Y Pwyllgor Newid Hinsawdd, Amgylchedd a Materion Gwledig - Y Bumed Senedd

Climate Change, Environment and Rural Affairs Committee - Fifth Senedd


Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Andrew R.T. Davies
Jack Sargeant Yn dirprwyo ar ran Joyce Watson
Substitute for Joyce Watson
Jenny Rathbone
Llyr Gruffydd
Mike Hedges Cadeirydd y Pwyllgor
Committee Chair
Neil Hamilton

Y rhai eraill a oedd yn bresennol

Others in Attendance

Christine Wheeler Pennaeth Datgarboneiddio ac Ynni, Llywodraeth Cymru
Head of Decarbonisation and Energy, Welsh Government
Julie James Y Gweinidog Tai a Llywodraeth Leol
Minister for Housing and Local Government
Lesley Griffiths Gweinidog yr Amgylchedd, Ynni a Materion Gwledig
Minister for Environment, Energy and Rural Affairs
Lisa Dobbins Pennaeth Datgarboneiddio Tai, Llywodraeth Cymru
Head of Housing Cecarbonisation, Welsh Government
Stephen Chamberlain Tîm Effeithlonrwydd Ynni Domestig a Thlodi Tanwydd, Llywodraeth Cymru
Domestic Energy Efficiency and Fuel Poverty Team, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Andrea Storer Dirprwy Glerc
Deputy Clerk
Emily Williams Ymchwilydd
Marc Wyn Jones Clerc

Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.

The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.

Dechreuodd y cyfarfod am 09:17.

The meeting began at 09:17.

1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau
1. Introductions, apologies, substitutions and declarations of interest

Bore da. Good morning. Can I welcome Members to the meeting? Apologies have been received from Joyce Watson AM, for whom Jack Sargeant AM will be substituting. Are there any interests that Members wish to declare?

2. Tlodi Tanwydd—Sesiwn graffu ar Dlodi Tanwydd gyda Gweinidog yr Amgylchedd, Ynni a Materion Gwledig a’r Gweinidog Tai a Llywodraeth Leol
2. Fuel Poverty—Scrutiny of the Minister for Environment, Energy and Rural Affairs and the Minister for Housing and Local Government

Can we move on then to the main part of this meeting—the scrutiny session on fuel poverty with the Minister for Environment, Energy and Rural Affairs and the Minister for Housing and Local Government? Can I welcome to the meeting Lesley Griffiths, the Assembly Member and Minister for environment, and Julie James, Assembly Member and Minister for Housing and Local Government? Would you like to introduce your officials, or would they like to introduce themselves?

I think they can introduce themselves.

My name is Christine Wheeler. I'm deputy director for energy and climate change with the Welsh Government.

Good morning. I'm Steve Chamberlain. I'm the senior policy adviser on fuel poverty for the Welsh Government.

And I'm Lisa Dobbins. I'm the head of housing decarbonisation in homes and places, working for the Minister.

Thank you and welcome. Are you ready to move straight to questions? If I can start, the Welsh Government had a policy of ending fuel poverty by 2018, but that got derailed by the problems we had with the economy around about 2009. An awful lot of plans failed around then. But can you outline the targets that the Welsh Government is currently working towards on fuel poverty? Given that the 2018 deadline has passed, what are we trying to achieve now?

You're quite right, we did fail to meet our statutory target, and there were, I think, a variety of reasons. You alluded to, obviously, the global economy crisis. I also think, on reflection, and now that we're working on new targets, that perhaps the target was a bit ambitious. I think targets should be ambitious, but they also have to be realistic, and maybe it was a little bit too optimistic. I think that's also been recognised in the Wales Audit Office report, which we're currently—. We've been looking at that to help us with the new fuel poverty strategy. Obviously, this inquiry, I think, will help us also.

We're still working on that 2010 strategy now, and, until our new fuel poverty strategy is in place, we will continue to work on that one. I'm hoping to be out to consultation very soon. I'd like to do it by the end of February. It's well on target for that.

What we need to be looking at is how—. We need to eradicate severe fuel poverty, we need to stop people dropping into fuel poverty, we need to look at targets around persistent fuel poverty, and we need to greatly reduce fuel poverty, so I think there'll be a variety of targets within the new strategy.


Thank you. Have you got a formal mechanism to enable stakeholders to input into policy development on fuel poverty?

So, yes, we work with stakeholders. We work in partnership with local authorities. One of the things I did last year, which I'm not sure we'd done before—I went to the cross-party fuel poverty group that's chaired by Mark Isherwood and spoke with a lot of stakeholders there who thought that one of the things we could helpfully do was have a round-table. So, I think I chaired it—I certainly went to it—and we had a variety of stakeholders. I remember the future generations commissioner was there; there were many representatives from the third sector—Age Cymru, Care and Repair, and those sorts of organisations. And I know officials have continued to engage with those organisations and individuals.

We also need to be working with people such as the Gas and Electricity Markets Authority. So, I know, again, the energy sector itself—officials engage with the energy sector. But there is a huge amount of work that we've done with our stakeholders, and they've really helped us bring forward our new fuel poverty strategy.

I'm just wondering if you could explain a little bit to me about how you evaluate progress against delivery on your current strategy—the 2010-20 strategy, which you've just said is the one that's still live in your minds, really—and maybe describe any changes that you've implemented as part, or as a result, of that sort of evaluation process. 

So, I mentioned the Wales Audit Office, the landscape review. That, I think, has been invaluable, really, as we've assessed performance against the targets and the actions that were set out in the 2010 strategy. Again, I think any recommendations that come forward from this committee's report will help us also.

The 2010 strategy has been kept under continuous monitoring and review by officials. There was one just before I came into portfolio—I think at the beginning of 2016. That did, then, lead to changes that were implemented in the scheme, probably about 2018. There was also a further review last year, and that has, again, helped us as we're going forward to the next strategy. There are some proposals that came forward from that review that have helped us with the new strategy.

We've had the publication of fuel poverty estimates, so, again, that's helped us against the targets. We've also had an expansion of support available through the Nest scheme health conditions pilot. So, that came into being, I think, in July of last year. That's due to finish—is that at the end of March, Steve?

Yes, the current scheme is due to end at the end of March.

The current scheme. So, we'll reflect on that and have a look if we need to extend that. But I think that was probably one of the major differences from the continual monitoring and review.

Okay, because one thing that hasn't changed, of course, is the definition of fuel poverty. I know we've heard evidence about how other parts of the UK have decided to amend or refine their definitions, so could you tell us a bit about any thoughts that you have around where we are with the definition and whether there are any plans to refine it or change it?

So, one of the questions we'll ask in the consultation will be: should there be a change of definition? As you say, the UK Government are doing it for England and the Scottish Government are doing it in Scotland, so that will, obviously, be a question that we will ask. I think we need to ask that question. How fuel poverty is measured—I think that's another important question that will help us with the new strategy.

Yes, okay, because in evidence we've received I'm feeling that there's a bit of a tension, and I'm sure that's why you're consulting on it and maybe that's why we haven't changed the definition in Wales, around refining it to something that's a bit more savvy—you know, that takes into account residual income and all of these kinds of things, really. But also there's been a bit of a pushback that I've picked up on, which I hadn't picked up on previously, in that people have been saying, 'Well, the more complex the definition, the more difficult it is for people to identify themselves as being fuel poor'. So, you recognise that tension and that's very much part of your consideration, is it? 

Yes, absolutely. I think you're right, aren't you? If you've got some very complex way of recognising that you're actually in that group, then you're not—. Some of these people are really hard to reach anyway, so I think we need to make it as simple as possible. So, we can certainly look at what England and Scotland have done, but I think it's really important that that question is in the consultation.

Okay. So, you're actively considering the definition, so it may change—or not; we'll have to wait and see. You mentioned those living in severe fuel poverty as one of those areas that you really need to home in on, and I'm wondering maybe whether you could explain to us how the Government has focused—and I'm quoting here—

'funding and support on households most likely to be in severe fuel poverty'

given that that, of course, was one of the priorities of the 2010 strategy.


So, we need to use the best available evidence that we possibly have around this. So, we looked for support from our scheme managers for both Nest and Arbed. We looked to energy suppliers, local authorities, third sector partners—we need everybody to come together, really, to use everybody's efforts to reach and help people living in fuel poverty, and particularly severe fuel poverty. We use our knowledge and analytic services. They are responsible for preparing the fuel poverty estimates and the analysis that we have. So, through the Warm Homes programmes we focus on people living on means-tested benefits living in homes with the lowest energy-efficiency ratings. So, that's been our target. We know that people living with these characteristics are more likely to be living in fuel poverty, and we also use the Welsh index of multiple deprivation. However, there is a bit of a conflict there. So, if you look at the index, it suggests that lower levels of multiple deprivation are evident in rural and western areas of Wales, but our fuel poverty data suggests people living in those areas are more likely to be living in fuel poverty, so there's a bit of a conflict there. 

