Equality and Social Justice Committee

I'm on mute.

No, you're fine, you don't need to—

Yes, certainly. Just a quick introduction from myself, I'm Jonathan Cosson, the chief executive of Warm Wales, a community interest company based in Port Talbot. It's been operational and been delivering work since around about 2004, targeting poor housing stock and trying to alleviate fuel poverty through community engagement projects and partnership working. We've been involved with Nest since the very start, since it first launched, and we've done a good couple of hundred applications and installations through to completion.

My evidence, really, today will be anecdotal. I read a lot of the National Energy Action high-level report on their evidence for this, but what I wanted to give was really on-the-ground experience of how it is for organisations that are actually applying to Nest through to final installation with engagement with the community members that are receiving the installations and how the actual scheme works on a day-to-day basis.

Overall, Nest has been very, very successful, I think. We've allowed a huge amount of people to improve their housing stock and have energy efficiency measures installed. Despite that, there is room for improvement. I don't think the amount of money that is going into the scheme is necessarily large enough, to start with, and what we tend to find is that the individuals that we work with, because they can only apply to the scheme once and there is a price cap or a grant cap terms of how much they can apply for, tend to go down the route of wanting a boiler automatically. Our experience and our ethos within Warm Wales are it should be fabric first, and we should be looking at sometimes the lower cost measures and not automatically jumping straight into having a gas boiler installed. But, naturally, home owners tend to deviate away from that. They see the big-ticket item that they're eligible for and jump straight into wanting a gas connection, or, sorry, a gas boiler. So, in terms of the overall scheme, generally positive, but room for improvement, and perhaps we can go into a little bit of detail about the eligibility routes and the measures that are available later on in the discussion.

Thank you very much. Before I go to Victoria, have you got lots of lovely birdsong outside your window, Jonathan?

No, is that myself? I thought it was being—

No, I'm not sure who it is, but just to say to the sound recordists, I'm getting lots of sea shore and then bird sounds, and I don't know where that's coming from, because everybody else is muted, but perhaps the sound recordists can sort that out.

Victoria, I wondered if you could just briefly give your assessment of the Warm Homes programme, in how well it's tackled fuel poverty. Obviously, we've got your papers, both of you. Victoria.

Thank you. My views about the Warm Homes programme are not from the operational side, as you'll appreciate. I think we would recognise the contribution that it's made to removing or certainly easing the pressure on families who have benefited from it, and I don't want to say anything that implies that it hasn't been helpful to people who have participated in it. But, I think, stepping back from that, I'd see two big challenges in the programme. The first one is scale. It really is a drop in the ocean compared with the challenges and the number of people who are in fuel poverty, and I think we'd also see an issue of focus: is it a fuel poverty programme, is it a crisis boiler replacement programme or is it a decarbonisation programme? And the big picture is I'm not sure it's doing any of those as well as it could, but that mustn't detract from the benefits that people have gained from it.

Okay. I think you're right to point out that there are some quite significant issues that are now coming back to bite us in the context of the massive rises in energy prices. Could you outline the concerns you may have about the end of Arbed last November? The new programme is not due to come in until next year, in the 2023-24 financial year. So, Victoria, do you want to start off on that?

Yes. Well, hindsight is a wonderful thing, and I'm sure if it had been known what was coming down the line maybe Arbed would not have been wound up. I think to step back from any measures to reduce fuel costs right now is not the best thing to be doing. It might have been right to have stepped back on Arbed because it wasn't particularly—. I mean, it had an area focus rather than necessarily on people in fuel poverty wherever they lived, but nevertheless, I think it's a huge misfortune that here we are with the biggest rises in prices and one of the planks in energy efficiency and fuel poverty having stopped.

Okay. Jonathan, you mentioned that you'd been involved in just over 200 successful applications, and then in your paper you talk about how in the last six months you've supported 65 households. That, to me, seems tiny. I mean, I appreciate that you're not the only agency involved here, but this is—. When Victoria is talking about the scale required, we just haven't even touched the sides, have we?

No, I completely agree. I think what we need to do is an area-based approach alongside the demand-led projects. There's definitely a need for an Arbed-type scheme because they allow us to tackle flats, terraced properties, and the demand-side programmes sometimes struggle with that, especially when you're looking at technologies such as external wall insulation. Whereas we can get them through the area-based approach, you tend to get far better community buy-in, and you need that sort of buy-in to get the insulations installed. Again, economies of scale: the cost comes down when we have an area-based approach—I think that noise is me—as opposed to individual properties and pepper-potting across the country.

So, the loss of Arbed was very disappointing; equally, we understood why there was pressures on it, both in terms of COVID and Brexit, and the delay in some of the insulations that were happening. But for us to have a black hole now in terms of an area-based approach is worrying because we've still got another over 12 months of the Warm Homes programme in the iteration that it is at the moment. And, like you mentioned, we are doing individual properties here and there, but the scale of them is so small that we're not going to tackle the larger issues that we've got facing Wales at the moment.

