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Working Paper 18-11

Comparing English Fuel Poverty Rates: Reported vs Modelled Expenditure

AUTHORS: Deller D & Waddams Price C

ABSTRACT: Since the early 2000s annual statistics on fuel poverty in England have been published by the UK government. These statistics are based on a model of household’s energy expenditures (ENEX) incorporating an engineering model of the quantity of energy required to heat a dwelling to a specified temperature. Concern has been raised that households facing affordability difficulties often spend less than the ‘required’ amount, so that calculations based on their self-reported energy expenditure may underestimate the extent of fuel poverty. We compare official fuel poverty rates based on the engineering model with those based on consumers’ self-reported ENEX from the Living Costs and Food Survey (LCF). Comparisons, using both the 10% and Low-Income High-Cost fuel poverty metrics, are provided for different household groups over the period 2003-04 to 2014.We find that self-reported ENEX does not always under-report fuel poverty relative to modelled ENEX, since whether or not the headline fuel poverty rate is higher using reported or modelled ENEX varies between years. In particular, reported ENEX fuel poverty rates exceed modelled ENEX fuel poverty rates for social housing tenants in all the years where comparison is possible. This finding is significant because social housing dwellings generally have higher than average energy efficiency ratings, and so modelled energy expenditure is likely to be low compared to other tenancy types. We also find that comparisons made previously were likely to be affected by a significant measurement issue in the LCF, which led to ENEX in prepayment meter households being under-estimated. Overall, the comparisons reflect the foundation of the official English fuel poverty statistics on a model, and the dependence of these statistics on the characteristics of this underlying model. To gain further insight on the issues we discuss, and to enable a definitive assessment of the modelling behind the official fuel poverty statistics, we recommend that questions recording households’ reported ENEX are reintroduced into the English Housing Survey.

CITATION: Deller D & Waddams Price C (2018) 'Comparing English Fuel Poverty Rates: Reported vs Modelled Expenditure', CCP Working Paper 18-11

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