I think we need better data. Obviously, you can only work on what you've got, but I do think we need to get some better data. Again, that will be part of the new plan—how we access that better evidence and data. 

Okay. You know that I've raised on a number of occasions concerns about the scale of Arbed and Nest. Clearly, they're valuable for what they are, although I know there are questions around what they're achieving to come later on. But I'm just wondering, really—when we look at some of the figures, it's 3,800 households received a home energy improvement package under Nest, 145 properties benefited from Arbed in 2018-19, but of course, during the same period, we know that 155,000 households were living in fuel poverty in Wales. So, what do you say to people who say that, as valuable as these are, frankly, it's wholly inadequate?

I think—you know, we can only work with what we have financially. And also—I think we have to recognise that we have improved 55,000 homes since 2011, but it is about striking the balance between the funding we've got available and our efforts to help as many as possible. We've got to take into account also that there are other schemes that have helped us in this way. So, we've got the UK Government scheme, such as the energy company obligation scheme. That suggests 15,000 homes annually have benefited from home energy efficiency improvements since that was launched back in 2013, so, obviously, a percentage of that will be in Wales. Julie's department—

The Welsh housing quality standard.

Obviously, the Welsh housing quality standard—we've improved a significant number of homes with that. I think it's reasonable to expect that, through that piece of work, there are a number of homes that will have benefited in relation to energy efficiency also. We do need further investment, and particularly to support lower-income households, so I don't underestimate the scale of the work; it is absolutely huge. But I hope that we will continue to reach out to a significant number of homes.

So, to what extent is the new strategy looking beyond Nest and Arbed and into new areas of potential funding, or more creative ways of leveraging funds from all sorts of sectors? One suggestion that's been made previously around the land transaction tax was that, if you improved the efficiency rating, before selling the house, to a certain level then you'd receive some sort of relief, or even not have to pay it at all. Or, alternatively, if you bought a house that wasn't up to standard and that, within a certain window of, maybe, two years, you brought it up to that standard, you would get a rebate. Are those kinds of things in the mix, or are you just looking at fuel poverty in and of itself?

It's part of the decarbonisation agenda as well, so they're crossing across each other. A large part of what you just said there, Chris Jofeh's group is looking at. So whilst we're concentrating in that group on decarbonisation, obviously one of the things that you do with decarbonisation is increase thermal insulation and efficiency, and so it has an effect on fuel poverty. Though it's not—. They're just crossing across each other. So, one of the things the group is going to be looking at is how we bring those together and make sure that they mesh. 


Yes, because, if there is a strategy, then obviously there will be targets and outcomes, and those will need to be funded and then that's where these other projects come in and—

So, there is an issue around us working across the Government via Chris Jofeh's group. Later on, I expect you're going to be asking me about some of the stuff we're doing for new builds and so on, and obviously that, although it's not aimed at fuel poverty, it's aimed at decarbonisation, will of course have—

Because the Part L stuff all feeds in as well, yes. Yes. Okay. Okay. Fine.

So, finally from me then, Chair, if I may: are you thinking about primary legislation, in terms of where we go on this, ultimately? Because we know Scotland have legislated, really, with targets and a requirement for strategies and reporting. Is that the kind of approach that you think you'll eventually end up with? 

So, I wouldn't say we've given primary legislation any formal consideration. However, I think if there's compelling evidence that we need to do that, it's certainly something I would be very happy to look at. But I wouldn't say we've given it formal consideration at the moment. 

And also, of course, we're doing the decarbonisation. We were just talking about it in Plenary the other day, weren't we? If you remember, David Melding brought forward his legislative proposal and what we were saying was that we're responding to that through Part L. So, legislation in its wider sense but not necessarily primary legislation, because that's obviously regulations. 

Okay. So, you don't see primary legislation as a necessity to drive this—

Not at the moment, and the targets that we're going to be proposing in the new strategy and, obviously, the consultation, I think they'll have the same effect as any Act we could bring forward, really.  

Thank you, Chair. I'll continue with questions for the Minister for environment and energy. Minister, you've stated in written evidence to the committee that one of the areas the Government has been focused on has been helping people make more informed decisions on energy to lower their bills. Can you just explain a bit more to the committee what the Government has been doing on that?

So, we have our Nest helpline, which you'll be aware of. That provides advice on improving home energy efficiency, how to reduce domestic fuel bills through switching—and I think that's an area where we have made some real improvements, because I think people have quite often been reluctant to switch. We've given advice on tariffs; how you can improve your tariff. The latest figures I've got were for 2018-19. Nest reported that more than 3,000 people have been signposted to Uswitch, which is a UK Government-backed energy switching service. We don't have any evidence on how many of the people referred to Uswitch acted on the advice they've had from Nest, but I think it's safe to say that, if you've been signposted by Nest, if you've taken the trouble to contact Nest in the first place, you tend to take the advice. 

I think we need to look at how we improve the availability of advice and in-home support, especially to vulnerable people and people who are less engaged with the energy market. So, I think we do need to improve there and, hopefully, the new strategy will do that. 

Thank you for that. Just picking up on some of the rural areas, really, how is the Welsh Government working to reduce reliance on expensive fuels, such as oil? And what affordable heating options are available to those households that are not suitable for connection to a mains gas line?

Clearly, oil remains one of the lowest cost fuels providing heating in off-grid areas, but of course it undermines what we're trying to do on the decarbonisation of our housing stock. Clearly, there's a tension between those two things and we need to look at our spending caps, and that's why the spending caps are more generous for off-grid areas. So, you'll be aware that, in off-grid areas, the spending cap is £12,000, whereas, on-grid, it's £5,000. Also, we have some flexibility. So, if we need to look at giving more funding, we can do that. We've got the ability to be able to do that. 

It's really limited—the number of choices for off-grid are limited. So, if you look at electricity, for instance, whilst that's probably efficient, it's really expensive, comparatively, to run, especially in homes that are less thermally efficient. We can look at wall insulation, external or solid wall insulation; again, it's costly, but we know it's effective. So, that's another area where we can make improvements. 


Can I just pursue this idea that maybe the options are limited in rural areas that are off-gas? Because there seems to be—. From the witnesses we've heard from, there seems to be very little focus on alternative ways of heating homes that are off-gas, like air-source heat pumps, ground-source heat pumps. In a rural area, obviously, there's bags of land available, generally, to do that sort of thing, and they don't seem to be pursuing that with vigour. So, I just wondered if you could say a little big about that.

Well, I think, clearly, technology moves, doesn't it, and there will be more alternatives? So, if you think about solar photovoltaic, for instance, battery storage technology, and, as you mentioned, pumps; there are hybrid heat pumps as well. So, I think, as we see more technologies, that will help. But looking back over the last few years, I think this is an area where it has been much more limited. 

But I'm surprised that people whose day job it is to either work in the energy sector, or work in the warmer homes schemes—there really wasn't that level of awareness of just where we already are, as has been demonstrated by—[Inaudible.]

Yes, so I think we do need to make improvements there. I think, also, looking at a different part of my portfolio and the renewable energy targets—so if you think about the targets we've set for involvement of community projects, so small hydro projects, they've really helped. 

Also, part of the decarbonisation work that Chris Jofeh's group is doing is looking at the availability of those kinds of technologies. So, we've got a whole innovative housing programme going on, testing out quite a lot of those things.

One of the issues is that a lot of things are claimed for them, but we haven't actually got the evidence of whether they deliver a lot of what they say. And also, people who are used to living in houses that have a direct heat source, like a radiator, sometimes find it really difficult to shift to air source or ground-source heat pumps. So, there's a whole kind of 'living in this house' bit that goes with that, that people really need to—. So, we have had examples of people moving into the innovative housing programmes—houses heated in that way—who just can't get on with it, and don't like it all, and are asking for radiators to be fitted. 

Well, one of the innovative schemes I visited in Ely—nine dwellings—they had radiators. It was ground-source heat pumps supplemented by solar. 

There are lots of different kinds of technologies around, and what the innovative housing programme is doing is it's monitoring what was claimed for those programmes against what's actually delivered. And we're only in year 4 of that. So, one of the things we want to be able to do, in conjunction with Lesley's programmes and her consultations, is make sure that what we're basing our assumptions on has some empirical evidence backing it up. 

