OAP fuel payments 'unsustainable'

The Government's £2.7 billion-a-year budget for winter fuel payments might be better spent on lagging, insulating, reglazing and modernising the homes of pensioners who cannot afford to heat them properly, suggested the local government spending watchdog.

The Audit Commission said only 12% of people receiving the payments - worth up to £400 a year - are classed as being in fuel poverty.

And it said that the payments do nothing to encourage energy efficiency and reduce the CO2 emissions blamed for global warming.

Audit Commission chairman Michael O'Higgins said: "A one-off improvement in energy efficiency would cut household bills, giving householders lasting independence. Good for the planet and for their pockets. Surely this would be much better than pensioners needing continual government support to keep draughty houses warm every winter."

In a report entitled Lofty Ambitions, the Audit Commission said that improvements in domestic energy efficiency can play a big part in meeting the government's legally-binding target of 80% cuts in greenhouse gas emissions by 2050.

Homes account for a third of Britain's carbon emissions, which could be cut more quickly and cheaply than those from industry or transport, said the report.

Cutting the power consumed by homes by one-third would cost around £50 billion, but the money would be repaid through cheaper fuel bills within eight years. The measures would improve the health and comfort of the 4 million people who cannot currently afford to heat their homes properly - half of whom are pensioners.

"Expenditure on winter fuel payments, as well as being poorly targeted, does not provide a sustainable solution to the problem it seeks to address, said the report.

"Winter fuel payments increase incomes but do not reduce energy consumption or bills. It would be more sustainable to improve energy efficiency in fuel-poor households, reducing energy bills and CO2 emissions."