Metric to calculate fuel poverty needs reforming to include billing data

The way fuel poverty households are identified in the UK needs reforming, according to leading academics.

The current method to determine fuel poverty is based on income and the energy efficiency of homes.

Known at the LILEE (Low Income Low Energy Efficiency) indicator, this way of calculating fuel poverty has been used since 2014.

However, a report by the University of Westminster and Citizens UK concludes that this method fails to capture the true scale of fuel poverty as it does not factor in energy bills.

“Fuel poverty is affecting people’s health and wellbeing, particularly those already facing socio-economic and health inequalities,” the report states.

“However, identifying households in fuel poverty remains challenging and some indicators are somewhat disconnected from what is happening on the ground.

“The findings suggest that there is a need to establish tools and methodologies that are connected to the national and local context.”

The report adds that if LILEE considered the cost of energy then “the results will show a sharp increase in energy poverty due to increased bills over the last three years”.

It adds that a new indicator tool should be developed using data on building stock with  socio-economic data to identify fuel poor households more accurately.

It adds that the indicator “could potentially include geographical location, building typology (age, etc), socio-economic / demographics, leading to action plan and retrofit strategies”.

The government’s Annual Fuel Poverty Statistics – released earlier this month – show that an estimated 3.17 million people were living in fuel poverty in England in 2023.

That equates to 13% of all households in the country, effectively the same as the 13.1% of households classified as being fuel poor in 2022.

While the number of households in fuel poverty has remained steady the combined fuel poverty gap – the reduction in fuel costs needed for a household to not be in fuel poverty – was estimated at £1.32 billion under the Low Income Low Energy Efficiency (LILEE) metric. That equates to £417 per household, up 20% since 2022 and 64% higher than 2021’s out-turn figure of £254.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said the government statistics fail to “paint the true picture of the suffering in households across the UK”.