Y Pwyllgor Cydraddoldeb a Chyfiawnder Cymdeithasol

Equality and Social Justice Committee

21/03/2022

Aelodau'r Pwyllgor a oedd yn bresennol

Committee Members in Attendance

Jane Dodds MS
Jenny Rathbone MS Cadeirydd y Pwyllgor
Committee Chair
Ken Skates MS
Samuel Kurtz MS Yn dirprwyo ar ran Altaf Hussain
Substitute for Altaf Hussain
Sarah Murphy MS
Sioned Williams MS

Y rhai eraill a oedd yn bresennol

Others in Attendance

Jane Hutt MS Y Gweinidog Cyfiawnder Cymdeithasol
Minister for Social Justice
Mark Alexander Pennaeth Datgarboneiddio, Arloesedd a Thlodi Tanwydd y Sector Cyhoeddus, Llywodraeth Cymru
Head of Public Sector Decarbonisation, Innovation and Fuel Poverty, Welsh Government
Steve Chamberlain Arweinydd Polisi Effeithlonrwydd Ynni Domestig a Thlodi Tanwydd, Llywodraeth Cymru
Domestic Energy Efficiency and Fuel Poverty Policy Lead, Welsh Government

Swyddogion y Senedd a oedd yn bresennol

Senedd Officials in Attendance

Angharad Roche Dirprwy Glerc
Deputy Clerk
Claire Fiddes Ail Glerc
Second Clerk
Rachael Davies Ail Glerc
Second Clerk
Rhys Morgan Clerc
Clerk
Sam Mason Cynghorydd Cyfreithiol
Legal Adviser

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.

Cyfarfu’r pwyllgor drwy gynhadledd fideo.

Dechreuodd y cyfarfod am 13:30.

The committee met by video-conference.

The meeting began at 13:30. 

1. Cyflwyniadau, ymddiheuriadau, dirprwyon a datganiadau o fuddiant
1. Introductions, apologies, substitutions and declarations of interest

Prynhawn da, pawb. I'd like to welcome Members and members of the public to the meeting of the Equality and Social Justice Committee. The meeting is being held in public and is broadcast live on Senedd.tv. Simultaneous translation from Welsh to English is available. I've had apologies from Altaf Hussain, and I'm delighted to welcome Samuel Kurtz in attendance today as his substitute. Are there any declarations of interest from Members? Samuel.

Thank you, Chair. Yes, just to declare an interest as the director of the registered charity the Wales Federation of Young Farmers Clubs, which has been in receipt of Welsh Government funding previously. So, I just wanted to note that.

Thank you very much. Lastly, before we proceed to our fuel poverty inquiry, if I drop out of the meeting, then Sarah Murphy will chair the meeting while I try to rejoin.

2. Tlodi tanwydd a’r rhaglen Cartrefi Clyd: Sesiwn dystiolaeth 5
2. Fuel poverty and the Warm Homes programme: Evidence session 5

I'd like to welcome everybody to our final oral session on fuel poverty and the Warm Homes programme, and I'm delighted to welcome the Minister for Social Justice, Jane Hutt, and her officials: Steve Chamberlain, who's the policy lead on domestic energy efficiency and fuel poverty; and Mark Alexander, the head of public sector decarbonisation, innovation and fuel poverty. Welcome to all three of you. Sioned Williams is going to ask the first questions. Sioned.

Diolch, Cadeirydd, a phrynhawn da, Gweinidog, a phrynhawn da, pawb. Cwpl o gwestiynau i ddechrau ynglŷn â'r cynllun gweithredu tlodi tanwydd. Mae tystion i'n hymchwiliad ni, gan gynnwys National Energy Action Cymru, wedi datgan pryder ynglŷn â diffyg targedau tlodi tanwydd interim er mwyn gallu dwyn y Llywodraeth bresennol, a'r nesaf, a'r nesaf, am wn i, i gyfrif. Felly, mae gen i ddiddordeb i wybod pryd bydd y targedau tlodi tanwydd interim yn cael eu cyhoeddi, ac a fydd y targedau yn ymgorffori nodau polisi trosfwaol 'gwaethaf eu byd gyntaf' ac 'adeiledd yn gyntaf'?

Thank you, Chair, and good afternoon, Minister, and good afternoon, everyone. A couple of questions to start on the fuel poverty action plan. Witnesses to our inquiry, including National Energy Action Cymru, have stated concern about the lack of interim targets for fuel poverty in order to be able to hold the current Government, and the next Government, and the one after that, perhaps, to account. So, I have an interest in knowing when the interim fuel poverty targets will be published, and will the targets embed the overarching policy goals of 'worst first' and 'fabric first'?

Diolch yn fawr, Sioned, and thank you for those questions. In terms of the targets, obviously, I realise just in terms of our fuel poverty plan, looking at this now, that we have got those targets, which were set up until 2035, and obviously you'll be aware of those targets—'realistic and achievable'—and the fuel poverty advisory group are now engaging, particularly looking at interim targets, because I can see—. I mean, things have deepened so much in terms of fuel poverty and the pressure on households, so as far as moving to the interim arrangements, given that we have those longer term targets, my understanding is that we've commissioned the Building Research Establishment to provide new fuel poverty estimates because, obviously, we need to know what is estimated and the potential for interim targets, and that response from BRE is due next month. Then, we will want the fuel poverty advisory group to work with our officials to look at what interim targets should be included in the fuel poverty plan. There is actually a periodic review of the plan anyway, so that takes place next year—I think March 2023 at the latest. So, although we do need those interim targets, we are working on them. We have to actually take action now in terms of limiting the increase in the levels of fuel poverty, regardless of working out those interim targets.