Just continuing on this theme, really, of rural issues. You've listed some of the specific challenges that people face in rural areas, being off-grid, and, of course, you don't have the density population to add economies of scale as well. And it has been suggested in evidence to us that maybe there should be a distinct or a separate rural stream to Arbed and Nest, in order to tailor the offer, if you like, and the pitch as well, in terms of that cultural change that we're talking about for some of these areas. I don't know whether that's something you're—

Certainly, the spending cap is kind of part of that, isn't it, and the fact that more funding goes in? But it's certainly something that we have considered, and we can continue to consider with the new strategy. 

I think we'll probably take the view of being informed by the Wales Audit Office review into the value for money of those schemes, to see if they're best placed and are best delivering value for the Welsh taxpayer. 

Well, if it's a numbers game, then those rural areas are never going to be touched, are they?

Okay. Andrew Davies has got a very short question on this now.

A short one, just to Julie, if I may, because I think you introduced a really important point there about behavioural change. It's a bit like electric. For some bizarre reason, people won't change electric. Even though they're paying a lot more for it, they'll stay on the standard tariff, they do. How much of an influence is that, trying to convince people that the measures that are being promoted under these schemes are of benefit to them, and they need to make that change? Or is there real stubborn, behavioural change when these schemes are being promoted in communities?

So, there's actually a standard curve for the adoption of new technologies that people can look at, that's been going back through human history. So, if you look at the swap from coal fires in every house to central heating, there's a curve for how the behaviour change worked. So, a lot of people had heating installed and still lit their fire every day because that's what they did. There's a really obvious curve.

Just as a complete aside for a minute, one of the reasons that we're having such problems with the broadband roll-out is because it's ahead of that curve. So, everybody estimated that that new technology take-up curve would be the same for broadband as it has been for every other technology, and, in fact, people are way ahead of it. So, they haven't put enough capacity in the cabinets because they assumed a 21 per cent take-up, and, actually, it's about 60 per cent. So, actually, you can see with the curve what we can project as people take it forward. What we need to do is make sure that the advice is there to match that curve, or just ahead of the curve.

The take-up of these technologies is no worse than it has been for when electricity came out, or telephones or central heating—it's about the same. It's really interesting to see the take-up curve. What we need to do is make sure that as the technology becomes more widely available, more people are helped to make that transition.

The other thing to say is that it's all very well to talk about all of these, but, actually, of course, we need to make sure that the industry is available to generate the numbers of ground and heat-source pumps and fans, and all the rest of it, and that, actually, we're not adding to our carbon footprint by importing them all from somewhere else and we're actually getting a home-grown industry. So, there are a couple of curves that we need to stay on top of, and that's why Chris Jofeh's group is looking at it in the round.


Isn't the second curve, though, the curve of take-up and the curve of price? They're reaching a certain stage—both new technologies are incredibly expensive when they first come in, so it's only the affluent or the very keen who have them. As the price comes down, more people take it up, and that's why broadband has gone outside the curve, because the increased cost of faster broadband is miniscule compared to the increased cost of providing very low cost but very expensive to install heating.

Yes, that's absolutely right. Also, there are other issues around what the Government does in terms of interfering in the market for the costs. So, the innovative housing programme, for example, has de-risked some of the technology installations, and, frankly, taken some of the cost out of it, so that we can get the evidence to look at what market we want to increase, whereas at the moment, for example, if you've tried to go out and buy—. It's worth doing it, just for interest—go and try and buy a ground-source heat pump or an air-source heat pump for your current home. The range of pricing and what people say it will do is just extraordinary. So, how you would choose that without any expert evidence or empirical evidence as to what they've actually delivered is a really big question for us. So, we're really relying on the IHP outcome data to be able to drive a lot of what we invest in as well.

Can I just follow up, just to make sure that what you're saying, Minister, and I think I've understood it correctly, is that, actually, the curve that you referred to is no different in the instance of fuel poverty and take-up of the technology to what you'd expect? I know you used the example of broadband, but I'd call that very new technology and complete behavioural change. So, the curves that you referred to are no different to other technology changes that have happened over the years.

It's about the same for these kinds of technologies, whereas, as I say, the broadband one shocked everyone—you could tell that. You'll all remember the Superfast Cymru conversations we used to have in lots of committees. We negotiated a contract with BT that gave us overage back after 21 per cent take-up, and that's because the standard technology uptake curve that they relied on showed them that 21 per cent of people would take up this new technology. In fact, it's more like 60 per cent, so we got—a technical term—shedloads of money back as a result of that to reinvest, because people wanted that technology a lot faster than a new technology normally rolls out.

Now, my understanding—I haven't looked at them in the last week, but my understanding from the IHP stuff is that the technology take-up for these kinds of heating is about the same, so about 21 per cent, projected forward, isn't it?

Yes, and I think that one of the reasons why the Jofeh report came up with a recommendation about social landlords was that, actually, there is an opportunity there to drive change, but in a controlled way as well, because, obviously, it's about making sure that the homes have the right technologies and about what tenants can deal with or are capable of. But there is an opportunity there, maybe, to drive some of that change in a way that we couldn't do it, perhaps, if we just focused on owner-occupiers, with whom it's a bit more spasmodic, and about—. So, we think—we hope—that we will get scale behind this as well, and that will help drive the industries and the prices.

We're turning back to you, Jack, after a long gap.

Thank you, Chair. Obviously, the 21 per cent take-up of new technologies, such as the heat pumps et cetera—clearly, there's a big gap of people there who are going to continue, for now, until we go right beyond the curve, to be still on oil and liquid petroleum gas. In 2010 the strategy said the Government would continue to encourage partners to call for a regulated market. Has there been any progress on that?


So, there has been some progress, but I am still concerned that consumers dependent on LPG and oil are not afforded the same safeguards as other larger regulated domestic energy suppliers. But there have been some reforms that have been introduced by the Competition and Markets Authority. So, that has approved the ability of consumers to shop around for a better energy supply, which wasn't there prior to that.

Thank you. I'll move on to the Minister for housing now, please. You mentioned earlier the Part L consultation, and I wonder if you'd like to comment a bit further on that, in particular including the proposal to introduce a household affordability rating. If you just want to comment a little bit more on that.

Yes. So, we've got a consultation that's going out later this year to consider a whole range of home-energy efficiency improvements alongside a whole other series of things around fire and all the rest of it that we're doing at the same time. And that consultation will, obviously, take into account fuel poverty. So, we don't want to do anything that interferes in the market that drives the price up for households in fuel poverty. But, obviously, it's mostly concerned with getting energy efficiency, which isn't the same thing necessarily. And then in doing that, what we'll be looking at is trying to keep the regulations so that they aren't over-prescriptive in terms of technology, because technology moves. So, there is quite a lobby out there of people who want us to say that you should do 'x technology' or 'y technology'. Actually, we're really keen not to do that. We're trying to get it to 'you must have this efficiency' because, actually, the technology is changing really rapidly. So, we don't want to find that we have to redo the regulations a year later because, actually, there's a new widget that nobody had thought of that is brilliant and isn't mentioned in our regulations.

So, we are trying to craft it so that we're talking about what the technology delivers. So, it's technology neutral, effectively, but it talks about what's delivered by the technology—actually, in the same way as we did the broadband roll-out, in fact. So, we didn't specify any technology, we just specified the speed. So, it'll be the same sort of approach.

Okay, thank you for that. On technology, I fully agree—it changes at a rapid pace, and we probably can't understand how quickly that is going to change, so there does need to be a way of introducing new technology as it comes.

But just keeping on the technology side, really, would you like to comment on the smart pay-as-you-go meters and devices, and whether the Government's view is that they offer a different solution to pre-payment services? We've heard in evidence that pre-payment meters actually take more than what people need. And, obviously, we're in a terrible time at the moment with austerity and people not having the money that they should have, and whether this offers a separate solution to that.

Well, the smart meters—. Sorry, I don't know which one of us is answering. [Laughter.] Both of us. It crosses across both our portfolios. Do you want me to go first?

So, we use the smart meters in the decarbonisation bit to find out what energy is being used when and to try and work out—. For example, we're encouraging social landlords to buy energy in a different way. So, buy it at the cheapest cost and stop the peak-demand purchase and so on, because what we're trying to do, obviously, is drive a particular behaviour in energy efficiency. And, obviously, that has an effect on fuel poverty, but it's not why we're doing it. We're obviously keeping a weather eye on what effect it has on that. But Lesley's more focused on the fuel poverty bit of it.

Yes. So, I think smart meters do provide many benefits for people around fuel poverty particularly. I met with the organisation—whose name escapes me—that's doing the roll-out of smart meters. We still need to do more to encourage people to have a smart meter installed. I think there's a bit of concern that they use far too much, as you say, or they're not trustworthy. I think we're getting there now with it, and I know that the number of smart meters we've got in Wales now is comparable to the average right across Great Britain, which, when I came into portfolio three and a half years ago, it wasn't—it wasn't anywhere near. So, we have managed to bring it up.

