Don’t Ignore those Rationing Their Energy Use

Keith Baker – 7th October 2021

As energy prices are due to rise, we can’t ignore the plight of those rationing their energy use

My undergraduate dissertation project was an analysis of the relationship between heavy metal concentrations in soils and stream sediments in England and Wales, a tiny contribution to a much bigger project studying factors linked to outbreaks of bovine tuberculosis (conclusion: don’t blame badgers). It taught me a very important lesson – always pay attention to residual data.

Residual data are those points on a plot that are so far from the others that they don’t seem to make sense. When confronted with such data a good scientist will first try to verify whether they are real, or the result of a problem with the data collection method and then, if they are real, investigate them further. A bad scientist, or one trained in traditional social science methods, will usually assume they’re errors, draw a line through the plot, report the usual measures of statistical significance, and move on. And until a few years ago, this was what Ofgem was doing with household energy data. But then this is the same regulator which treats Economy 10 tariffs, to which around a third of Scottish householders are subscribed, as ‘non-standard’.

This means that, for many years, Ofgem was effectively able to ignore the existence of one of the most vulnerable groups of energy users – those householders who severely ration their energy use, or disconnect themselves from their supplies. These are householders who are so fuel poor that they will put a small amount of money into their prepayment meters each month, say £20 to £40, and when it runs out, they do without. In a so-called modern society, it should be seen as a scandal that they exist. 

Yet it was a late as December 2020 that Ofgem concluded a process that has led to the introduction of some, fairly limited, measures to support these householders. A welcome development, but one which was too little, too late, and enacted by a regulator that has long been unfit for its purpose.

Back in 2015, I led a project that identified a number of self-rationing householders in Scotland. We didn’t set out to find them, it was simply a case of spotting some residual data points, verifying them, and then investigating further. We only had access to a tiny fraction of the data that passes through Ofgem’s hands, but we listened to what our project partners were telling us, and that evidence made its way into EPRi’s founding statement.            

We still don’t have a definitive picture of the numbers and types of householders who self-ration or self-disconnect, but a 2017/18 report by Citizens Advice found that around 140,000 households with PPM’s (16%) self-disconnected from their energy supply because they couldn’t afford to top up their prepayment meter. 87% of these were on benefits, and 88% contained a child or someone with long term health issues. 72% were vulnerable to cold homes (containing children or people with health issues), 34% were in full time work, 63% were under the age of 34, and only 9% had contacted their supplier for help. Anecdotally, they also found a correlation between the rising use of food banks in areas where Universal Credit was being rolled-out in Scotland due to the hiatus in people receiving their benefits payment. 

That latter point chimes with our own evidence on how fuel poverty can be a temporary condition, but one which affects householders more the deeper and longer they fall into it, and the more they are affected the longer they take to recover from it. Now think of how badly these householders will have been affected by Ofgem’s prolonged inaction.   

But it’s also too simplistic to put all the blame at Ofgem’s feet. Our own research has pointed out how the Scottish Government could’ve been doing much more to support fuel poor and otherwise vulnerable householders through better resourcing of those organisations – specifically local authorities, housing associations, Citizens Advice Bureaux, and community-based energy advocacy organisations (and specifically not the Energy Saving Trust) – who are best placed to support them. Some of these organisations have been doing just that through providing discretionary funding on an ad-hoc basis but, through no fault of their own, this amounts to crumbs from the table. 

And, whilst we’re at it, we need a change in language. This may seem like a minor point but these householders are not, as termed by Warmworks who manage the Warmer Homes Scheme, ‘customers’, they are clients. A customer is “someone who buys goods or services from a shop or business”, whereas a client is “a person being dealt with by social or medical services”. At least below a certain level of consumption, energy is an essential service, and people don’t shop around for benefits if they can’t afford it. Due to a phenomenon known as verbal overshadowing, how we talk about them mentally frames how we treat them. 

The Scottish Government is now due to publish its long-delayed Fuel Poverty Strategy, just as energy prices are due to rise significantly as we enter the winter heating season. The contents will tell us a lot about how seriously it is taking the problem and how strong its commitment to evidence-based policy is. Our experience to date leads us to expect this will, again, be more style than substance, so we’ll be paying close attention to the details.  

Dr Keith Baker is a Researcher at the Built Environment Asset Management (BEAM) Centre, Glasgow Caledonian University; a Co-founder of the Energy Poverty Research initiative; and a member of Common Weal’s Energy Working Group.