However, from your paper we can see that Arbed was really not fit for purpose. I mean, there were some pretty massive issues both in the way in which Arbed operated—not very customer-focused—and also there were differences in the costing arrangements between Arbed and Nest, which, surely, should have been sorted out earlier. What efforts did you, Jonathan, make to point out to the Government that there were some massive disconnects and holes in the way in which the whole programme had been set up?

In terms of Arbed, we had very little impact. Our work tends to be around the individual and the engagement with an individual householder on a face-to-face basis. So, our role within Arbed was very limited, so I can't really comment on that. That's why, in the paper that we submitted, it was mainly focused, primarily, on the Nest scheme.

Okay. But, nevertheless, the Nest scheme doesn't seem to have been a coherent offer and nor was it focused on the needs of individuals who, in most cases, are quite vulnerable.

Yes. The big issue that we find, in terms of Nest, is that it should be targeting vulnerable households. They're the ones that need the most support and hand holding through the process, and what we tend to find a lot with the Nest applications is that dialogue from Nest back to the home owner or the applicant is very, very limited. And unless you have a third party, such as Warm Wales, holding the hand of the home owner through the application, information gets lost, it doesn't get fed back to the home owner, and as soon as Nest have a gap in service, the application is either cancelled or delayed and, in some instances, we've been waiting seven, eight months for a survey to be conducted. So, in terms of the engagement from that home owner, who is vulnerable, who is isolated, and needs additional measures, sometimes, to be helped through the process, even a couple of weeks' gap is enough for them to switch off and disengage. And when we've had six, seven, eight months waiting for an electrical survey to be installed, it's not fit for purpose, in that sense, and the installations do drop off and we lose the engagement of that individual.

So, any reiteration or new version really needs to come down or organise better the planning and the communications between Nest, the home owner, and the organisation that's helping the individual. The people that we've been able to help have gone through because of the fact that we've been able to help them as a third party. If it's a vulnerable household that's trying to do this on their own, the likelihood of that success is very, very limited, from our experience, and they need the hand holding, they need the additional support, and the way that Nest is set up at the moment, in terms of communications, in terms of having to supply photo evidence, for example, to show that the room is empty before work can be conducted, none of that's conclusive of a good, robust scheme that will help an individual that needs additional support.

Okay. Thank you very much. While I ask Victoria to comment on the success of both schemes, I wondered if the sound recordist could have a discussion with Jonathan about the sound. They're very lovely sounds, but they're rather dominant, and I'm not quite sure what's going on. So, I think what will happen, Jonathan, is that you'll be asked to go into a side room, electronically, to have that discussion. So, if the sound operator could—. Have we got your contact details to enable us to have a conversation about it? Okay. Thank you.

Victoria, we shouldn't have started from here, surely. Why has this not been rectified before now? Jonathan's got some really good examples of how Nest isn't customer focused, and the Arbed programme underspend speaks for itself.

My knowledge of how it's worked, operationally, is primarily from some of the reports about Nest and Arbed, particularly from Audit Wales, and I think what you can see there is a good intention that drifted, I suppose, and it became very much about boiler replacement. Given the issues that Jonathan described, in terms of lack of communication and so on and so forth, my experience in very different fields is that if those things aren't put in the procurement arrangements, then businesses don't have the incentive to deliver. I think, knowing people who have participated, anecdotally, in Nest and Arbed, those kinds of things around lack of communication, or expecting rooms to be clear, and expecting attics to be empty and all that sort of stuff, are incredibly off-putting, particularly for some of the older people who might be participating, or people who have some of the other conditions that make them eligible.

I think all of this comes back to the way in which the programme's been conceived. The programme, it seems to me, is neither about energy efficiency nor about fuel poverty. It's there in the language—it's about vulnerable people. Well, most of the people in fuel poverty are in fuel poverty because they've got a low income, because they work in a low-paid job, or because of their household circumstances, or they don't get enough through the social security system. They don't necessarily have some sort of incapacity, and I think we've ended up with this almost residual sticking-plaster approach that, for me, and for us, doesn't succeed on either the energy efficiency or the fuel poverty front. Now, I don't know whether the origins of that are in the contract specification, in the programme design; I'm not sure, but certainly I would agree that it's falling short of what we might reasonably expect of it.

Okay, well, we'll obviously try and explore those further. Sarah Murphy, would you like to ask your questions, please?

Thank you, Chair, and thank you, Victoria. You're the only one here at the moment, so I'm going to start with you. Thank you for being here today and answering our questions. I was going to delve a little bit more into the support under the current programme, and I'd just like to jump in, really, and start with—. Localgiving found that neither Nest nor Arbed addressed immediate needs, and that actually they praised local projects that combined immediate interventions like fuel vouchers and draught excluders and thick curtains, with ongoing behaviour changes. Do you think that this is a fair assessment—that that was doing more to help people than these two schemes? You're muted at the moment. There we are.