I think smart meters provide much more accurate bills. So, I think that's a massive benefit. Pre-payment customers can see when the credit's running low, so they can top it up before it runs out, which, again, is a matter of concern. You can do it remotely, which, again, might be helpful. You can see what energy you're using much clearer when you're in the house. So, I think there's also a potential for reduced bills if you reduce your consumption, and, I think, if you can see what you're using, that can have a positive effect there. But as I say, I think we do still need to do more to support the roll-out of smart meters. 


There was not much evidence when we were speaking to the two energy providers that they were targeting people on pre-payment meters for smart meters, because they're the ones who are most disadvantaged, paying the most, and you'd think—. They've got the data, they know where these people are. Is there anything that you could do by discussions with Ofgem?

Well, the organisation I met with—I can't remember what they were called. I don't know if anybody can remember. 

Smart DCC Ltd.

That's it. And that was something I raised with them. So, I think, as you say, they've got the data. They know where these people are, so it's much easier for them to target, and I think you will see an increase in that targeted contact.

And just to add, I don't know if the committee has taken evidence from any of the innovative housing programme projects, but we do have at least one—and, I think, it's two, off the top of my head—that is using smart purchase of energy in order to decrease the cost and increase the efficiency. So, I'm sure I can get officials to tell you where the particular projects are, and it might be worth the committee—even if you haven't got time to do it in person, in writing—hearing from what those projects are trying to achieve, because it's really interesting in terms of how they're using the group energy purchasing.

Chris has just reminded me also that we have our outreach advice service, and, again, they're targeting people on pre-payment cards to have a smart meter. 

Thank you. Can I move on to decarbonisation? Whilst everybody thinks band A is excellent and that's what everybody should be aiming for, is it—using a word used by the Minister earlier—achievable? I mean, you've had the Welsh housing quality standard, which has brought houses to band C. Nest's ambition is to bring houses to band C. Whilst you can say, 'Yes, everybody should get to band A', if we're talking about achievability, would it be achievable to get everybody to a minimum of a band C rather than invest huge sums of money to make far fewer people up to band A?

So, what we've actually asked the group to do is to tell us what different sorts of homes across Wales—what the maximum EPC rating might be that can be achieved. So, quite clearly, there are some sorts of homes that cannot get to EPC A. They just aren't constructed in a way that would make that possible. And then there's a whole other issue—. This is just about decarbonisation—this is not about fuel poverty, for a minute, all right? So, there's a whole other issue there then about the materials you then have to use to get them up to A, that are actually more carbon-intensive than just leaving them at B or C. So, that's—. One of the reasons that the group's work is so complex is that they're looking at a life cycle chain for those houses, and so, for example, it's awfully tempting to say, 'Well, let's knock down the houses that can't get to EPC A and build new ones that can', but what's the carbon footprint of that? How do we get rid of the materials that those houses were made of? Can we actually do that fast enough to rehouse the people? There's a whole series of really complex problems around this and that's why the group is still doing its work, and we're working alongside a lot of social housing providers because they're easier to work with in terms of big numbers of houses around the types of house we have in Wales and what might be done to each type of house to get it to the best possible standard.

At this point in time, we haven't said that that is EPC A: we've just said it's to the best possible standard for each type of house, and then when we get the report back off the committee, we'll be able to see what that looks like and what kind of programme we need to be able to take that forward. And in the meantime, of course, there's a whole other piece about what we're saying new builds should look like and what standards they should get to.

Thank you. Can I talk about Nest? There's a belief amongst lots of people that Nest is effectively a boiler replacement scheme, and we've heard that most of the interventions made by Nest are boiler replacements. We've also heard—I can't remember whether it was outside this committee or not—that it does seem to be targeted very much at people on very low incomes, and people on slightly above low incomes, and the 'just about managing' are unable to access it. And as someone who's represented a lot of just-about-managing constituents, like both of you do, I think there are concerns that they're just about managing, or they're left there and wished good look.


I think it's fair to say, and it's certainly correct to say, that the vast majority of home-energy efficiency measures that are installed through the Nest schemes are replacement boilers, and I have to say that for many of the homes that do have replacement boilers, it is a very effective way of reducing energy bills and also carbon emissions. So, it's a demand-led scheme. The measures are recommended on the basis of an independent whole-house assessment, but it is, I think, very fair and very correct to say that the majority are boiler replacements.

In relation to your point around low income and just-about managing, clearly, the way that we target people around fuel poverty—. I said in the strategy we've currently got that we haven't met our targets, and there will be new targets within that, and it could be that that will be something that we will look at, but I don't want to pre-empt the consultation. But, certainly, in the new strategy, we're going to have several layers of targets in a way that the strategy we're working to at the moment hasn't got.

And at the same time, a lot of the information again coming out of the IHP programmes feeds into what we're doing in terms of what can be achieved in which sort of house. So, at the moment, as Lesley says, the boiler replacement programme does achieve enormous benefits for people, but if there's something coming out of the IHP programme or the decarbonisation group that we could recommend easily that would achieve the same thing, then we could easily look at that. But at the moment we don't have that data, basically.

Just one point—I think that the number of people who are at risk of falling into fuel poverty—there was the number referred to as just-about managing—is almost the same, or in the same league, as those who are actually in fuel poverty. Hopefully the Members will see when we go out for consultation, hopefully later this month, that the new strategy tries to address that, both in definitions and in the actions and proposals we're bringing forward to consult on, so I think it's absolutely right to recognise that. I hope they'll respond to it as part of the consultation.

Thank you, Chair. Just picking up on a point regarding the previous question, really, regarding affordable housing and so on; it's more of a comment, really, Chair. Tata Steel are now running a new type of steel, which, you know, employs—. And they've done it in Wales before, but I just think if the Government maybe could look into that, while supporting the Welsh steel industry, but also providing new energy-efficient homes, which are affordable. But it does need—and it will need, if the roll-out is to happen—some sort of backing from the Government, in terms of that curve again: 'This is what a new house looks like, and it's okay to live in that.' But it is certainly a way, I think, which is different, which offers the benefits that we're all talking about, but also saving another industry as well.

Yes, and actually, some of the IHP programmes already use—so for example, the photovoltaic roofs where the photovoltaics are printed directly onto the steel, for example, that are produced in Port Talbot. So, the programme already has quite a lot of that in it, and we're extremely happy to expand it. I mean, in fact, some of the backing that we do for things like SPECIFIC and so on are around making sure that Government-backed research programmes for that feed into the IHP programme.

Okay, thank you. Let me just remind my colleagues that we've used up almost half the time. We've gone through about a third of the areas we intend to cover, or hope to cover. Andrew Davies.

Could I ask the Minister for rural affairs and energy: you brought Ofgem into this equation, and Ofgem have an important role to play in some of these measures, being the regulator. What representation do we have, or I should say you have as a Government, in making sure that the policies that you're pursuing around energy efficiency and all the rest of it are compatible with the goals of what Ofgem are doing in Wales in particular?

So, I do meet regularly, probably twice a year, I think, with them, to ensure that they understand that Wales is different. Quite often, the priorities are different, and it's important—and it's not just Ofgem, it's Ofwat, and Ofcom, I'm sure, is—. Everywhere now, devolution is having different policies, so we do have those discussions to make sure that—. You know, I mentioned in an answer to Jack around LPG: it's really important that they understand that those consumers have the same safeguards as others, so those conversations go on.

But other than those two meetings, there's very little interaction—is that correct? We don't have a main board member, for example, for Wales, promoting what Welsh Government are doing and the different regulatory and legal—


I'm trying to remember if I have a Welsh one on Ofgem. I can't think—

I don't know—

But we do meet regularly at official level. There is representation within the Ofgem office, people who are based in Wales and represent Welsh interests in Ofgem decisions.

Just two weeks ago, I think, Ofgem were in Port Talbot, holding their annual conference in Wales, with Welsh stakeholders, including Welsh Government. The focus of the conversation was on decarbonisation, and Ofgem were talking about their two main priorities for the next year, for their delivery plan, the first of which is putting the needs of the consumer, the needs of the customer first, both current and future, which I think is something the Welsh Government would absolutely recognise. And the second was to decarbonise the grid in a way that's socially just, which again is something I think the Welsh Government would agree with and recognise. They were talking to stakeholders about that plan, about those objectives, about the actions they need to take to reach those objectives, and they were taking in Welsh stakeholder views to inform that, as they published their plan to do that, and their objectives, I think, last week.

