Scottish House Condition Survey: Key Findings 2011

Annex A Assessing Contributions to Changes in Fuel Poverty

193. Between 2010 and 2011 there was a reduction in the rate of fuel poverty of 3.4 percentage points taking July 2011 fuel prices, or a small increase of 0.9 percentage points using October 2011 fuel prices.

194. During this period the price of fuel increased putting upward pressure on the rate of fuel poverty. The growth of household income and the improvements in the energy efficiency of the housing stock which are evident in our SHCS samples work in the opposite direction. To simulate the effect of fuel price alone we substituted 2011 fuel prices in data from the 2010 SHCS sample, effectively holding housing stock characteristics and household incomes at their 2010 levels while increasing the cost of fuel. The resulting predicted levels of fuel poverty are reported in the third row of Table 47 for July 2011 and October 2011, at 28.8 and 32.6 percent.

Table 47 Components of fuel poverty change: price, income and energy efficiency

Source: SHCS 2010-11

195. These figures constitute estimates of the effect of fuel price rises on the observed level of fuel poverty (reported in of Table 47).^[47] The rates of fuel poverty observed in 2011 are lower than those predicted by fuel price alone, presumably due to increases in household income and energy efficiency. This difference, or the offsetting effect of income and energy efficiency taken together, stands between 3.7 and 4.2 percentage points depending on the fuel price used (row 4 in Table 47).

196. To disaggregate this further we simulate the change in each income and housing stock between 2010 and 2011 while keeping other factors constant and take the resulting changes in the predicted fuel poverty rates as estimates of the effect of income and housing stock respectively.

197. To simulate income growth between 2010 and 2011 we upgraded 2010 household incomes to 2011 levels by increasing each household's income by the average income gain which was experienced in their decile (see Table 25).

198. Energy efficiency upgrades are more difficult to simulate because of the broad range of improvements and the complex nature of the interactions that influence the thermal performance of buildings. To model energy efficiency changes in isolation we used the 2011 SHCS sample of the housing stock with simulated 2010 income levels and 2010 fuel prices. The difference between the estimate of fuel poverty obtained in this way and the observed 2010 fuel poverty estimate is due to the differences in the housing stock observed between the 2010 and the 2011 SHCS samples, which includes the energy efficiency improvements in housing discussed in the rest of this report. It can therefore be taken as an estimate of the impact that improvements in the energy efficiency of housing have on containing the pressure from the rising fuel price^[48].

199. The results are reported in rows 5 and 6 of Table 47 in terms of percentage point change in the estimated fuel poverty rate (columns 1 and 2) and as share of the overall offsetting influence on the price effect (column 3).