I'm not sure whether the unmuting happens automatically or not, sorry. I can't comment on the comparison between the two schemes, I'm sorry. But what I can say is that if you look at the distribution of people in fuel poverty, a huge proportion of them—well, more than half, or nearly half—live in band D properties, rather than in the Es, Fs and Gs. So, by definition, unless they have a health condition, Nest is not reaching those people. If we also look at the income distribution of people in fuel poverty, a huge 78 per cent of them are in the lowest two income groups. So, whether your energy efficiency measures are the right ones to relieve fuel poverty amongst low-income groups is not clear, because some of those people may not need a new boiler or whatever; they need precisely what you say, in terms of fuel vouchers or draught excluders or shiny foil behind the radiator or whatever. Somehow, I think because of the design of the programme, it's drifted from that, and the emphasis has become on boiler replacement. So, to me, if you were starting to design a programme that was about fuel poverty, you would start by looking at household income, and you would look at where are those people on low incomes and what sort of homes do they live in, and what sort of help would be most effective in reducing their fuel poverty? For us, energy efficiency measures are just one of the package that would be needed.

Thank you. That leads me on nicely, then, to my next question. The Energy Saving Trust is one of those who have said that they don't think that benefit payments should be included and so they should be discounted from income assessments so that more vulnerable households can be supported, and also raise the income threshold to support more people impacted by the energy price rises. Do you think that would help?

I certainly think the eligibility criteria at present are very restrictive. You have to have a very, very low income in order to be eligible and, as you said, it doesn't disregard disability-related benefits, even though those disability-related benefits are supposed to help you cope with the cost of disability; they're not general spending money. So, absolutely, even pre the current energy crisis, I would have said 'yes', and we have said in response to earlier consultations that, absolutely, the income thresholds are far too low, but all the more so now.

Thank you very much. Jonathan, I'm going to come to you if that's okay to ask you the questions I just asked Victoria. So, just to start off, as I said, Localgiving found that neither Nest nor Arbed addressed immediate needs and actually praised local projects that were able to provide immediate interventions like fuel vouchers, draught excluders, thick curtains. So, do you think that's a fair assessment—that those interventions were helping a lot more than Arbed and Nest—and what do you think could be done about that?

Yes. I think the comment was made earlier that Nest has ultimately turned into a boiler replacement scheme. When you look at the 2021 figures, I think that 95 per cent of the work that was installed was boiler related, or heating systems, 5.1 per cent, I think, was insulation measures, and 0.1 per cent of that was draught excluders and draught measures, which is a miniscule amount. So, I think we do need to move away from it becoming a boiler replacement scheme and look at the fabric first. We talked about external wall insulation earlier on, and EWI is a great way to insulate a property, if it's done correctly. The cost sometimes is prohibitive, so I think we need to look at increasing the grant levels to allow a multitude of different measures to be installed. One of the problems we tend to find with Nest is that it's not that it necessarily has to be insulation or heating, but because the grant levels, or the grant caps, don't allow both, because you pass the threshold, then it tends to be one or the other. So, I'd like to see that there would be, perhaps, two streams of funding for Nest, going further—one a heating stream and one an insulation stream—and you can combine the two and look at both so that you can do a proper whole-house approach, which we can't currently do in the way that Nest is being delivered currently.

In terms of the quick wins, yes, I think draught excluding and that type of measure has its place. But, in terms of trying to tackle the large crisis that we're in at the moment, it has to be the bigger measures—the EWIs, the heat pumps—to a degree, but certainly looking at insulation measures and fabric first as the first point of call, rather than automatically going down the boiler replacement route. We're trying to move away from gas boilers, and insulation should be the first step that we look at.

Just to follow on from that—and then I'll come to Victoria on this one—and what you said about boiler replacement, the Bevan Foundation have called an environmentally damaging practice installing new boilers rather than fixing the existing ones and that it should be stopped immediately. Do you agree that it should be stopped for the next round completely?

Yes, I completely agree. One of the things Nest tends to do is replace boilers automatically. One of the things we've asked for and lobbied for in the past is whether there can be a repair pot of money, so we don't automatically take out a boiler that's three or four years old that's not working and replace it. So, we're working on a scheme with Wales & West Utilities at the moment where we have a pot of money that goes into repair boilers. So, if Wales & West Utilities, for example, go to a property where they have to condemn a boiler, rather than automatically taking that boiler out, they look to see whether they can repair it in the first instance, which is obviously a better use of money, it's quicker for the individual, and it's far more environmentally sound. So, replicating a scheme like that for Nest would be a huge step forward and something that should be investigated, absolutely.

Also, then, just because I asked Victoria this as well, do you think that benefit payments should be discounted from income assessments?

Yes, a wealth of benefits, personal independence payments and attendance allowance, shouldn't be included. I don't think they should be classed as an income, because they're for care and additional assistance. So, if we were to remove those, that would allow us to target people who are really vulnerable, and the ones that would be better suited than perhaps the broader scheme that we're facing at the moment.