But the issues around 'worst first' and 'fabric first' really are very important in terms of policy goals, and we really are looking now at those—well, what we want to do is to tackle fuel poverty in terms of supporting those households that are most in need of energy efficiency of their homes. It's been debated—yesterday, I was watching all these debates with the Chancellor and everyone about how we need help immediately to households, but we know that energy efficiency is absolutely critical in terms of actually being able to keep people warm. We do have that overall target to eradicate severe and persistent fuel poverty, anyway, by 2035.

So, just to reassure, the plan does establish the fabric-first approach for housing retrofit, and that, obviously, is about how we do improve the thermal efficiency of the building fabric in the first instance, and it's so important that we do focus on those energy efficiency issues, particularly given the state of our housing stock in Wales and how that has such a brutal impact on people's lives in terms of living in fuel-poor households in terms of support.

13:35

Diolch, Weinidog. Roeddech chi'n sôn fanna am adolygu'r cynllun tlodi tanwydd. A fydd e'n cymryd i ystyriaeth y fersiwn nesaf, felly, o'r rhaglen Cartrefi Clyd pan fydd honno wedi cael ei datblygu. Hefyd, fel oeddech chi'n sôn, yng ngoleuni'r cynnydd diweddar mewn prisiau ynni a'r sefyllfa bresennol, sut ydych chi'n bwriadu, fel Llywodraeth Cymru, gyflymu'r camau gweithredu i fynd i'r afael â thlodi tanwydd?

Thank you, Minister. You mentioned the review of the fuel poverty plan. Will it take into consideration the next version of the Warm Homes programme when that is developed. Also, as you mentioned, in light of recent rises in energy prices and the current situation, how do you intend, as a Welsh Government, to accelerate your action to tackle fuel poverty?

Well, this is the current challenge, isn't it? That has to be an absolute priority in terms of the cost-of-living crisis. So, I've mentioned the fact that we're already committed to a periodic review of our fuel poverty plan, and that's going to start later this year, but it will be published into the next financial year, but it has actually got to take into account the impact of the Warm Homes programme—it's got to take that into account. But also, that's under consultation, as it is in terms of the next phase of the Warm Homes programme. It's got to take into account the update on the Warm Homes programme so far.

So, I think this is just back to the fact that we are in unprecedented times in terms of tackling fuel poverty, with that 54 per cent increase in domestic gas and electric prices that's taking effect within two or three weeks, at the beginning of April. I think, particularly looking at off-grid households, 90 per cent of off-gas grid households depend for their heating—. The cost of heating oil is such a challenge. But, also, we've got all these pressures that have come from the cut to universal credit, and we could have been there yesterday, questioning the Chancellor, I have to say, because, really, the situation in terms of the freeze in benefits to 3.1 per cent and the cut in universal credit are crucial issues in terms of UK Government responsibilities in terms of tackling fuel poverty.

But we have got to take our responsibility, talking about energy efficiency, improving that in terms of low-income households, and it is a sustainable way of lifting households out of fuel poverty. So, just to reassure colleagues here—of course, last week and the week before last in terms of supporting the budget—the budget for Nest has increased by 10 per cent, so it's around £30 million to the scheme next year. Also, on social housing, the Welsh housing quality standards are critically important, and the optimised retrofit programme, improving housing in the social housing sector—all investments that are part of the budget. You're very well aware of the packages of support that I've announced: the £51 million before Christmas, and that started with the fuel support scheme of £100. We've doubled that to £200 in terms of recognising the needs, and that is a working-age, means-tested benefit at this stage, but we're looking to extend the eligibility.

But this is where, when we had our cost-of-living summit—. We very much focused on fuel poverty, but food poverty comes into this; you can't really separate the two. And we're going to have another round-table with all the organisations who are tackling food poverty and food sustainability. So, more money into food banks: £1.1 million. Also money to help the credit unions, in terms of dealing with debt—I'm sure that you've got evidence that that's crucial in terms of affordable credit—the £60,000 we're putting into that. Also, this is all part of the £330 million that, of course, was announced with the £150 cost-of-living payments for households in council tax bands A to D.

I do want to make the point that there was an extra £25 million announced then for local authorities to have discretion around, for example, other bands, band E, whether they need to be able to target that funding. So, we will extend—. The £330 million does include, of course, for the next financial year, an extension of our winter fuel support scheme. I'm almost inclined to not call it 'winter'. I think we should start it in the autumn. We should be getting it cracking; that's what National Energy Action and others are telling us. We need to get this next stage of the scheme off the ground. We've had a good take up, nearly 200,000, with this scheme, and it had to finish at the end of February. We're very thankful to local authorities. They have played their—. They've got the money out and we have to work with them to ensure that they can do, and they will do, the next round of the scheme. So, that's work we're working on at the moment. I do think the extra funding and the flexibilities with the discretionary assistance fund are crucially important. So, all of this are the ways in which, quite apart from targets, plans, this is about actually dealing with this now, and very much part of the whole cost-of-living package that we're recognising is crucial.15

I thought—  

13:40

Minister, I think we—. I note the passion in your voice, but I think if we can just take this one thing at a time. I'm sure there will be opportunities for all of the things you want to cover.

Jane, did you want to come in? No. That's fine. Okay, we'll just move on to Sarah Murphy, who's going to ask about eligibility. 

Thank you very much, Chair. Thank you, Minister, for being here today. So, the fuel poverty advisory panel met for the first time last July, and they talked about the progress on the fuel poverty dashboard. So, we know the dashboard will include data published by the UK Government and Ofgem and other data sources, and will also give consideration to the impact of COVID on levels of fuel poverty. In addition, though, the minutes refer to an online fuel poverty eligibility checker, so that's being developed, that can actually target low-income households who are in fuel poverty. So, can you talk us through how exactly you see the tool ensuring this?

