ill health or disability, the Panel took the view that age should not become a proxy for vulnerability, until a much older age than is presently used as a threshold in Scotland (which is 60 years). A threshold nearer 75 to 80 years might be more appropriate; however the setting of an age threshold was considered a matter for public health experts in Scotland, rather than for the Panel, a point to which we return later in this Chapter.
3.3 Using health vulnerabilities in how fuel poverty is defined
Any revised definition of fuel poverty may unintentionally exclude some individuals who, by virtue of age, health or disability are particularly vulnerable to effects of cold homes. This may happen if for example their income is marginally above the level at which they would be defined as fuel poor, in relation to required energy costs. Such individuals may lack the capabilities, interest and financial means to manage energy efficiency, heating and appliance upgrades. Problems would be exacerbated when poor health or disability limit the person's ability to decide what work is needed in order to achieve the intended benefits, to manage potentially complex and disruptive projects, to monitor the quality and price of the work, and to make best use of improved heating and electric appliances afterwards. The challenge is to represent those vulnerable individuals accurately, not only in practice, but in the definition itself. Here too, the Panel thought that expert adjudication was needed.
3.4. Incorporating adequate vulnerability criteria into a definition of fuel poverty: Recommendations for further development
In Chapter 2 we noted that a revised fuel poverty definition and subsequent strategy should include a combination of objective and consensus-based metrics. This is likely to point to greater diversity of causes and consequences of fuel poverty, and to suggest a wider range of potential tools and services for alleviation than previously acknowledged.
We recommend that an important dimension of such a definition is inclusion of appropriate vulnerability criteria for Scotland, relating particularly to age (both with respect to young children and older people), long term illness (whether physical or mental) and/or disability. When the concept of vulnerability is brought into the context of health, highlighting the extent to which living in fuel poverty can be a factor in causing or worsening disease and ill health, it can be a useful tool for prioritising scarce resources.
In our consultations with stakeholders, the value of an underpinning principle of vulnerability in a revised definition was supported, but viewed as potentially complex to implement. At present there is no consensual set of criteria for assessing health-related vulnerability in relation to fuel poverty, although we have noted in this Chapter that a range of public health evidence identifies broad disease, disability and age groups. We recommend therefore a further stage of work on vulnerability criteria, which should be done by a specialist group with representatives from public health, local health and social care partnerships and the social security team.
The terms of reference should be narrow, so that the group confines its deliberations to the issues related to vulnerability as these affect a definition of fuel poverty. The work should be undertaken as an integral, focused, component of the planned Government consultation. In Chapters 7 and 8 the Review Panel has set out the working assumptions made in relation to age groups, long term ill health and disabilities, and the resulting adjustments made to recommended indoor temperatures and Minimum Income Standards. The additional work of the practitioner group should test the validity and robustness of these assumptions, consider their connectivity with vulnerability criteria used in other domains of Scotland's social security strategy, and recommend a set of vulnerability criteria, and consequent adjustments to income standards and/or energy needs, to be used in the context of fuel poverty.
A range of definitions of vulnerability already exist, including in development of Scotland's Social Security strategy, and these strands of work need to be aligned. Fuel poverty will then retain its significance as a problem in which its health impacts are understood, and tackled, in relation to low income, energy prices, and household energy use.
Health vulnerabilities need to be incorporated into a fuel poverty definition in relation to increased need for energy at home, leading to higher required energy costs, and likely need for a higher minimum income standard.
These costs may stem from a range of additional energy needs, for example:
- necessity for a warmer home for longer periods;
- additional hot water;
- use of electrical equipment as part of health care support for independent living.
At the same time, some vulnerable groups may also incur additional unavoidable expenditure on non-fuel items, such as transport costs (e.g. need for taxis to attend hospital appointments as a result of limited mobility) or food (e.g. if require a special diabetic diet) (Fitzpatrick et al, 2016). This means that the minimum residual income that they require after housing and fuel expenditure is deducted may have to be higher than for non-vulnerable households.
The relevant cost factors need to be defined and tested to produce suitable metrics for a range of required energy costs and/or minimum income standards. Which factors should be incorporated into a minimum income standard, and which into required energy costs for which groups, needs to be agreed. As part of this, a consensus is also needed on the recommended indoor temperatures and periods of heating for different long term illnesses and disabilities, and age groups (particularly young children and frail elderly).
Inclusion of these factors in the definition makes it less likely that vulnerable people will be falsely excluded from an eligibility group; conversely, they make it more likely that fuel poverty prevalence will include a large proportion of people whose status is deemed vulnerable.