As the new chief executive officer takes his place in post, we're looking to get him a session in the diary with the Minister in the next couple of weeks.

So, is our relationship good enough, going forward, with Ofgem—

From an official level—

—on the agenda that you're dealing with, so that we can make sure—? Because they set the regulatory period and, obviously, the support periods. For me, I think we need a main board member, as such, then. But is it the Government view that, on this important agenda we're dealing with, our representations to Ofgem are being heard and, actually, the current relationship is robust enough?

I think we are recognised as an important stakeholder for Ofgem, and I think our interests have a high degree of alignment. Could we be more represented? Could we have a louder voice? Probably. Would that make a hugely material difference to the direction they're going in? At the moment, I suspect not. We are very closely aligned, but we could always do more.

I think it's something we should consider. I was getting mixed up between Ofwat and Ofgem, and I was just trying to think, I've just appointed someone, but, no, it's Ofwat. So, it's certainly something we could lobby for, and I'm very happy to make representations if—and particularly what Chris was just saying, it's got to make a material difference, hasn't it? Because we ask a lot of people, I think, to go on different organisations and bodies for us. But, certainly, it's something that if you're suggesting you think it might be better, I'd be very happy to take forward.

I think it's very important. If I could go back to the script and the private rented sector, we've had evidence that says that the minimum energy efficiency standards here in Wales aren't being enforced, or there's a lack of capacity and resource for effective enforcement. Do you agree with that evidence that we've taken?

Yes, so, we're in the process of changing over to doing something about that. So, the minimum energy efficiency standards in the PRS—private rented sector—are regulated by the UK Government and not by us. Those regulations mean that domestic properties on new tenancies for new or existing tenants, where the EPC rating is F or G—you can't let them, basically. So, if your PRS house that you're letting out has an EPC rating of F or G, you're not allowed to rent it unless—there are some exemptions, which I'm sure the committee can—. We can send a list of the exemptions, but that's effectively the thing.

From 1 April next year, that will extend to all properties, even where there's no new tenant. So, at the moment, if you're in an existing property and you've been a tenant there for 15 years and it's EPC F, then you carry on renting it, but from April next year, the landlord has to upgrade that property, or the tenancy can't continue. Those are policed, if you like, by local authorities in their area, and we've funded Rent Smart Wales to carry out a project to try and find all of those properties, because, obviously, we don't want people to be out on the street because of that. So, we funded Rent Smart Wales to do a survey and try and find all of those properties, and then we'll target them with help from Lesley's schemes in her department and other help.

Because of Rent Smart Wales, we can do that, because we know where all the landlords are. So, in England, they're really struggling to do that, because they don't have what we have—an organisation that holds all the data on anyone who's letting out a property. So, at least we know where they all are. We've just funded them to do that, and I'm happy that they will be able to do that and that we will be able to identify all those properties and target them appropriately before the deadline. But we aren't the people who set the regulation.

Do you have a sense of the scale of those numbers, then—

—because if it's huge, then that will have big implications for what else you can do with the—[Inaudible.]

Not that I know of at the moment, but I have been assured that Rent Smart Wales does know where they are and that they'll be able to identify the properties. I don't—


That could have a significant impact on the budgets available for other—

I haven't—I personally do not know what the data looks like at the moment. But as soon as we do, I'm sure we can share it with the committee.

I think the remaining questions in this session we should ask in writing, because otherwise we'll never get through it all.

Yes. Thank you very much. They are actually questions that could be quite easily answered in writing as well. So, moving on to the role of local authorities and Jenny Rathbone.

The WLGA has stated that local authorities should be trusted and given the flexibility to deliver the most efficient place-based solutions to challenges such as eliminating fuel poverty. I'd just like to probe your views on whether we should just leave it to local authorities.

The stock-holding local authorities have obviously been implementing the Welsh housing quality standard, and we are on target to meet the standard at the end of this year. Those authorities have done that, they've stepped up to that ask. I always like to remind everybody that we were told at the beginning of the Welsh housing quality standard that it was unachievable and too ambitious, and yet here we are: we've done it. So, I do think it's worth reminding ourselves of that. It's no mean feat to have done that. We've got local authorities working with energy companies through the energy company obligation local authority flex scheme—I've had to have that written down for me—and at last count we've got nine local authorities who've done that so far. Then the rest of it is Lesley's bit, but I can carry on. They work closely with Arbed am Byth to develop local area-based projects to improve energy efficiency in local homes.

So, I suppose the short answer, Jenny, is: 'Yes, I do think they are best placed to do that.' Obviously, they need to work with Rent Smart Wales and the social landlords in their area to get the identification of the properties, but they're in a better place to know where those properties are and what to do about it locally. I think trying to do that centrally would probably be quite difficult, and we've discussed already the problem with rurality and so on, so I think probably the local authorities are best placed to do that.

Okay. So how good have they been on collective switches?

At the moment, that's not what we've been asking them to do.

Well, they don't have to do things just because you ask them to do it. That's obviously one way around the reluctance of individuals to switch supplier because they just feel nervous that it's going to make them worse off. If they can get involved in a local authority collective switch, they've got the strength and the weight of the local authority behind them to know that the deal will be as it says on the tin.

Yes, so the local authority has to be clear that it's got the capacity to do that and to deliver that scheme, so we don't have a collective switch that goes wrong, for example. So, I would want them to be very sure that they were in a position to be able to do that for the right number of people for the right reason, and they had all the data available to them to make sure that that was the right thing to do. Because those are the sorts of things that sound attractive, but when you start digging into the data it's actually quite complex to get the right—. You'd need everybody on a particular tariff to move to this tariff that's negotiated globally. We will be able to do that. We will have better data. I'm not absolutely certain we've got the right levels of data at this point in time to be able to do that en masse. 

It's one of the things Communities First used to do exceptionally well. Back to you, Jenny.

Yes, but again though, often with social housing—so, again, working with social landlords is a lot easier, obviously, because they have a much better control over what they're currently buying.

Okay. Well, the other area where I'm surprised by the evidence we got from the three local authorities was not only were they not working with education and with health, but they hadn't even considered using the public services boards as a way of bringing all partners together. Now, I appreciate that there are other local authorities who have used the public services boards, but how satisfied are you that local authorities are really using the tools in the armoury to have a whole-community drive on this?

I think it's fair to say—and I'm sure that Julie as local government Minister would agree—it's patchy across the whole of the country. Different areas are better than others. I think also you raise a really important point about public services boards, and I think we need to make much more of a concerted effort to ensure that local authorities are working much more closely with them, and it's actually something that we're specifically looking at in the new plan.

Just on the PSBs, though, there is a balance to be looked at here. The PSBs are a coming together of local public services for local priorities, and so there are some circumstances in which the Government has asked them as a group to look at things. We have got a conference coming up with all the PSBs and the RPBs, actually—so, the regional planning boards—to look at good practice spread, and so on. But I'm reluctant to start putting diktats out across the whole of Wales to say that PSBs will do this and this, because actually they may have other priorities in their area that it would be better to put their resources into.

So, we're wrestling a little bit with guidance and finding good practice and also not being dictatorial about one size fits all, because it certainly does not. I just want to be really clear that we don't think that one size fits all. What we're doing is asking the PSBs to consider, as part of their work programme, these kinds of schemes, as opposed to saying, 'Thou shalt do it like this', because we don't know that, locally. It's really important that the local public services come together and decide what's necessary in their bit. I just want to make that clear. That's a really hard balance to get.  


Okay, but I think, in terms of having all the data that we need to know where we should prioritise our efforts, one of the things that the Wales Audit Office report highlighted was that the Welsh Government had said that councils are struggling to find the capacity to engage with Arbed. In your own paper, Minister, you say that the data held both publicly and by local authorities isn't of sufficient quality to support the development of local area-based policy. I find that difficult to understand, given I've got a reasonably good understanding of where we should be targeting in my constituency, and I'm sure others do too. I wonder if you could just elaborate on why the data and pulling it together is so inadequate. 

As I said, I think there are areas where we do have the evidence there and the local authorities are using it in the way that we would want them to, but it's not consistent, and that's why I have specifically said this is an area where we need to have a focus. I've obviously read the WAO evidence, and it's not just about public services boards, it's about local authorities also working with energy companies and the third sector, because all these various groups hold the data that will help us target it. So, there is some really good practice. The engagement with Arbed and Nest, for instance—. Certainly, with Nest, again, it's incredibly patchy; but Flintshire, for instance, is really good. I don't understand. I'm like you, I don't understand why they don't use the evidence and the data that they have in a way that would help them. 

Well, they hold the data on free school mealers and who's eligible. That might be a place to look. They're the sort of people who might be in fuel poverty. 