Thank you. Eligibility's crucial in getting the information. We do expect the tool to be available by the end of May, and it is going to enable households to actually check, and particularly those organisations as well who support lower income households to identify, whether any of the home energy efficiency improvements can be provided, for example, through Nest. But it's the end of May.

I don't think there's anything perhaps more to say in terms of this tool, particularly the eligibility checker tool, unless Mark or Steve think there's anything to add at this stage. But it will be available to our partners by the end of May.

Okay. Thank you very much. And just to double check as well, with the revised fuel poverty projections, did you mention in your previous answer that they're due at the beginning of April?

The actual interim—. Obviously, we've got estimates and projections here, which is really important. So, the initial report is due to me at the end of April, and also we'll get some statistics shortly after that. That's due no later than June.

Okay. So, that's something—. So, NEA Cymru said that they would be out in spring 2022. So, at the end of April, we can expect those?

Well, I'm going to certainly get the report, and we'll get the statistics as well. So, we'll get those out in the public domain as quickly as possible.

Okay. And then the last question: do you expect the number of people living in or at risk of fuel poverty in Wales, do you think it's likely to have significantly increased or decreased since the last update?

13:45

Well, we do. I think everything I've said—and I won't go over it again—and everything that we know, is that we do expect to see more people living in fuel poverty, and I think, actually, National Energy Action will have said to you that they've estimated an additional 122,000 households will be in fuel poverty when the price rises in April. A quarter of households in Wales will be struggling to pay their energy bills—that's the serious nature of this. Actually, back in 2018 we had 32,000 households who were living in severe fuel poverty, and we're now talking about 122,000. So, it is going to be severe levels, and it could reach levels that we haven't seen since back in 2008. This of course all led to the plans and the work that we're doing, but that's what the estimates are coming through, and I'm sure you've had them as well.

Okay, thank you ever so much, Minister. Thank you, Chair.

Mark Alexander, did you want to add anything? Because at one point I believe you were—. Okay, that's fine.

I just wanted to ask you, Minister, before we move on to the specific schemes, you said that there have been about 200,000 households taking up the winter fuel payment. From memory, that's of a possible 350,000, so have you had time to reflect on how we manage to reach those other 150,000 who weren't aware of this payment?

A very important question, Jenny, that we're looking at now. Actually, can I just clarify? It was nearly 200,000 applications made to the scheme before the end of February closing date. In fact, I think they haven't all been paid out yet. I think there are about 151,000 that have been paid.

The one thing that comes through, and I won't dwell on this at this stage, but whether it was 350,000—I mentioned that figure that we thought would be eligible—whether it perhaps wasn't that many, I can come back to you with the details of that. But I think there is a serious issue about entitlement and take-up of any benefit, and especially a new benefit. So, I know of people, and you may in your constituencies as well, who you had to go and work with them to fill in the forms. It's still a means-tested benefit. I met a residential social landlord who said they were working with all their tenants; school governors, local authority councillors and leaders are all working hard to get the money through. So, I'll have a report on take-up, issues coming back about take-up as well. In fact, this is something we need to be clear about before we go into the next scheme, where we want to have wider eligibility—because it was specific, and it was mostly those households on working-age benefits, because of the cut to universal credit. But can I come back to you with the final outcome of the take-up of that scheme, with the numbers?

Yes. I think, particularly, it'd be useful to see the breakdown by social tenancies as opposed to private tenancies, or privately owned. Sioned Williams, I think you wanted to pursue the eligibility issue.

Ie, efallai yn benodol ynglŷn—. Cwestiynau cyffredinol, mewn ffordd, ond yn ymwneud â hynny o ran Nyth ac Arbed. Eisiau gofyn sut y gall cynllun ar sail ardal yn y dyfodol, na fydd o reidrwydd yn targedu cartrefi tlawd o ran tanwydd o dan y cynigion presennol, fynd ati yn well i fonitro a dangos tystiolaeth o sut mae'n helpu i leihau tlodi tanwydd. Achos fe ddywedodd y WLGA wrthym ni, er enghraifft, fod y modd y defnyddiwyd data WIMD i benderfynu ar ardaloedd i'w targedu o dan cynllun Arbed yn anaddas o ran codi achosion o dlodi tanwydd mewn ardaloedd gwledig. Felly, eisiau gwybod eich barn chi ar hynny.

Yes, maybe specifically about—. Well, general questions in a way, but related to that, in terms of Nest and Arbed. I wanted to ask how can an area-based scheme in the future, which will not necessarily target fuel-poor homes under the current proposals, better monitor and evidence how it is helping to reduce fuel poverty. Because the WLGA told us, for example, that the way in which Welsh index of multiple deprivation data was used to determine the areas to be targeted under the Arbed scheme was inappropriate in terms of raising cases of fuel poverty in rural areas. So, I just wanted to know your opinion on that.

Well, this is where we have got to be very clear. We're out to consultation now, looking at the next phase of the Warm Homes programme, and it's crucially important that we look at what happened, what the outcome is. Your inquiry will help us do this. You've had that evidence from local authorities. We have to, in terms of the new programme, take into account all of the lessons learned. But I think during the programme, the area-based scheme, there was a call—and it was delivered—for improved reporting on the support that was made available to lower income households under Arbed 3, because, obviously, emerging evidence meant that action was taken. So, there was improved monitoring and reporting. But also you may be aware of the Miller Research household survey, which actually showed that insulation and measures led to a reduction in fuel-poor households taking part in the scheme from 69 per cent to 39 per cent. So, it's always—, Again, it's like the issues about take-up, it's what happened, take-up, and then as a result of measures how fuel-poor households benefited. And so I think that's very helpful from that household survey, which hopefully you've seen; if not, we can share it with you. But also actually helping those very severely fuel-poor households, it was reduced from 30 per cent to 5 per cent, in terms of positive impacts of insulation and measures.