Victoria, do you want to come in and add anything to that? Okay. Thank you, both. Thank you, Chair.

Sioned Williams.

Thank you, Chair, and good afternoon. We've already touched on this in answers to previous questions, and I'm referring now to the crisis that we're currently facing. We know that far more people will fall into fuel poverty and will face greater need than was the case even during the time that Nest and Arbed have been trying to address these problems. So, I wanted to ask very specifically how any successor scheme could address the direct and immediate need that we're currently facing. Victoria, you mentioned that we're aware that a number of people in fuel poverty aren't necessarily in receipt of means-tested benefits. So, how can we address those people who are in need, and perhaps thinking particularly about rural areas? What are the direct interventions that we can make in the short term? I think, Jonathan, you mentioned fuel pumps. We know that they're very expensive at the moment. So, I'm just thinking about the short and medium term in dealing with the crisis that is hitting us right now.

Would you like me to go first? I think the rural situation is hugely important. They tend to have a higher focus of hard-to-treat properties and they're generally older, they're off gas, with solid walls, and generally the average income levels in rural areas are lower than in urban areas. So, we do need a very co-ordinated approach on how we do this. There isn't a quick win, unfortunately, I don't think. We do need to look at, as I mentioned earlier, the larger-type technologies, whether that be exterior wall insulation or what's most suitable for that property. The problem with a lot of rural properties is that they are quite specific, so they do need an individual survey for that property; there isn't a one-size-fits-all type of process that's going to work for everybody. But, I think a bigger emphasis needs to be put on rural communities, because work does tend to shy away and move to the urban areas because it's cheaper and easier to do. There's more workforce there and a better supply chain. So, I think a co-ordinated approach across local authorities, Nest, Welsh Government, to actually tackle the issues that the rural communities are facing is paramount in terms of trying to achieve something. You mentioned fuel poverty earlier. I don't necessarily think fuel poverty is a good proxy for this any longer. We need to be looking at the type of property. Energy performance certificates have got their place in it. Yes, they're not perfect, but it does give us an idea of what that property is and a direction for what we can do within the property. So, I think a targeted approach within a rural community is vital and needs to be incorporated in any new version of Nest and Arbed going forward.

I don't have a lot to add to what Jonathan has just said, except that we have envisaged a shift to some sort of means-tested approach that isn't all or nothing—so you can get it all if you're on a benefit and nothing if you're £2 over—but some sort of sliding scale that offers a mix of grants and loans depending on your income, which would have the benefit of helping people on middle-level incomes not only to cut their energy costs, but also to reduce their carbon emissions whilst still retaining that free provision, and more expensive provision if that's what it takes for the people on the lowest incomes. You're absolutely right; rural properties, as Jonathan said, are very much less energy efficient. We did a briefing on expenditure on energy, and it is very much higher in rural areas.

I was interested in your paper where you look at what percentage of people's income is spent. I would be interested to know how we should assess need. Clearly, low income is one factor, but you can be on a low income and living in an energy-efficient home. So, I just wanted to ask—particularly now, given the crisis facing us—what you think we should use as the means of identifying those people in need of these interventions and this assistance.

I think that if you're looking at a programme to reduce fuel poverty, you have to look at that balance between household income and household expenditure. Energy efficiency is just one of the factors that contribute to household expenditure. I suspect that this would have to be an individual assessment, but once households start spending more than a certain proportion of their income, they have got nothing left for the other essentials. I can't offer you a suggestion as to what that might be, but that's a very different approach to the all-or-nothing approach that we have at the moment. So, it's something that would need quite a lot more work.

Thank you. On to another question, therefore. Both of you have mentioned difficulties in supporting people who are eligible for support. You have mentioned complex processes, a number of barriers being placed in the way of people, particularly vulnerable people, and people who need more support than is usual or would be expected from Government, perhaps. So, what changes do you think are required within the advice and signposting services provided, which would be provided by Nest or any successor programme, particularly in considering how we support those people who are in financial crisis or people who have complex needs? Jonathan, would you like to go first on that?

Yes, certainly. I think that it comes back to communication. The home owner needs to be informed about where they are in the process of the application, so that weeks and weeks don't drift by without them having any knowledge of whether the application has been successful or turned down, what measures are being installed, when the installation date is, when the survey date is. All of these different steps within the process are falling short.

The home owner at the very start doesn't necessarily know when the next stage is going to be, and that needs to be communicated. Quite frequently, we will help an individual, they will have contacted Nest, and there has been a gap in the information, or the information hasn't reached the right department. It's been lost. As soon as that gap occurs, the application is either turned down, or there is no proactiveness from Nest to contact that home owner, in terms of, first, chasing up the information, and secondly, to make sure that they are able to supply that information.

Thirdly, when they are dealing with people who are off broadband, who haven't got a mobile phone, and who are unable to take photos of their room being cleared, for example, there needs to be more assistance and more hand holding through the process for those individuals. We are talking about some of the most vulnerable people in the community. They do need assistance. Whether that comes from a third party helping them, like ourselves, or whether Nest can step up and do a bit more of the hand holding themselves, that's up for debate.