But, as you say, they don't need us to tell them that. 

No, indeed, absolutely. But that's why I think it's really what—. So, could you elaborate on how, for Arbed 3, you changed the contract to reduce the reliance on councils' input? Convince us that they're going to be able to do it independently without the councils' input, because they don't hold this sort of data.

Well, it's really important that local authorities do work with Arbed am Byth to ensure that we develop these local schemes in their areas. I visited one in Ann Jones's constituency in Rhyl, and that was an excellent example of partnership working in Denbighshire. So, we are pushing that forward. We're giving, actually, additional provision to have those local schemes, because I do think that is the way we need to go forward with Arbed 3. We're trying to reduce pressure on local authorities, I suppose. We're trying to give them more of an input. Certainly, we've got a new manager now for Arbed am Byth and he was there when I visited this local scheme in Rhyl. I know you've heard evidence from Arbed.

Well, I've heard from the Member for Vale of Clwyd just how brilliantly things are going.

There's a huge amount of work ongoing. We're looking at three areas: we're looking at Rhondda Cynon Taf, Flintshire and Ynys Môn.


Okay. So, you're prioritising those three areas for trying to improve the levels of fuel poverty.

Well, I think there is some really effective joint working in those three areas, and I think we can learn a lot from those ahead of the new strategy and the new plan.

Okay. So, elsewhere, could you just clarify whether there is a bidding process for funding under Arbed 3? If a local authority thinks that street X or estate X must be the top priority, based on their knowledge, can they bid to Arbed to get them to look at it?

They can't bid, but what they can do is work closely with Arbed to highlight these local schemes and that's exactly what's happened in Rhyl. But they can't actually bid. But, as I say, we do provide additional provision so that we try and help local authorities who haven't perhaps got the capacity to do so.

One of the other worrying bits of information we gathered in the inquiry was that not enough local authorities are seizing on the opportunities offered by ECO Flex, which is money that we're missing out on in Wales as a result of not picking up on this UK-based scheme.

Yes, I've seen that evidence too. Clearly, Scotland are doing much better than we are. So, I know officials—I think Stephen went to Scotland on a fact-finding mission to have a look at what we can learn from Scotland. Because you're absolutely right, I don't disagree with that at all. So, we need to have a look at how—. There are going to be changes to the ECO scheme that's been put forward by the UK Government, so we need to make sure that we learn lessons from what we've been doing, and also learn lessons from Scotland. I don't know, Stephen, if you can add anything on what happens in Scotland.

Yes, I think it was quite important, the learning that we did take from our visit to Scotland, and indeed we have visited Northern Ireland to see how their programmes are working there as well, to inform the new plans coming forward. What was quite impressive was the way that the agents for their home energy efficiency schemes are working in collaboration much more closely with their local authorities in Scotland to design schemes that have a better impact, and how they've supported local authorities to be able to come up with the ECO Flex statements, enabling them to lever in more UK Government money through that scheme.

So, that's the Scottish Government giving more support to local authorities.

The Scottish Government. The way their home energy efficiency programme is configured in Scotland is slightly different to the way that we have configured it here in Wales. For us, the learning will be, once the plan is published, how will that inform the next Warm Homes programme's schemes coming forward in the future and how that will be configured. But certainly, one of the key learnings that we took from that visit was the way that the agents had supported local authorities to develop the ECO Flex schemes, so that each local authority wasn't learning for themselves. They shared the learning and made it very much easier. There have been some good examples in Wales where local authorities have worked with energy companies to develop their ECO Flex schemes. What we're finding is that that is not universally applicable across all of the local authorities in Wales in the way that we would like to see.

Okay. Moving on to who is now eligible under Nest and Arbed, I wondered if, Lesley, you could comment on evidence that suggested that the Arbed scheme doesn't determine whether households are fuel poor, either before or after interventions are installed.

We use the best available data that we have to support both Nest and Arbed, so that we can target homes where people are living in fuel poverty. The way that the current contract is awarded under Arbed 3, it doesn't require collection of income data on the basis the scheme is designed to develop projects on an area basis, working across communities. So, that does mean that, in some cases, people not in fuel poverty but at risk of going into fuel poverty—and I think that's just as important—do benefit from our home energy efficiency measures under the Arbed scheme.

What I do think is really important, however, is that we collect the information to determine whether the Arbed scheme has benefited a majority of people who are living in fuel poverty, which is obviously the original intention. So, I know officials are currently in discussion with Arbed am Byth regarding the collection of information, because I think it's really important that the evaluation of the scheme is done on the most accurate evidence and data that we have. 


I can see that an area-based scheme is the most efficient from a decarbonisation perspective, but it does mean that owner-occupiers in area A, which has been decided to be a priority, are getting, obviously, an increase in the value of their house without having to pay anything towards it, whilst, across the road, in the next door street or estate, council tenants are not benefiting from warmer homes. So, I wondered if you can explain why householders who own their homes and therefore have a financial benefit, are not making some small contribution towards this decarbonisation. 

Well, I think, when we evaluate the scheme, that is something that we will clearly have to look at. As you say, doing that on an area basis was the way that we thought was best to get the outcomes that we wanted. That's why I was very specific in my original answer that we need to ensure that, when we come to evaluate the scheme, we do have the very best data and evidence available. 

Can I just add to that, though? There's a big problem in Wales with people living in houses that they can barely afford, even though they are owner-occupiers. So, we have a number of schemes at the moment where we're helping owner-occupiers get their house back up to human habitation-type of things, that then come with, 'You have to live in it for another five years', and all that sort of stuff to make sure that they don't turn into holiday homes or second homes or empty homes. But, absolutely, it does put the value of the house up but, at the same time, we do have a large number of people in Wales—I'm afraid we don't have the absolute figures—of people who just can't afford to do that and so are living in seriously substandard accommodation. 

So, it's a balance, isn't it, between having schemes that help people—. We have it for empty homes as well, so we have a large number of empty homes that are 'owned' by somebody, but that are not habitable. So, we currently have a grant scheme to get somebody to go and live back in that house, bring it up to standard, and then there are restrictions on how long you have to live in it before you sell it and so on. I take the point you're making, but I think it's more nuanced than that; we can't be leaving people in abject fuel poverty on the grounds that they're an owner-occupier but, actually, they have no cash of any description and can't get their house to standard. So, I just think it's much more nuanced than, 'We've enhanced the value of your house', because we clearly have, but, actually, there will be large numbers of people who just would not be able to do anything at all. 

And, when you come to decarbonisation, that problem gets way bigger, because the amounts of money that you're talking about are just out of the question for a large number of people. So, we're going to have to have some nuanced area schemes of that sort that have that effect. 

As you say, the area basis of the scheme is that—it does help with the decarbonisation agenda as well. 

Indeed. Just turning to Nest now, the stated aim of Nest is to bring people out of fuel poverty wherever possible. Nevertheless, it's not one of the eligibility criteria for Nest; it's much more around what your income is. And less than 45 per cent of households assessed before getting an installation by Nest were in fuel poverty in the last year for which information is available, 2018-19. 

So, you're right, but they will have been at risk of falling into poverty—into fuel poverty. It's a demand-led service and it does, obviously, check on eligibility and it's determined by a person in the household being in receipt of means-tested benefits living—obviously, as you say—in a private dwelling and with an EPC rating of E or lower. So, whilst 56 per cent of applicants were not in fuel poverty, if you're using the definition that we currently use, they were nonetheless eligible for means-tested benefits and living on a lower income in an energy-inefficient home. So, whilst, as I say, they weren't in fuel poverty, they were certainly at risk of falling into fuel poverty.  

We've done some detailed analysis of our fuel poverty estimates, and it suggests that approximately 144,000 homes in Wales spend between 8 per cent and 10 per cent of their household income on domestic fuel. So, therefore, they are at risk of falling into fuel poverty. 


Some people stay out of fuel poverty by keeping their house cold. So, they're not in fuel poverty, but the house is cold because they're staying out of fuel poverty because they're prioritising food over fuel. 

Yes. The figure I would just like to share with you, though, on this analysis that we've done, is, after the installation of home energy efficiency measures, the number of homes in fuel poverty dropped from 43.3 per cent to 21 per cent, with households in severe fuel poverty dropping from 9.5 per cent to 3 per cent. So, I think that 3 per cent now we should be having a focus on and, certainly, with the new—. We're going to consider the eligibility criteria as part of the new plan and strategy.  

Okay. Well, the Wales Audit Office report hints at this in terms of that you're broadening the eligibility of the Warm Homes programme to—. So, I wonder what you can say at this stage about how it would apply to both Nest and Arbed. 