So, I think, overall—and I think we've used this figure quite a bit—for an average household, overall, there was a reduction in energy bills of £330. And I think it's those in severest fuel poverty who actually did benefit the greatest in terms of those proportional savings. So, I think all of that evidence is very important as we look to the next scheme. 

13:50

Ac wrth gwrs, mae'r bartneriaeth gydag awdurdodau lleol yn hanfodol. Rŷn ni wedi clywed yn ystod y dystiolaeth rydyn ni wedi ei chael fod hynny'n gallu bod yn anghyson ac weithiau'n gallu bod yn rhwystr i nod y cynllun. Felly, pa rôl ŷch chi'n rhagweld i awdurdodau lleol yn fersiwn nesaf y rhaglen ar gyfer cynlluniau yn debyg i Nyth ac Arbed, a hefyd i ba raddau ŷch chi'n credu bod gan awdurdodau lleol y capasiti i ymgysylltu â'r cynlluniau? 

And of course, the partnership with local authorities is vital. We've heard during the evidence that we've taken that that can be inconsistent and can be a barrier sometimes in terms of the aims of the scheme. So, what role do you envisage for local authorities in the next iteration of the programme for both Nest and Arbed-type schemes, and also to what extent do you think local authorities have the capacity to engage with the schemes?

These are very important questions, and you will have had evidence from local authorities of good and bad, I think, to be fair. You have had evidence of good examples of joint working. This is going to be a key factor in the consultation, which is obviously still out now, in terms of how the Warm Homes programme works with local authorities. They've got to be absolutely hand in glove. So, we're working with local authorities to get that evidence, to get it right, to get their response to the consultation. And also I've just mentioned the role of local authorities in terms of our winter fuel support scheme. Again, I'm looking at numbers, but I'm looking at where some local authorities manage to get better take-up and are learning lessons from that as well. So, we want to build on the success, learn from when, perhaps, there wasn't enough engagement. Actually, local authorities had to do quite a lot—and you'll be aware of this—to repair the damage done to people's homes through the UK Government's Community Energy Saving Programme back in 2012. That's been a longstanding issue. But we will be taking on board all of the good examples. We're learning from the best in the consultation. 

I think it's difficult to see in terms of how further they can engage, because they've got the UK energy programme—they've got a Warm Homes programme, they've got the UK Government's energy company obligations scheme. We really have got to build those productive relationships. And the Welsh Local Government Association did attend our summit on the cost of living, and the leader of Torfaen County Borough Council, Councillor Anthony Hunt, spoke about how they were taking responsibility, not just on fuel poverty but the whole range of issues to tackle poverty, and it was a very impressive presentation. So, I think it shows it can be done if we work with the local authorities proactively, sharing good practice. The WLGA have got a big role to play in that, of course.

Thanks, Chair. I'm just going to ask a few questions, if I may, regarding procurement and funding, and first of all begin by asking what lessons have been learnt from the procurement exercise for Warm Homes that was undertaken back in 2017. 

13:55

Thank you, Ken. This is crucial, that we learn the lessons, isn't it, in terms of the procurement procedures and impact, and what came out of it. What we're particularly looking at now is an integrated impact assessment that's going to be published alongside the Government response to the consultation on the next iteration of the Warm Homes programme. Particularly, we can look at this in terms of the impact of what the procurement meant in terms of the delivery. But, I think it's going to be the Minister for Climate Change who's going to be the key person in terms of taking this forward; it's her responsibility. Also, I just want to say that this is something where we've got to look at the energy efficiency of lower-income households. That's where we've got to target this. I think it's also really important to look at issues around the fact that retrofitting homes has to be appropriate to the needs of the householder. I don't know whether Mark or Steve want to come in on this question, because you've been heavily steeped in this.  

Who'd like to go first? Steve, do you want to go first? We need somebody to unmute you. 

There we go. Thank you, Minister. Yes, indeed, we worked very heavily with Audit Wales in the production of those reports in terms of the lessons learned from the last procurement exercise for both Nest and Arbed, and we have learned lessons. We've employed technical support from the Building Research Establishment to help us with the next iteration of the Warm Homes programme contracting, and they're working with us now as part of the consultation exercise on that. Certainly, we do need to be, first of all, very clear in terms of the eligibility for the Warm Homes programme, that we need to make sure that it's marketed, and that's included in the specification. But also, we're actually targeting the support that's needed to the households that most need it, so it comes back to that worst-first approach that the Minister has already cited in the fuel poverty plan. 

I think it's fair to reflect on the Audit Wales report that said there were some difficulties with an area-based approach when we're focusing on fuel poverty. That's not to negate the need to improve energy efficiency, because whilst a number of homes perhaps with Arbed weren't necessarily in fuel poverty, they were at risk of fuel poverty. With the price increase that's about to hit at the moment—that 54 per cent increase that the Minister referred to—many, many of those households would have found themselves in fuel poverty, if not in severe fuel poverty, if we hadn't supported them through the Arbed scheme over the last three years.

There are also questions in terms of the lessons learned about getting the right price for the investment that we're putting in, to make sure that the householder has informed consent as well. We need to make sure that there are arrangements in there, but also in terms of making sure that the key performance indicators from any future contract are responsive to that need. One of the difficulties an area-based approach encountered was identifying households where the energy efficiency was an F or a G-rated property, which is quite difficult at the moment because only about 6 per cent of households in Wales at the moment, according to the housing conditions survey, are rated as an F or G-rated property. We have to make sure that the metrics are right in any future scheme so that they can actually deliver on the ask. 