But, something needs to be done to make sure that those people don't slip by the wayside, and they are helped through the process, and they don't get pushed back at each step of the process, which is currently happening at the moment. There needs to be a more concise and smoother flow of information between Nest and the home owner, and a bit more of a proactive service, like I mentioned previously.

Okay. Victoria, if you want to come in briefly, and then I think that we need to move on.

Thank you very much. I just wanted to add that this is, of course, one of many, many different schemes that someone on a low income needs to apply for, and give the same information all over again—proving their income, proving their address, et cetera, et cetera. The number of times that someone has to do that, and the number of different agencies that people have to deal with, and the number of slightly different requirements that they are coping with, is yet another reason why we think that it should all be streamlined into, if not a single system, then certainly to enable more passporting through, so that if somebody applied, say, for a council tax reduction scheme and is eligible and they live in a particular type of property, then they can be automatically referred, if they want to, with an opt-out rather than an opt-in, into getting help with their energy efficiency and fuel costs.

Diolch yn fawr. Diolch, Gadeirydd.

Can I just add one thing? I think the timescales and the milestones in terms of how the process works need to be shortened considerably. We've had numerous examples of people that have gone through the application for the scheme and the process, they've done all the different steps, so they've cleared their room and they're waiting for a survey date or an installation date, then that date then turns out to be two months down the road. So, that home owner then has got a room—. They're generally living in small properties, they've cleared the room and they need to leave that room empty for a further six to eight weeks. That's not acceptable on anybody's scale, let alone the people who we're trying to help through the process. So, that's a major issue that we find time and time again, and that again needs to be addressed. There need to be milestones and clear timescales where the home owner knows what the next step will be and when they're expecting to hear from Nest and the installers for when that final installation will be delivered.

Thank you, Jonathan. You've given us some excellent examples in your written evidence and we'll obviously follow this up. I'd like to move on now to discuss whether an area-based approach is what we need in future. Jane Dodds.

Diolch yn fawr iawn, Gadeirydd, and good afternoon, Victoria and Jonathan. As Jenny says, I'd like to focus on the future of this. We've had the Arbed scheme and we're looking at, hopefully, the next iteration of that. So, could I ask you a couple of questions about that, please? What do you think that programme should look like? Should it be area based? Should it be about engaging with local authorities? Do you think there are other partners that we should be including in that as well? Thank you. Maybe Jonathan first.

As I said, I think an area-based scheme works when it's done correctly. It needs to be aligned alongside the demand-led schemes, so Nest and Arbed working collaboratively together, in parallel. But I think what we need to also do is make sure that we draw in and lever in additional funding from other areas, whether that be the energy company obligation, Welsh Government, local authorities, so everybody is working collaboratively together rather than independently, or trying to do the same thing but at slightly different times, not knowing what the the other organisation is doing. It could be straightforward. It's not a complex thing to go into a property and install the measures. But when we've got so many different arms doing different things, the information gets lost or doesn't quite co-ordinate properly. So, yes, an area-based scheme needs to be continued alongside the demand-led scheme as well, but we need to make sure that we're communicating properly with—. You ask what other organisations should be involved; local authorities are key, registered social landlords are absolutely key as well, but they all need to work collaboratively together on the project.

We definitely see a role for area-based programmes and involvement of local authorities. I think it can create momentum, I think it can create confidence in the community that this is okay and it's a good thing to do and they can go and see what Mrs Jones's house is like and that it was okay for her. I think if you tie that in with not just other local energy initiatives, but with local community groups, with perhaps local area renewal schemes, then I think there's a win-win all around, and definitely local authorities and local community groups need to be involved in that.

Thank you. Jonathan, I know you've got your hand up, but I'd like to come back with a little spikier question, if that's all right. Does it not depend on the capacity of the local authority to engage? I'll give you an example. Powys, my own local authority, in year 2, had no homes that were part of the Arbed scheme, and I'm sure there are others in other years. So, just if you can get your head around that—the capacity of the local authority, their commitment, et cetera. Is that something that needs to be wrestled with if there's a future iteration? Thank you. That's the end of my spiky questions.

My understanding is that the Arbed areas were designated through looking at small area energy efficiency figures, which were based on the rating at the time of house sale, and therefore had some element, to a greater or lesser degree, of historical data in there. I think I would hope that most local authorities would be able to rise to the challenge. There would be questions, or there should be questions from the electorate if they didn't. So, I live in hope, really.

Thank you. And I think, Jonathan, you had something to add also, so if you could just very briefly answer that. Thank you.

On the previous question, it was just backing up what Victoria said in terms of community buy-in being vital for schemes like this. And word of mouth does work, and schemes are successful when they get the buy-in of the community.