So, I mentioned before the health conditions pilot Nest scheme that we brought in back in July and, again, the eligibility criteria for support was expanded. So, that included people who were living in a house and were at risk of avoidable ill health that's caused by a cold home. And the other thing that I also liked about the pilot—as I say, it's finishing at the end of March and will obviously have to have evaluation—was self-referrals, because I thought that was really important, that people were able to refer themselves as well, and the third sector. We've had about 3,500 referrals in that pilot scheme, and I think the latest figure that I saw this week was that we've helped 600 people. So, that's one example of how we are broadening our support.   

Okay. Well, it would be really useful if the evaluation could capture how well the health service is helping people to self-refer, because you can't expect everybody to know about these sorts of things if they're struggling with ill health. Do you think that could be a question—you know, why did you refer, why did you apply? Did the health—you know, what role did the health service play in it? 

Were you signposted or were you given advice? No, I think that's a very good question. 

Thanks, Chair. I'd just like to ask the Minister: you've obviously seen the evidence from Arbed about the Arbed scheme, and where they've said it's unable to support the households that need housing improvements prior to the installation. And they're saying, further to that, that this is due to a lack of funding, and—whether you'd like to just comment on that, really. 

So, certainly, I've had discussions with Care and Repair, for instance, who tell me that that's quite often the case; the absence of support for people living in fuel poverty to be able to do enabling works is clearly an issue, and I know that both Nest and Arbed have told us as well that they're not able to install measures because of enabling works not being able to be done. I think there's the home improvement loan, if that's still available from local authorities. That's one area that could help meet the cost of minor repairs but, of course, if it's a major repair and they can't afford it, that clearly is a massive barrier.

I think, again, as part of the new plan—I can't remember if it's actually been decided for sure—we need to look at having a pot of money to enable minor repairs, certainly, to be done in the first place so that those energy-efficiency measures can be put in, but I think we need to look at specifically that. 

We've got a couple of local authorities—Rhondda Cynon Taf, I visited a scheme with Lee Waters very recently there, where the authority had combined a number of grants that it had and we had in order to be able to do some works that wouldn't have been possible otherwise. So, there will be some data coming back from those schemes so that we can see whether we can extend it out across Wales, because I think probably the funding is available, but perhaps the creative people in the local authority with the space in their work schedule to actually pull it all together might be lacking. So, once we've got the learning back from a couple of those schemes, we can see what we can do to spread it out a bit, because, at the moment—. I'm aware of at least Rhondda Cynon Taf that do it; I think there are two other authorities that do it—. 

Is it Flintshire and Carmarthenshire that are trying to get into my head? Don't take that as gospel; I'll check. But we have a number of authorities who are trying to do that, and what we're going to do is try and learn what they've done and then help the rest then pull those various schemes together so that, rather than saying, 'You can't do Arbed because you can't do the enabling works', they're able to be signposted to whatever grant it is that would enable the works, or Care and Repair or whatever. So, the scheme I'm thinking of had three grants, I know, that were pulled together to do the works.


Can I just briefly ask? It might be sitting in some of this wealth of paper that we've got around, but—. Lesley said we need to get a pot of money together; Julie, you said there are schemes out there but we need to pull them together so that there's that enabling mentality within local authorities. Have we got a timeline somewhere that says when this is going to happen: (a) the pot of money arrives and (b) this enabling mentality to exist within local authorities, considering there is good practice in some areas? The evidence we took from one was quite telling—not a local authority, but a witness, who just said, because there were a couple of slates off on the roof they couldn't insulate the loft as such. But, because there was nothing there to put the slates on—no scheme to support that—then the whole project fell through.

So, it's exactly that. Some local authorities have home improvement loans still; I believe that not all of them do. So, we're having to have a look at what data we've got about why some of them do and why some of them don't. I honestly don't know the answer to that. We can write to the committee. I don't, off the top of my head, know when the data will be available from the schemes that we've been running, but I can find out. We can write to the committee and let you know. 

From my point of view, we recognise that this is something we are going to have to provide—look at providing additional funding for minor repairs. I think that example that you just gave is a very, very good example, and that will definitely be part of our new strategy and plan.

If we could have a timeline or something, it gives us confidence that these—

I just can't bring it into my head at the moment, I'm afraid, but we'll let the committee know. 

No, I fully understand. It would be helpful, thank you.

Thank you. It's also about that sharing of good practice—you picked up, Jenny, before, about good practice travelling slowly. That fundamentally needs to change. Councils are squeezed in Wales and we all know the reasons behind that. It's about how we enable the councils to share good practice. 'There's good practice in Flintshire and I'm very happy to have to go to Wrexham.' We all should do that across Wales. So, it's about how the Government can try and enable that, perhaps without bringing the funding to do that but just to simply engage with that conversation. 

Just picking up on Nest, really—if there have been any assessments and if you could outline those assessments, on the spending caps of the current scheme to bring households out of fuel poverty, in particular to fund the works that we're talking about, the enabling works that we're talking about.

So, I think the last review of that was back in 2018 when we were getting ready to bring in Arbed 3, or Arbed am Byth now, and that was certainly looked at. When we had changes to the current scheme, that was one of the areas we looked at. I mentioned that we have some flexibilities. So, if a business case is brought forward, certainly, as a Government, we can look at applications for improvements to be undertaken above the cap, the spending cap. We've got that both for Nest and Arbed. So, there is that flexibility to be able to do so, but I think it was last reviewed about two years ago.

Thank you, yes. Just on the enabling works, one of the messages that came to us from local authorities as well wasn't just, 'We need money to do it', but they need a longer lead-in time. Because decisions are made to move into a certain area to do some works and they don't have the time either scheduled for getting some of that done, or actually to identify alternative sources of income that they may be able to access. So, that's just a practical thing, in passing. 

And, coming back to money, as we all do at the end of the day, and I touched on this earlier, really, didn't I, in evidence to our inquiry on low-carbon housing, the environment Minister told us, and I quote,

'if we want to achieve our targets, we are going to have to be significantly upping schemes, like Arbed and Nest',

and in relation to funding, you said that, and I quote again,

'we clearly need to up that in order to make sure that we do hit our targets'.

So, why hasn't that been reflected in the draft budget for 2020-21?

I think it was you who asked me this question when I came for budget scrutiny. It's a four-year package, so the reason why it's not been reflected in 2020-21 budget is it's just consistent with the funding commitment that we made back in 2017-18. It amounts to £104 million over four years. That's why it's not specifically in this budget. 

But since that commitment in 2017-18, of course, we've declared a climate emergency. So, nothing's changed in terms of that funding profile. 

Not in that funding profile, but you'll be aware of the significant funding around the decarbonisation agenda, £143 million—if that's right; £143 million—in the next budget. So, I'm sure there will be a difference at the end of the year, but at the moment it's not profiled.


And also this is about the data we started talking about right at the beginning of this session in the committee, which Chris Jofeh's group is looking at. So, at the moment, it would be quite arbitrary. We need the data to know what we need to do in order to be able to start to look at what funding is required. So, just arbitrarily saying, 'Let's put it up by 10 per cent'—to do what? So, we're working very closely with a number of groups to get that data in so that we can target the various programmes and, as I said, making sure that the IHP data feeds into that as well, which of these gadgets actually works, which of the houses that we've built actually does what it said it would do in the first place. I mean, most of them are doing that, but not all of them. So, we need to—

They're just working on the first bit of the scoping exercise at the moment. Lisa would know more about it than I do.

One of the recommendations in the Jofeh report was around the EPC A target in 10 years and it actually said, 'Now go away and do some modelling to see what you actually have to do.' That work is currently under way. It's with the Welsh School of Architecture again, although there was a competitive process around that—it's not that we have a favourite part of any university—and we've got data from all the social landlords in Wales, the local authorities and the RSLs. We're working with three, which are Tai Tarian, Carmarthenshire council and North Wales Housing, and it's about the modelling of their stock. The first phase of that work will be finished by the end of this financial year. So, that's very much about trying to work out, put some meat on the bones about, 'So, what is it you actually have to do? Is it EPC A or should it be something else because we don't necessarily have the technology yet or the supply chains?' So, that's very much on the go at the moment.

My department has done some high-level assessment, which has come up with a figure of around £56 million a year being needed in relation to this. So, £104 million over the four years from 2017 to 2021, you can see—well, it's doubled, isn't it, per year? So, we're going to have to balance it with other priorities right across Government. 

I'm sure we're going to come back to this in both committee and Plenary in the following year. On to Neil Hamilton. 

I'd like to ask Lesley some questions about referral services and advisory services. In the current fuel poverty strategy, the Government's committed to a two-way referral network for referring householders between the plethora of organisations that have got a stake in this area of policy. Can you tell us how this referral network is working in practice and what work has been undertaken to assess its effectiveness?