Thanks, Chair. Thanks for those pretty comprehensive answers. Just moving on to the requirements of the Well-being of Future Generations (Wales) Act 2015, how are they going to be reflected in the procurement strategy for the new Warm Homes programme? 

We've got to look at this, and recognise the work that the Future Generations Commissioner for Wales has done on this as well. We have got to demonstrate how the seven well-being goals and five principles of sustainable development—. They've got to be taken into account in terms of the way we move forward. I would say this is crucial to the next iteration of the Warm Homes programme anyway, but to achieve the goals required under the Act there's got to be collaboration, much greater collaboration, to get the success that we need in the way that Steve has identified. 

14:00

Thank you. Finally from me, how can we go about designing a procurement system that encourages more tender bids, a greater volume of tender bids? 

This is crucially important, and it will come out of the final stages of the consultation, when it's completed, on the Warm Homes programme, and then the procurement stages as they come forward from that. I think Steve has mentioned the fact that we're working closely with the Building Research Establishment, because we've got to look at what the market is like, what the interest could be. We need to develop the Welsh supply chain and manufacturing base. Some of us will recall this last time it came round, and we just need to ensure there's a really robust programme of engagement with the supply chain. We've got to have awareness of the work that's being undertaken. Obviously this is for the Minister, it is for Julie James, but your comments coming back today, and also the lessons learned, are going to be very important to ensure that we do get a much wider range for the procurement at the next stage. 

Thank you, Chair, and good afternoon, Minister. Do you agree with the future generations commissioner and the New Economics Foundation that £73 million per annum is needed to fund the Warm Homes programme up until 2030? Do you agree with that assessment?   

It's always very helpful to have the reports, like the one from—. I mentioned the engagement of the future generations commissioner and the work that she commissioned with the New Economics Foundation. It's a very, very welcome addition, that report. And obviously I've mentioned already the sums of money that we've agreed to in the budget in the last couple of weeks. I think this is also about the fact that this is invest-to-save, isn't it, and it's also about jobs. I think it's very interesting that the report is talking about a Welsh housing decarbonisation programme. That, in itself, could create 25,000 new jobs in Wales by 2030, but also save £8.3 billion, I understand, in energy bills. And there are health and environmental benefits coming through from this. So, there's a lot in that report, Samuel, that we do embrace in terms of the contribution, because it will have economic returns as well as reducing levels of fuel poverty. But it's also about well-being and it goes back to the seven goals and the five ways of working. It's very, very valuable.  

Does that £73 million per annum equate to what you as a Minister in the Welsh Government would be looking towards? Is that bottom end or top end of your assessments? 

We have obviously already made announcements through the budget in terms of the home energy efficiency scheme. I think, in terms of ballpark estimates made in reports like that, it's very useful. But we need to be able to be realistic, and, in terms of priorities and what can be delivered, we need to then look to our own estimates in terms of budgeting. I think we've already identified that the investment that we make is going to have a huge benefit in terms of impact—health, economic, environmental. So, it's a very useful contribution to the budget process. 

Okay. I'm grateful. Thank you, Minister. Thank you, Chair. 

14:05

Diolch yn fawr iawn, Gadeirydd. Diolch yn fawr iawn, Weinidog. Prynhawn da. Rydych chi wedi sôn dipyn bach am dai mewn llefydd gwledig yn gynt. Dwi eisiau jest gofyn beth ydy'r opsiynau ar gael, os gwelwch yn dda, ydych chi'n meddwl, yn Llywodraeth Cymru, i helpu tai mewn llefydd gwledig, yn enwedig tai sy'n dibynnu ar olew. Diolch.

Thank you, Chair. Thank you, Minister. Good afternoon to you. You mentioned homes in rural areas earlier. I just wanted to ask what options are available within the Welsh Government to help homes in rural areas, particularly those that rely on oil. Thank you. 

Thank you very much, Jane. Thank you for the question. I think you asked me this question last week; it was very valuable before today. On heating oil in rural areas, I've already mentioned in terms of the off-grid, the impact in terms of the cost of oil, et cetera. What was important was that we did keep that discretionary assistance fund ongoing, and look at extending the flexibilities, which we know you will support, but also that we get that emergency financial support, which particularly helps those in rural areas, including oil and liquid gas purchases for off-gas-grid households. So, that is all part of the £330 million package announced. Also, in rural areas, they will benefit from the £150 cost-of-living payment, and I've mentioned the £25 million, which will be more flexible for local authorities to go beyond bands A to D. But also, our winter fuel support scheme, I think, is very important, and we can look at how it can reach more households. 

I think increased funding levels available to improve energy efficiency for off-gas-grid homes are important, through our Warm Homes programme. I think I did mention this in my written evidence to the committee as well, because we just need to make sure that there's a focus on rural homes. In fact, I was just looking back at the evidence that I gave, and it mentioned the fact that this was a particular issue for rural areas. I looked at the Climate Change, Environment and Rural Affairs Committee report on fuel poverty previously in the fifth Senedd, and that had an impact on the Warm Homes programme, with recommendations that came through that all being adopted. So, I can assure you that the focus on the rural households in terms of fuel poverty is being closely addressed. I don't know if Steve or Mark want to add anything to that.

Thank you, Minister. I think it's important to note that under the current Warm Homes programme there are higher financial caps that are available for housing retrofit in rural off-grid areas, and it can make the difference between a maximum grant of £5,000 or £8,000 to £12,000, so that additional support has been made available for off-grid areas.