Leading on to the point regarding local authorities, again I echo what Victoria said. It's got to be the responsibility of local authorities to find the capacity and the resource to deliver these schemes. If we're talking about millions of pounds-worth of investment and money being levered into a local authority, it's their role to find the capacity and the resource to engage with the organisations, the contractors and the parties delivering the work, to make sure that the work and the investment come into their area rather than their neighbour's local authority. So, it's on their shoulders, unfortunately.

Powys is a good example. We're managing the energy company obligation for Powys at the moment, and capacity is an issue there. But working with third sector organisations on the ground, there is the route in to being able to engage with these projects, and it doesn't have to come on the shoulders of the local authorities. They can work in partnership with other people, and they do need to back the scheme so that the communities have the confidence in the scheme to make sure it's a legitimate proposal and the work is going to be done to high workmanship.

Okay. Thank you very much. Diolch yn fawr iawn, Cadeirydd. Thank you, Chair.

I think it makes sense if we now come to Tom Giffard who had some questions about rural fuel poverty, and then I'll come back to urban situations. Tom.

Yes, thanks, Chair. I know you spoke a little bit in answer to Sioned Williams earlier about rural poverty, so I wouldn't want you to repeat anything you've already said. But I am curious to what extent you feel the current programmes that are out there reflect the need of rural households that are fuel poor, and whether there's any additional, specific support that you think should be made available to meet those challenges.

I think the hardest thing in terms of delivering work in the rural community is, one, supply chain, which I briefly mentioned earlier, and having to bring in resource from outside the area, which doesn't always fit well with the local authorities where we're working. And, secondly, the identification of the properties in the first instance. Further work needs to be done, whether it be mapping or actually finding the properties that need the greatest amount of work, and then working with those home owners to try and source the funding that can be levered in to actually install the work. So, it's trying to identify the people that need the assistance, because, unlike an urban area, they are more scattered around. The local authorities don't necessarily know the stock levels and the people that need assistance in their areas. So, again, it's engaging with third sector organisations that are on the ground, that do this day in, day out, and have the links and the leads and can identify where the work needs to be done.

Tom, did you—?

Yes, just on that, you spoke a little bit earlier when we talked about rural fuel poverty about how expensive that can be sometimes, because houses are quite often inefficient and sometimes off grid. So, can you just give me an understanding of how much more expensive an undertaking like that would be in a rural area?

I can't give you an exact figure because it varies on the size of the house; there are so many variables in there. But, statistically, rural properties, generally, are older. They are older housing stock. They're hard to treat because they've got a stone wall, and they're off gas. So, all that combination of factors leads to far more expensive fuel bills for that home owner. And, like I mentioned earlier, again, the average income for rural communities is lower. So, you've got more expensive properties to try and heat on a lower income, which obviously leads to more likelihood of fuel poverty within those communities.

Thanks, Chair.

Okay. Thank you. I just want to come back to what is mainly an urban situation, which is the—. You say, Victoria, in your paper that there's little correlation between a home's energy performance rating and the market rent, according to the research you did last summer. It would be interesting to know whether that has changed at all. But if we then either encourage or oblige the market to improve their energy efficiency, can you tell us how we might be able to do that without once again pushing the poorest citizens into the worst heated homes?

Well, that, Chair, is the challenge. Interventions in rents can have all kinds of unforeseen consequences. The obvious way to begin to address fuel poverty and poor energy efficiency in the private rented sector, to me, is through standards. There is a very high proportion of the private rented stock that has a heat and cold hazard—I can't remember the figure off the top of my head, apologies, but it is quite significant. And I think, to require landlords not to let properties that are impossible to heat at great cost, and/or are damp, is probably the way forward, and then you deal with the rent consequences from that. I think if you tinker with rents, unless you're very confident of how the market's operating, there can be unforeseen consequences. So, I would prefer to see intervention around standards rather than around rents.

Okay, thank you for that. Jonathan, is there anything you can add to this, in terms of how we get private landlords to step up to the plate? We clearly can't provide people who are owner-occupiers—. If they want to go on living in a leaky home, that's their choice, I suppose.

Yes, the private rented sector is probably the one that gets left behind, because it's the hardest to work alongside. You have the minimum energy efficiency standard, which has been introduced, in terms of making sure that a property is up to a certain band on an EPC. But the engagement or the catalyst to improve stock from a landlord's perspective has to either be through grants or loans and legislation, to make sure that that property is up to a certain band before it can be rented out. It needs to be a sort of carrot-and-stick approach, I think, on this one, and it's got to be at, I think, a standard, but grant and assistance to help them progress and improve the energy efficiency of the property.

Okay. This is an important area. I think Sarah Murphy wanted to pursue this matter.

Yes. So, just looking at how a successor scheme could help advance equality and social justice, which you have touched on a lot throughout your answers, but just again to dig down into them a little bit—Jonathan, I just wanted to ask you how to address the admin and practical barriers to ensure entry and equal access. And you said about the breakdown in communication as well—how can that be addressed?