Once the issues related to the definition are dealt with, scope will be needed for development of an effective strategy, which can be implemented at local scale, for example by local authorities, community groups, and health and social care partners. As part of strategy development, it is necessary to consider not just the energy efficiency of housing, but the constrained capabilities  of vulnerable groups to manage energy use, energy appliances and bills, or improvements to thermal comfort. While those living on low incomes with long term poor health or disability are frequently highly resourceful and resilient, services and resources responsive to their needs can considerably improve their circumstances, sense of autonomy and control, as well as their participation in social and community networks.
In strategy development, consideration also needs to be given to the risk that a revised fuel poverty definition may exclude some people at the margins of eligibility, by virtue of their income in relation to required energy costs. Poor health, disabilities, age or other life circumstances may mean, however, that they lack capacity and capabilities to manage energy efficiency, heating and appliance upgrades for their home, rendering them susceptible to future experience of fuel poverty and further adverse outcomes. Local services are critical to identifying people in this situation and to prevent them from falling into fuel poverty. Telephone advice, or even a home visit and report of recommended action are insufficient in many cases, because home energy efficiency projects are often complex to manage, disruptive of home routines and there may be no easy access to trusted local suppliers and quality guarantees. The affordability of the work relative to its subsequent value for quality of life can be hard to assess, and people may also lack understanding of how to use improved heating and electric appliances afterwards. Health records and knowledge from community health and social care partnerships could be used to identify those who are not, technically, fuel poor. Appropriate local services then need to be created. Such services are likely to be similar to those services for people in fuel poverty,  which are designed to provide direct support to people to improve the comfort and use of their home, and to meet the standards set by the forthcoming Scotland's Energy Efficiency Programme ( SEEP).
The term vulnerability has been used in many different contexts, and has different meanings in each of them. The EU's directive to Member States, advising them to each construct their own definition of vulnerability in energy markets has focused on advocacy of additional protections for vulnerable consumers, but has not addressed the wider structural causes of low incomes and relative poverty and resulting needs. Nor has the use of the term as another word denoting the likelihood of people being in fuel poverty proved productive, since this is arguably just an unnecessary synonym for prevalence.
However, where the concept of vulnerability is brought into the context of health, highlighting the extent to which living in fuel poverty can be a factor in causing or worsening disease and ill health, it can be a useful tool for targeting and prioritising scarce resources. It also helps ensure that tackling fuel poverty is not subsumed into a programme for energy efficiency in housing, but retains its significance as a problem in which health impacts stem directly from low income, energy prices, and household energy use. This means that policies to address poverty, social justice and health, as well as housing, are all implicated in solutions.
Furthermore, where vulnerability is captured within a capabilities framework, it legitimises a range of additional solutions and tools for alleviating fuel poverty, all of which have to do with providing people with the capacities and skills they need to build energy resilience.
Key Conclusions on vulnerability
The Panel did not consider it appropriate that the term 'vulnerability' should be used as a synonym for prevalence.
However, it saw an important role for the convention of vulnerability being conceptualised in a capabilities framework. This gave special status to people who had, for example, only limited opportunities to develop problem-solving skills around tariff-switching, or who were not confident in making application for support, etc. However the term 'vulnerable' was not considered to be especially apt in describing this group, not least of all because the assistance this group might require was rather more specific than the term 'vulnerable' implied.
The most appropriate use of the term 'vulnerability' was thought to be related to health risks, such that people most likely to experience the adverse health and mental wellbeing outcomes associated with fuel poverty were deemed to be vulnerable.
The Panel thought that, in the context of an increasingly healthy and active older population, age per se is not a particularly useful criterion for classifying people as vulnerable to cold-related health impacts. In the absence of any long-term ill health or disability, the Panel took the view that age should not become a proxy for vulnerability, until a much older age than is presently used as a threshold in Scotland (which is 60 years). A threshold nearer 75 to 80 years might be more appropriate.
Precisely whose health was most likely to be vulnerable, and how vulnerabilities might be prioritised in terms of Scotland's future fuel poverty strategies remained a matter for debate, and the Panel recommended further expert assessment of this issue. The recent (2015) NICE Guidelines for England (which deal with health risks associated with living in cold homes), and the Scottish Public Health Network's 2016 Guidance on this matter, were thought to be useful potential starting points for further refinement of the term.
Given multiple uncertainties in this regard, the Panel recommended that a small independent group of Scottish public health experts be invited to develop a specific list of health and disability categories, as well as age bands, which would satisfactorily encompass the term " vulnerable to the adverse health and wellbeing impacts of living in fuel poverty". This matter was beyond the scope of the present Panel's expertise.
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