Some of the difficulty that we've encountered with the Warm Homes programme is that many of the older properties in rural areas perhaps don't lend themselves to some of the retrofitting techniques that we would normally deploy to transition people, for example, to low-carbon heating. Unless we are able to improve the thermal and energy efficiency of those older properties, then a just transition to low-carbon heating perhaps is going to be more problematic. Certainly, they are the lessons that we are learning from both our schemes and UK Government schemes, about how we make sure that we are able to make that transition as just as possible, to transition away from fossil fuels to low-carbon heating, without causing severe difficulties for people and for bill payers in those areas. This is something that's very much at the heart of the consultation exercise on the Warm Homes programme that the Minister has already mentioned.

I think it's also worth just commenting that the Welsh Government made strong representations to the UK Government on the energy company obligation scheme, which initially had been proposed not to support off-gas-grid homes in rural areas, because the UK Government has different mechanisms to support those homes in England. But on our representations here at the Welsh Government, the UK Government has decided that the new energy company obligation scheme will still be available to support off-grid homes in Wales and indeed in Scotland, because that need does exist and we do know we need to do much more to engage with people and householders in those areas, to make sure that they are aware of what support is available to them.

14:10

Diolch yn fawr iawn. Cadeirydd, ydy e'n iawn os dwi'n jest gofyn os yw Samuel Kurtz eisiau jest dod i mewn yma, os gwelwch yn dda, jest i roi ei brofiad o, os yw hynny'n iawn? Diolch.

Thank you very much. Chair, is it okay if I ask whether Samuel Kurtz just wants to come in on this point, just to provide his experience, if that's okay? Thank you.

Okay, fine. Samuel. Can both Members and Minister and officials be brief in your answers, because we've only got until half past?

And I'll be incredibly brief in asking the question. Thank you, Chair, and diolch, Jane. I live in rural Wales, I ordered oil only last week and saw the price increase from when I previously ordered oil. But anecdotally—and I don't like using anecdotal evidence in these sessions—but anecdotally, I've been told of companies locally who are unable to give a price to customers when they're calling up to order; basically, the customer having to order blind, not knowing what that price is. Do you think that is, firstly, acceptable, and (b) do you think that there needs to be stricter management around companies such as oil distribution companies, so that the consumer is able to have a clear and concise understanding of what price they're paying for fuel, be it at the high end in the situation that we're in now, or even when oil does hopefully come back down to a lower price?

It doesn't sound acceptable to me at all, and I think we're very much now in the hands, aren't we, of those distributors and companies. So, I mean, Stephen can—. Without answering, I think we can take this back now, because we have our contacts directly with the companies. Anecdotal is good enough, Sam, on this occasion, because this is your constituents as well as yourselves, living in rural areas. But also, I think we have got to start looking—and I've been talking to Julie James about this—at new arrangements, whether we should have community and village arrangements for supply, access to supply, for example. There are a few examples in Wales and in other parts of the UK.

So, I think we can't just leave this to the individual household. We've got to find a way of enabling them to access oil. I think the same goes for gas, Calor gas, as well, actually; I've been hearing some feedback that that's also—. People are very at the mercy, and people are buying small amounts because they can't risk whether they can afford to pay for a larger amount. That should not be the case in this day and age, that we're in this situation. So, thank you for raising it, both Jane and Sam.

Thank you, Chair. Just looking at the decarbonisation and how that fits together with the agenda to tackle fuel poverty, so we heard a range of views from people and organisations about whether it is actually possible to tackle both decarbonisation and fuel poverty objectives under the one programme. Stephen, you've already mentioned that this is particularly difficult in rural areas, because people can be living in a band E home, and it may well be that their properties just can't really be upgraded and so for them, the solutions need to be different. The Future Generations Commissioner for Wales has said that these programmes definitely need to come together. People who are living in poor quality homes are disproportionately living in poverty in other aspects as well. So, I was just wondering what the Minister's views are. Do you think that a single programme can actually tackle both fuel poverty and decarbonisation, and what are some of the challenges to this approach?

It's so important, this inquiry, that you're looking into that, and you're getting that evidence. I'd say it's a challenge, the 'but', in terms of the objectives that we are committed to. Welsh Government and you all are committed to decarbonisation and tackling fuel poverty, those are our priorities, but we're going to have to consider this as a result of the consultation on the Warm Homes programme, how we bring it together, because that programme's got to satisfy both policy priorities, maybe striking the right balance between housing decarbonisation and safeguarding low-income households from living in a cold home. But it's imperative that we do that.

I've been responding to, 'What do we do now?' Well, we've got to move in terms of the cost-of-living crisis, the fuel and energy crisis; we've got to focus on our renewables. We've got to get on with what we should be doing in terms of own sustainability in terms of energy and being in charge of that as much as possible. So, we can't push more people into fuel poverty, clearly, as a result of the consequences of repairing building fabric and avoiding fossil fuel solutions, but we have got to—. There are ways in which we can bring this together, and I think the evidence that you're taking will be very valuable to this, but also be fed into the consultation on the Warm Homes programme. Everybody sees this as, perhaps, a dilemma and a challenge, but we've got to address both priorities.

14:15

So, you think it's unlikely then that they'll be ever be split into two programmes? You think they'll always stay with the one?

Well, in a sense, in terms of the programme of delivery, there may be different elements and there may be another route to this in terms of tackling fuel poverty, but we're looking to try and see these as policy objectives in the Warm Homes programme, aren't we, Stephen? Mark and Stephen are nodding, they don't need to say anything else. We've got to do it. And in Wales, we should be able to do it, because that's what we signed up to.