It's a million-dollar question, I suppose, isn't it? It's the delivery of the scheme. The scheme's got to be designed so that the home owner is put at the forefront of the decision making, as opposed to the scheme being, ultimately, a way or a means for the scheme delivery agent to offload boilers into the properties, which, essentially, is what it is at the moment. The home owner needs to be at the front of all decision making, which they're not at the moment. So, the scheme needs an overhaul, to make sure that the delivery mechanism is done, with milestones like I mentioned, so that the home owner knows where they are throughout the whole process, without getting lost in the system, information going missing, and then, ultimately, the application failing. So, whether that's closer engagement with organisations on the ground, or closer engagement with the RSL, or whoever the individual may be, but, at the moment, there are too many gaps in the process, and people are getting lost at the moment, and that needs to be addressed and secured.

And also you mentioned earlier on about people having to clear out the rooms and then having to leave them empty for a really long time with these kinds of things. But also, do you think the cost of enabling the works, then, should be factored into the next programme, to help with the financial barriers to entry?

One of the big issues that we do get is, again, I think you're right, there are cost implications for multiple stages of the process. So, take, for example, they have the work done, and they need to redecorate. Some people will be put off, because they don't want to do the redecoration at the end of it because there is going to be a cost incurred, and they haven't got the money to do it. So, there are multiple stages where costs can be incurred through the process that should be tailored in and brought to the attention of the applicant, but also a means of them assessing or accessing money to pay for that. And, again, we will receive a smaller drop-off in claims and applications disappearing if there is that process, and that sort of mitigation against the further cost implications further down the road.

Thank you very much. Victoria, was there anything you wanted to add on that? And also just, I suppose, a wider question as well, like how do you think, in the next scheme, the—[Inaudible.]—equality and social justice better?

I can't design a whole new scheme, but I think what we can see is that by not covering all tenures and all circumstances in the same way, there are inequalities that result from that. For example, we know that black, Asian, minority ethnic groups are more likely to live in private rented housing than white groups, and that is, from memory, one of the most common tenures for that group. So, if this programme isn't reaching private rented accommodation, then it's not serving the needs of those particular groups. That's the most obvious one, but I think you can probably apply that in other ways. Equally, we know that older people very often live in owner-occupied homes, and you could say that arguably this programme has helped to meet their needs. So, as always, it's not a simple and black and white thing. And I think we have an approach at the moment in which it's as if it's the building that's the driver, whereas I think what should be the driver should be the people and their circumstances and what they need, and that the fabric of the building becomes part of the solution, not the object. I'm not sure if I've explained that very well, because we're not designing a whole new programme, but it seems that something has gone back to front with it all. I think Jonathan has hinted at that too by saying the person isn't at the forefront of what's being delivered.

Absolutely, and it kind of very much goes back to what you said at the beginning about the conception of this. Things have got a little bit muddled about what the focus of that was. Thank you very much. Thank you, Chair.

Okay. I just wanted to pick up one point that Jonathan made, which is that you're ineligible for Nest if you have a business registered at the address where you live. The obvious case of that would be a farmer; whether they're a tenant or they own it, their business is where they live. So, that means no farmers can get Nest. Is that right?

You can't have a business to the address, so if they've got that business address—. Ultimately, yes, that would be correct.

Most farmers live on the job, don't they? I mean, there are some who don't—a few—but the vast majority live on the farm, because they want to keep an eye on it, so that means none of them would be eligible if they lived on their business property.

That goes back to Tom Giffard's point earlier in terms of another rural situation, that the rural community tend to have more home addresses with their business joined. So, there is a rural issue as well as—. Yes, that's my point.

Victoria, did you want to add something?

Given that self-employment is already—or was, pre COVID—very significant in Wales, and very significant indeed in rural areas, at up to 15 or 20 per cent of employment, that is knocking out a considerable number of people from the scheme, and we also know that people who are self-employed tend to have lower than average incomes.

Okay, thank you. I now want to bring in Ken Skates. You've got some concerns for the next programme.

Yes, thanks, Chair. Some of the question has been answered to a degree. In brief, though, if we could get an assessment of whether a single programme is at all possible—a single programme that tackles both fuel poverty and decarbonisation simultaneously, or whether you believe that there should be separate, albeit complementary, programmes implemented, and including, perhaps, if you just want to touch—I know it's not strictly speaking part of this discussion, but whether a programme needs to be put in place for businesses as well in terms of decarbonisation and business liability.

I'll pick up the business one first. In terms of businesses, one of the things we thought, or suggested, is that you have a higher grant cap in terms of allowing people—. Or the assessment for that business, you assess or gauge what the turnover of that business is, so that small, independent one-man bands with a very low income, a very low turnover, would be eligible for Nest. If you've got a larger business with a higher income, obviously, you're ruled out. So, I think it needs to be an assessment on the business and the scale of that business within that home to see whether they would be eligible to participate in the scheme. That's a simple solution.

