Councillors to be asked to sanction £300,000 in fuel grants for poorest households in Shetland

Councillors are being asked to consider paying out £300,000 a year in grants to those on housing and council tax benefits to help tackle the scourge of fuel poverty, which is estimated to afflict over 3,500 households in the isles.

The suggestion forms part of a thorough report from SIC policy officer Emma Perring, which elected members commissioned after rejecting councillor Cecil Smith’s call to resurrect a £300 winter fuel grant to over 65s just before Christmas.

His proposal was ditched amid criticism of its emphasis on the elderly while ignoring other vulnerable groups. Several members did acknowledge some action was required to assist poor people who no longer qualify for Shetland Charitable Trust’s Christmas bonus. It is now restricted to the disabled and households with people aged 60 and over who are entitled to benefits.

The new, targeted £300,000 a year scheme would provide 1,500 households where people claim benefits with a grant of up to £200 each winter. Of those, 57 per cent are pensioners and 43 per cent of working age.

However, the sum is not included in the 2011/12 budget agreed by members last week and money would have to be found either through further cuts or increasing the already sizeable draw on oil reserves.

Another option is for the scheme to target only the 645 households which fit the above criteria but are not eligible for the charitable trust bonus, which would reduce the price tag to around £130,000 a year.

In December, a handful of councillors trumpeted the need for long-term measures to tackle the underlying cause of fuel poverty, namely improving insulation and energy efficiency in old crofts and poorly equipped properties built between the 1970s and 1990s. An alarming 94 per cent of Shetland homes have either a “poor” or “moderate” energy rating.

Ms Perring’s report, which will be considered at Wednesday’s Full Council meeting, suggests strengthening housing standard regulations to bring them more in line with the energy efficiency benchmark set by Scandinavian properties.

More than a third of all Shetland households in 2007-2009 were living in fuel poverty (defined as a household which spends over 10 per cent of its income on fuel). Thirteen per cent of those were deemed as living in “extreme” fuel poverty, meaning they spend more than a fifth of their income on fuel. Those figures are likely to be worse now due to a rapid rise in fuel prices.

Ms Perring also recommends possible changes to the existing fuel poverty grant scheme, whose budget is being cut to £145,000 a year. Under the scheme individuals can apply for tailored assistance, but if an applicant has more than £1,000 in savings the maximum grant they can get is £10,000.

She suggests raising the savings limit to £5,000 to improve uptake of the scheme, while grants could also be tweaked to cover physical preparation of rooms and lofts and redecoration aftewards, where required, to reduce the burden on the applicant.

Efforts to lobby the Scottish government to make nationwide schemes more adaptable to Shetland-specific issues could be ratcheted up. For instance, the government may be encouraged to take wind-chill into account when calculating cold weather payments.

The report states: “National schemes tend to lack flexibility and are often not appropriate to Shetland’s climate and circumstances. Insulation schemes do not include floor insulation, which can have a significant impact on energy efficiency in Shetland, due to the windy climate.”

Some schemes are driven more by a desire to address climate change rather than tackle fuel poverty, the report suggests: “The approach appears to be one of a quick fix to meet targets, rather than assessing each house and dealing with it appropriately to minimise heat loss.”

Another possible course of action is to press for a reduction in the cost of pre-payment meters and electricity cards. Such meters and cards penalise some of the poorest in society, including those who do not have a bank account and have no other option for paying for fuel.

Ms Perring identifies that under-occupation of houses – single pensioners frequently end up living alone in a four or five-bedroom home – is a major contributor to fuel poverty. Such individuals could be offered incentives to move to a smaller property through the grants scheme.

Gazing into the future, the report suggests community benefit payments as a result of renewable energy developments could be used to address fuel poverty through measures which improve energy efficiency.