Okay. Thank you. The other point that I was going to make, then: we heard a lot of organisations tell us that, in some cases, it really did feel like it was a boiler replacement service. So many homes just had a replacement boiler, and that was very much to the detriment of boiler repair, fabric improvements or alternative heating systems. And now, as Sam has touched on, and Jane, those energy prices are going up, so a lot of these boilers have been put into homes that were already struggling and identified as needing help with fuel poverty, and now they've got a brand new boiler that's actually costing them a lot of money. So, again, this is one of those points, I suppose, where maybe you can see the objectives haven't aligned. And you said also that you work with the climate change department to cover a lot of these areas. So, going forward, how are the departments going to work together to ensure that a coherent approach is put in place to tackle both fuel poverty and decarbonisation goals?

This is something, again, where—. Julie James is responsible for the Warm Homes programme and taking this forward as a result of the consultation. I'm working so closely with her in terms of tackling fuel poverty. I think home energy efficiencies are crucially important in terms of the whole-house assessment and that we just need to look at this very carefully. I don't know whether you're aware of the review by Pennington Choices, and if you're not, anything like this needs to be shared with you to make sure that we address these issues. Again, the whole issue of the gas boiler. Did it become, as you said, a gas boiler scheme? We know how many of our constituents actually were desperate for this and it was thought that that was going to help tackle fuel poverty, but we have got to recognise that this is—. If we can look at insulation, the home energy efficiencies, the most appropriate methods, insulation is often the best low-cost energy efficiency measure, so you don't necessarily have to look at boilers or the replacement of inefficient boilers. Can we share the Pennington Choices report with you, Chair? I think that might be helpful.

So, you say that you can't push more people into fuel poverty, but as it's a racing certainty that the fuel cap is going to be further raised in October, what is the capacity of the Welsh Government to mobilise this fabric-first approach, particularly in light of the impending additional rises that are almost inevitable in October?

Well, we have got to press ahead with this to ensure that we do get, as I said, that we do recommend that approach to the whole-home approach, the fabric-first approach, but also that this is absolutely appropriate in terms of what we can do. Pennington Choices, perhaps that will help you in terms of this issue, but it's crucially important that this comes out of the Warm Homes programme.

I know that there is a sense of frustration because we haven't completed that consultation, and it would be good to feedback the results of that into your inquiry. But I think it will help us to actually move forward, the questions that you're asking about that. I don't know if, Steve, you want to add anything at this stage to reassure you that we are looking—as I said right at the very beginning—in terms of the fabric-first and worst-first issues. That's what we're looking at, isn't it, Steve? You're muted, Steve. If you haven't got anything to say, that's all right, you can just nod. [Laughter.]

14:20

No, you're absolutely right, Minister. In terms of the whole-house assessment, it was very much that they were the recommended measures that came out from the whole-house assessment, to put in a replacement gas boiler, which, whilst it seems perverse to do that, does actually save energy and carbon emissions by putting in a more efficient gas boiler, and it does result in a saving in terms of those household bills—an average annual saving of about £300—and that's what we need to develop going forward. But in terms of insulation, 97 per cent of households already in Wales have roof insulation. Now, there are some cases where that could be topped up, but 68 per cent of households in Wales have cavity wall insulation, so a number of those fabric-first measures are already in place, and that's why the whole-house assessment is so important.

Okay. Obviously, there was considerable concern that we were putting in gas boilers and we weren't dealing with the leaky windows and doors. So, is the new—? You know, the next six months are crucial, really, given the international situation. Does the Welsh Government have the capacity to really raise its game on insulating homes in advance of some of the optimised retrofit programme developments?

I think so, because we've put the £30 million into the budget two weeks ago. That doesn't mean to say that we're—. The work is funded, it's under way. And you're absolutely right, Chair, I mean, this is about what's going to happen in October. The cap, it might rise again and it is a serious, serious issue, and I know that you have other questions to ask, but this is such a critical time that you're doing this report, because it's not just heating or eating; yesterday, it was Martin Lewis talking about starving or freezing.

Okay. So, if there's further information that you're able to provide us with on insulation and how you're actually going to really push forward on this in the next six months over the summer, we'd really welcome that, because I think that that's crucial.

We'll get that information, just like what's happening now up until—

Thank you, Chair. I was just—. Forgive me, my computer's having its funny moment again. But I was just wondering with regard to how confident Welsh Government is on the types of technology and skills required for longer term, at scale, really, so that the industry can confidently invest in them now.

Crucially important again in terms of the—. This is all being fed back in the current consultation on the Warm Homes programme. We've obviously got to draw on best practice in terms of the industry in terms of installation quality and the questions you've just been asking, Chair—you know, evolving retrofit standards; all of this is developing, it's developing all the time. So, it's the regional skills partnerships—that comes under Vaughan Gething—that are responsible for skills priorities across Wales. They have been working with employers to look at the next three-year employment and skills plans. They're going to be published in 2022. And we have got a specification now—a publicly available specification—in terms of the framework for the application of energy retrofit measures to existing buildings and best practice for their implementation. So, we're doing everything that we can to meet those challenges.

Thank you. Because there were issues around the cavity wall insulation previously, in being implemented in wrong geographical areas and increasing the risk of damp within properties. And that is a lesson to be learnt there, isn't it, in terms of the technology and the skills that, what something is being rolled out, it's doing so in the very right area. Is that something that's on your radar as a lesson learnt, as it were?

14:25

Well, yes. That does go back to some of the things that we're talking about in terms of area-based work; it certainly goes to the whole house-assessment approach, fabric first. It is difficult, in terms of the cavity walls issue in terms of responsibility, private householder responsibility et cetera, but, yes, that's all going to be fed into. The evidence is already there, but it's also response in the consultation to the Warm Homes programme.

Excellent. Thank you. And—[Interruption.] Sorry, Chair.

Sam, could you allow Jane Dodds just to ask a question?