So, we've done considerable assessment, particularly ahead of bringing forward the new strategy. I think it's working well. I know some stakeholders think it could be improved; some are very happy with it. I think it is a bit of a mixed bag in some areas. So, we're going to—. I want to expand the availability of those support services. I think that's something that's come through loud and clear. I want to look at a pilot scheme—I'd like to start that later in the summer—to see how we can deliver improvements to both our advice and our support services in this area. As you say, we rely on the third sector and the local authorities and all our partners to engage with each other, and I want to look at how we can streamline it—I think that's probably a better word.

What do you think isn't working at the minute in particular?

I don't think there's anything that isn't particularly working; I think it's just that it's patchy. You know, you need to go back to that good practice, you need to look at the local authorities that have the good areas and make sure that it's consistent. I don't like inconsistency and, unfortunately, we do see that patchiness across the country. 

Okay. As regards advisory services, in the summary of responses to a consultation on Nest in 2016, it was said that the Welsh Government decided to introduce an in-home advice service as part of the scheme. Does Nest currently offer any in-home advice, do you know? And if not, why has this not been taken forward?

It does. But, again, I think that it needs to be spread wider, but it does do that.

How are we going to spread it wider? So, again, that is an area in the new fuel poverty plan. That's an area that we're focusing on. There will be proposals to ensure that that happens. I think that it also needs not just to be spread wider, I think it needs to be a bit more tailored, specific, so a bit more bespoke for people's needs.

Yes, on the Nest scheme, we've taken evidence that shows a certain percentage of households still remain in fuel poverty after measures have been taken. What help and support can be given to help them get out of fuel poverty, even though they've received some assistance under the scheme already?


Well, I think it's fair to say that we don't hold all the levers, but I think you make an important point that, even after they've had energy efficiency measures installed, there's still remaining fuel poverty. Sometimes, it could be that their personal financial circumstances have changed—that obviously dramatically affects people's incomes and their ability to be able to come out of fuel poverty. I think it's really important that we assess what benefits—what efficiency measures we've put in and what benefits have come forward, whether we need to do something else on top of what's been done. I think, even where somebody hasn't come out of fuel poverty—. I don't think—. Certainly, any assessment I've seen, it cannot be argued that the energy efficiency of the home hasn't improved, so you would hope that that would, obviously, help to reduce the fuel poverty gap, even if it hasn't taken them out of fuel poverty. We are able to approve additional spending on homes, so if it comes back, after that assessment, that they need another energy efficiency measure, we can do that; there is that flexibility to do that. But I think we have to accept that we don't have all the levers.

Could we also accept that some people who are used to spending 11 per cent of their income on heating, they live in a house that is generally cold, they make these improvements and their house actually gets warmer? So, although they're still spending exactly the same amount, they're now spending it on having a warm home, not a cold home?

Again, just for my own understanding—perhaps other committee members know this—what number of houses are we talking about that, after they've had the measures undertaken in the first place, still remain in fuel poverty? Is that data contained somewhere within Government?

The Nest annual report gives data in terms of what the benefits are, how many are still in fuel poverty after. I think it is important, though, to remember that the benefits reported by Nest, and, to an extent, Arbed, are modelled improvements, and one of the things that we're very keen to do is understand more fully, when measures are installed, and, hopefully, used correctly—whether or not those benefits, as the Minister alluded to earlier, are actually being realised and actually saving people real money, rather than modelled money. And if we get a better handle on that and the effectiveness of measures once installed, then we will be able to do much more effective targeting in terms of what measures work best. Because, at the moment, it is based on SAP assessments. An assessor will go in; it will work on a modelled system to see what should happen when measures are put in, but there are number of variables that perhaps are not fully taken into account by the assessment methodology. I think if we then have more feedback when these measures are put in, then that will better inform how we assess homes for the future.

I think it's quite important as well—. There's been some discussion about the EPC A rating. Under the fuel poverty estimates that have just been done, 5 per cent of people who are living in fuel poverty are actually in an EPC rated B property. So, therefore, it does ask the question—and it's something that will come forward in the consultation—is it right that we continue to target on EPC improvement, or is it better that we try and focus on a reduction in the kilowatt hours used to maintain a satisfactory heating regime, because that has a greater correlation in terms of the price paid for energy, which is one of the big determinants of fuel poverty?

That will also have an impact on decarbonisation, if we are going to change our—well, we are going to change our—target, on the UK CCC advice, from 80 per cent to 95 per cent. That will have an impact too, and that's one area we need to look at. 

And the original question I put—I can find that information in the Nest annual report, I can then.

That's helpful. Thank you. One final point as well, about—. Obviously, the uplift and new installations of kit going into houses to help people come out of fuel poverty—ground-source heat pumps et cetera—. If people are like me—I'm useless when it comes to technology as such; the better half has to deal with most of the things that are set up in our house. But what support is there, and are you happy with the level of support that goes in to advise people on how to use the new heating devices, the new gadgets, that are put into homes? Because it's wonderful to see it all in there, but if it's not used correctly, it quickly breaks down or it has no effect at all.


Obviously, that advice is given when they're installed, but, equally, they can continue to access the Nest helpline if they are concerned.

I appreciate it's given, but are you satisfied with the quality of advice that's given? Because someone could drop something off at our front door and say, 'Well, there's the instructions.' They've given me the advice, they have. They might not have talked me through it or anything. So, what I'm trying to get at is to the quality of the advice that's given. Because we all have different levels of understanding when it comes to technology, and if you've been in a house for many years, you're familiar with the way it operates. Change, very often, is quite frightening for people, it is.

I am satisfied with the quality. I'm sure an Assembly Member will have been contacted to say that the quality of advice hasn't been what you would want, but I personally haven't been contacted. I can't think of anybody who's contacted me to say that, but, as I say, they could then continue to go back to the Nest helpline if they were concerned.

Before we finish, can I just say on this point—? People like direct heat; they like the radiators. The councils in the 1960s put underfloor heating in that people just turned off and plugged in radiators because they liked that direct heat. Surely one of the things we need to do is to get people used to indirect heat or underfloor heating, all these things, because if they can't put their hand on something to warm it, they're not always convinced that it's working.

And that's really a cultural thing. I grew up in Canada. Nobody in Canada has a radiator; I didn't know what one was until I came back to this country. The place we lived had a sign outside the town saying, 'Coldest place in Canada, 75 degrees below zero'. And that's all inducted heat because that's what Canadians do in their houses. So, that's a real cultural thing, and that's what I meant about having to get people used to the way that the new heating systems work and the fact that there isn't one direct heat source. Actually, the house is warm, you don't—. Canadians think it's insane to have a small thing in the corner that heats a bit around it and then the further away you go away from it, the colder you are. That's really cultural.

So, one of the big things the innovative housing programme does is try to get to understand what those cultural things are and get people to shift away from them. And as I said, that new technology curve is fascinating. When I was very young and I was in Wales, we grew up in a house with coal fires and no central heating. My grandmother got up every morning and lit the fires before everybody else got up, and for years afterwards, when there was no need, she still got up first and did things before everybody else got up. So, those cultural things are really important, and the helplines really need to be there on an ongoing basis to help people understand how that ambient system might work.

Yes. Can I thank you all? We have gone slightly over time, but not as much over time as I feared earlier on. I'd very much like to thank Andrew Davies who's got some written questions that we would like to send to you.

Perhaps the clerks will send it, but you're the one who picked them. 

Chair, I think we promised a few things to send to the committee as well. I'm sure you'll remind us of what they were.

Okay. Thank you very much. I thank you for coming and thank your officials for coming with you.

3. Papurau i'w nodi
3. Papers to note

Can I ask us if we can note the paper listed as item 3.1: the Welsh Government's response to the committee's annual report on climate change? Noted.

4. Cynnig o dan Reol Sefydlog 17.42(vi) i bendefynu gwahardd y cyhoedd o'r cyfarfod heddiw ar gyfer eitem 5
4. Motion under Standing Order 17.42 (vi) to resolve to exclude the public from item 5 of today's meeting


bod y pwyllgor yn penderfynu gwahardd y cyhoedd o eitem 5 y cyfarfod yn unol â Rheol Sefydlog 17.42(vi).


that the committee resolves to exclude the public from item 5 of the meeting in accordance with Standing Order 17.42(vi).

Cynigiwyd y cynnig.

Motion moved.

Can I move the motion under Standing Order 17.42 to resolve to exclude the public from item 5 of today's public meeting?

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 10:48.

Motion agreed.

The public part of the meeting ended at 10:48.