Can I just come in on that just briefly, then, Jonathan? Sorry, just for absolute clarity there. How would that play alongside the economy futures fund, which is operated by a different department from Government, which focuses investment in those businesses that have a sustainable future? Would you have complementary schemes, then, for the larger businesses and the smaller ones, but they would operate separately?

I don't know the answer to that one. Yes, you need—

Okay.

—a joined-up approach. Maybe both departments need to speak and come to some sort of sensible answer of how they can work in parallel with one another.

Okay. Thank you.

In terms of decarbonisation and fuel poverty, they don't always have to work against one another, but there just needs to be a co-ordinated approach in terms of how we can reduce fuel poverty, but look at the carbon agenda at the same time. The improvement of the housing stock with a co-ordinated and sensible approach to improving the life of that person in the home needs to be central to what we do, and it's not beyond the realms of—. It's a tricky one, I agree, Ken, and there isn't an answer that I can give you today in terms of how we do that, but they do need to work in parallel together. We need to improve the housing stock, but, equally, we need to help the individual in that property. And I'm sure there will be an easy or a relatively easy answer to that, but I don't know it today, unfortunately, for you.

No problem. Thanks, Jonathan. Victoria.

Thank you. We said in our evidence that we thought there was a case for two separate but related programmes, and I think that's because they both have different drivers. There is, I think, an arguable case for dramatically stepping up the action to decarbonise our homes, and that needs to be done quickly and it needs to be done at scale. And that means offering assistance to people who have medium to high incomes as well, which is why we suggested that could be done on a sliding scale. There could be economic benefits from that; Wales TUC have estimated significant job-creation potential and business opportunities from that, and that needs to be done—to some extent, it's to be done to decarbonise. There are still people who, no matter what kind of property they live in, will struggle to afford their fuel bills. There are people in relatively energy-efficient homes—nearly half of people who are in fuel poverty live in a band D home and it may well be that their properties can't be upgraded. And so, for them, the solutions need to be different. It might be around insulation measures; it might be around actual help with their costs.

So, the point of overlap, which is where I start getting twitchy, because you think, 'Oh, this would be really messy in delivery terms', is when the answer to someone's circumstances in fuel poverty is around energy efficiency measures, but I think, fundamentally, they've got different drivers, different focuses, and different need for scale as well. That's not to say you don't need to recognise you are messing with people's homes when you're doing a decarbonisation programme, and the kinds of things that Jonathan's described should not be acceptable in that, any more than in a fuel poverty programme.

What about one programme with two separate strands? Part of the problem with having different programmes is you have different administration systems that lead to—well, the—[Inaudible.]—effect where you have a huge proportion of funding just taken up with admin.

It could be. It could be two strands, so long as—. And that, in theory, would help them to work together. I think the messaging might be more difficult. I think energy efficiency has a powerful pull. I think you would need to be clear that, for the fuel poverty wing, if you like, or strand, there would need to be other tools in the tool box.

Okay. Great. Thanks. I'm just going to ask now about skills as well, and the skill set amongst the workers of Wales. Do we have sufficient numbers of people skilled in the required areas to meet our decarbonisation and energy, insulation and fuel poverty objectives? If not, how are we going to do it?

The short answer is 'no', we don't, by any means. As I mentioned earlier, we are delivering or managing an ECO scheme for a number of the local authorities around Wales. What we want to try and do is use the local supply chain wherever we can for those final installations of Welsh organisations. Unfortunately, at the moment, we tend to find that we can't get the work done on a reasonable timescale, so we're finding ourselves having companies from Shropshire, Newcastle, Burnley coming into Wales to do the work because we can't get a local installer to do it, because (1) they're not skilled enough, or (2) they haven't got a large enough capacity to deliver the work that they've got currently. So, we need to invest in workforce; we need to skill more people up so that we can do it on our own doorsteps and not, unfortunately, have outside organisations coming into Wales and delivering the work that the local supply chain should be doing here. So, the short answer is 'no', we haven't got the capacity to do it.

Thanks. I think that pretty much answers it. Victoria, is there anything you'd like to add to that? No. Okay. Thanks, Chair.

Thank you. Just finally, Victoria, surely the fuel poverty focus needs to be coming from the single advice fund deliverers. Because they're having to look at the benefits checks and all these other related matters, they tend to be dealing with the more vulnerable citizens, who, I agree, may not be living in a leaky home, but they maybe have additional health needs that don't enable them to move around.

I can't comment on whether or not people are getting the help through that route. I just hesitate when people are already being suggested that they have to go to lots of different places.

Okay. Fine. That's great. Thank you very much. Thank you very much, both of you, for your contributions. We will send you both a transcript of what you have said so that you can amend anything that has been misheard or misinterpreted. Thank you very much indeed. Thank you very much for your focus on this really important matter.

Thank you.

Thank you very much.

Thank you. Diolch yn fawr iawn.

Diolch yn fawr iawn. So, can we take an 11-minute break and come back just before 2.45 p.m. so that we can get cracking at 2.45 p.m. on the dot? Very good. Meanwhile, if the clerks can deal with making sure that the—.