Really quickly, one of the pieces of evidence we took was about the lack of people who are skilled in putting in heat-source pumps, and it's just something to flag up. So, just if that could be combined, as well, with your overview with Vaughan Gething, around the skills that are needed as well. Thank you. Diolch yn fawr iawn.

Yes. That's very topical and relevant but fairly immediate, isn't it? So, that will all be factored in to the regional skills partnerships for their plans for the next three years.

Thank you, Chair. When the net-zero skills action plan will be published, do we have a time frame for that, on how it will support decarbonisation and fuel poverty ambitions at the same time? Because I would argue that they're both sides of the same coin.

Yes. Well, this does go back to the regional skills partnerships, because they've got to determine skills priorities across the area. They've been working to get that intelligence, to inform the development of the, as I said, three-year employment and skills plans. Absolutely the same place, as you say, Sam.

And back to the heat-source pumps et cetera, this has now got to also be up to scratch with all of the latest technology. So, yes, it's all been factored in. But, obviously, your report will, in a way, I'm sure, have recommendations or observations that don't just cover my portfolio but Vaughan's as well in terms of regional skills partnerships, Julie James, clearly, as the Minister for Climate Change. So, it's very much a cross-Government responsibility.

Sorry, so, just to clarify: do we know when that net-zero skills action plan will be published? Is there a time frame?

They're going to be published this year—which month, I don't know if Steve can tell us—but we can let you know via Vaughan Gething's department.

I'm grateful. Thank you, Minister. Diolch, Cadeirydd.

Thank you, Chair. I'm just going to ask, just finally, a couple of questions. First of all, if you could outline, if that's possible, how you're going to support the development and the implementation of ECO in Wales, and what the barriers are to maximising the benefits from the scheme to date. And then, secondly, if you could just outline what your expectations are for ECO4 and how it's going to align with the Warm Homes programme, given their obvious similarities.

Thank you very much, Ken. Well, I think you heard back from Stephen earlier on about our influence—the Welsh Government's influence on the UK Government—in terms of of the ECO obligations. Obviously, the ECO scheme is a UK scheme, and it obliges energy suppliers to deliver energy efficiency and heating measures to homes across the whole of Great Britain. And the current scheme comes to an end at the end of this month, so I think this has been something that other committees have looked at as well in terms of previous committees and how local authorities engage with this—and we mentioned that earlier on.

So, ECO4, there was a consultation on that by the UK Government, and I think there is the option of a greater role for the Welsh Government in this. So, I don't know whether, Stephen, you want to say any more about that, but I think that gives you some encouragement that we may have a greater grip on this to make sure that it's compatible with the future Warm Homes programme and the optimised retrofit programme. We are engaging as closely as we possibly can, and it will be important that we have maximum influence on it as well. I think local authorities—. The WLGA, again, is talking to us about how they can have a much greater role in terms of engaging with this, because, financially, it could also be very valuable to us in terms of retrofitting lower income households. 

14:30

Yes. Thank you, Minister, just to follow up on that point, under ECO3, initially, that was the first element of the scheme in 2018 that came into the affordable warmth element of housing retrofit. At the point when the last committee hearing was taking place, only about half of local authorities had had the capacity to actually engage with what they called the ECO Flex scheme, where local authorities could define their own eligibility criteria to try and leverage in investment into their areas. After the committee reported, a number of other local authorities published what they called a statement of intent that set their local eligibility criteria, but, nonetheless, the take-up through the ECO Flex scheme wasn't as great as we would have liked, and one of the recommendations from that last report was that the Welsh Government should do more to co-ordinate activities between local authorities. We made those representations to the UK Government, and one of the consultation questions, which we're expecting a response to any time now, is that there is a role here for the Welsh Government to determine what those eligibility criteria should be and how we can help local authorities to make those applications and get that investment.

It's incredibly important, as the Minister has already stated, because the next iteration of the scheme is expected to run over the next four years and is potentially worth £4 billion across Great Britain. So, as much of that money as we can leverage into Wales for affordable warmth will obviously benefit the people of Wales and then we can make sure that the Warm Homes programme is complementary and not competing with the ECO scheme in Wales.

Thank you for that. The clock has beaten us, but, clearly, there are a lot of very important consultations coming to a conclusion, which, hopefully, will enable the Welsh Government to bring all this together so that lower income households, in particular, are going to be able to lower their heating bills in the future. Thank you very much for your participation. We will, of course, send you a transcript of everything that you've said that you'll be able to check for accuracy, and we hope to complete our report towards the end of April so that you get that as well as all the other things you're expecting from other people. So, thank you very much for your participation.

3. Papurau i’w nodi
3. Papers to note

So, members of the committee, if we could just note several papers in relation to the Welsh Government's response to our childcare report, which will be debated on 30 March in the Plenary session; correspondence from the Senedd Commission on the use of the term 'BAME'; correspondence from Travelling Ahead; and correspondence from the Enforcement Conduct Board regarding debt enforcement, which is obviously highly relevant to our debt inquiry report last year. Does anybody wish to raise any issues around those reports, or can we just agree to note them for the time being? Thank you.

4. Cynnig o dan Reol Sefydlog 17.42(vi) a (ix) i wahardd y cyhoedd o weddill y cyfarfod
4. Motion under Standing Order 17.42(vi) and (ix) to exclude the public from the remainder of the meeting

Cynnig:

bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(vi) a (ix).

Motion:

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

Cynigiwyd y cynnig.

Motion moved.

I'd now like to move a motion to exclude the public from the remainder of today's meeting, if that's agreeable to Members. Thank you. Please could you let us know once we are in private session?

Derbyniwyd y cynnig.

Daeth rhan gyhoeddus y cyfarfod i ben am 14:34.

Motion agreed.

The public part of the meeting ended at 14:34.