Student households have always struggled with energy costs.
The government’s own data shows us that 40 per cent of households where the “household reference person” (basically the one that pays the bills) is in full-time education were experiencing fuel poverty in 2020 – with income after housing and energy costs an average of around £250 below the state definition of household poverty.
The reasons are likely to be linked to low student incomes and the poor state of property rented to students in terms of energy efficiency – both of which are longstanding issues that should have been addressed a long time before the price and supply issues causing current concerns hit.
Pictures of LILEE
How do we know if a household is living with fuel poverty? The government definition here is based on two metrics – income and energy efficiency. A household scoring low on both (low income, low energy efficiency – LILEE) is judged to be in fuel poverty.
More precisely, If a household lives in a property that has an energy efficiency rating of band D or below, and would be below the UK household poverty line if they spent their modelled energy costs on energy, it is judged to be in fuel poverty. There are two calculated metrics based on this:
- The number of households in a group or area that are LILEE
- The depth of fuel poverty – the (£) difference between household income minus energy costs and the official definition of household poverty.
And there are three measures that contribute to the calculation of these measures:
- Household income (after housing costs)
- Household energy efficiency rating (measured on a banded scale from G to A, with A the most efficient)
- Fuel costs
For any given household a decrease in income, a decrease in the energy efficiency rating, or an increase in fuel costs would make LILEE (and thus fuel poverty) more likely.
Most government policy interventions in this area have been focused on improving the energy efficiency ratings of property. The current rise in fuel prices means that the focus has necessarily shifted – although a more efficient home is cheaper to run, these savings accrue over time. No amount of loft insulation is going to mitigate the impact of consumer energy prices increasing as sharply as they have.
I can’t explain
So the new Prime Minister will be faced with two choices to combat a sudden increase in fuel poverty – address fuel costs directly or address low income. Both present issues, particularly for student households.
As Jim has already been over on the site, the calculation of household income used in the general government poverty measure is not fair to student households, as it includes fee loans as discretionary income.
The LILEE calculation is a bit smarter – it does include income from student maintenance loans and parental income (and this is imputed if no income is given in a fully student household). So we are seeing here a closer representation of the likely financial status of student households than is used in more general Treasury calculations.
It is not exact – we’re not looking at the actual reported income of individual households as this is all calculated based on a survey sample. And for this reason although we know a full-time student is likely to be particularly adversely affected by a rise in fuel costs, we don’t know which students or what the other risk factors are. And as funds are unlikely to be available to support everyone – we do need to be able to prioritise whatever repurposed access funds are available to universities.
The first way we can focus in is to look at the type of accommodation students are living in. Though we don’t get any multivariate regression analysis – as OfS may be able to provide should it ever decide to leverage the access to administrative data it has into actually helping students – we can make a handful of assumptions.
- Those living in the private rented sector are more likely to experience fuel poverty
- Those living in properties with solid, uninsulated, walls (usually built around or before the turn of the century) are likely to experience fuel poverty
- Those in pre-1919 properties are more likely to experience fuel poverty
- Those in end terrace dwellings and those in flats converted from older buildings are more likely to experience fuel poverty
- Those who use electricity as a main source of heating are more likely to experience fuel poverty.
Though there will be income factors linked to all of these, I am painfully aware I’ve just described nearly every shared student house I ever lived in in the 1990s. As we know from HESA data things have changed since then – with a greater emphasis on purpose-built student accommodation (PBSA).
PBSAs do have advantages for the year ahead. They are usually either recently built or recently converted, meaning that they will be very energy efficient. And fees tend to be all inclusive – set in advance and paid in instalments for the year. The problems here will be faced by accommodation providers – we’re already seeing a shortage of student accommodation in some cities after years of gluts, and this is likely to get worse.
Private sector rented accommodation is still the dominant player for students who are not first years. Here’s how that plays out by provider:
But we also have data at Lower Level Super Output Area (LSOA) resolution – which frankly gives me flashbacks to summer 2020 and another clear oncoming problem for students that was not sufficiently mitigated against.
As “student areas” full of medium-to-low-quality private rented accommodation (older terraced properties, poorly insulated, poor existing heating) that fits the classic pattern described above, we can spot places where students tend to live that fit that profile and react with no surprise at all that this is where fuel poverty tends to exist anyway.
Let’s talk about Selly Oak in Birmingham – home to several generations of University of Birmingham students and an LSOA where more than 60 per cent of households experienced fuel poverty in 2020. Have a stroll around the key areas on Google Maps student view and you could be in Studentsville, Anywhere. That’s the pattern you are looking for – accommodation fitting all of our risk factors above, in large numbers.
Look up the part of the country you lived in similar housing as a student. Chances are fuel poverty rates are high. Students live in some of the worst maintained housing stock in the country – you’ll find yourself telling the areas with PBSA concentrations apart from the areas with private rented accommodation in the traditional (Victorian/Edwardian terrace) mould just by looking at the data points.
Won’t get fooled again?
Student expectations of rented accommodation have risen in recent years, and many private landlords have raised standards (and rents) to match. Universities have encouraged this with checkmarks and approval lists. But the very students who struggle the most are the most likely to be tempted away from this safe space for cheaper accommodation that is missing not just bells and whistles but some of the basics of safety and comfort.
It’s another thing that tracks back to student backgrounds – if your parents can spring for a nice room in a PBSA block or a good quality shared house then the rise in fuel costs will have less of an impact (and it is likely there will be some recourse to similar support where bills rise). If you are scraping together rent for a dilapidated end-terrace by working all the hours you aren’t studying there is not currently a safety net.
This difference shouldn’t exist because student maintenance provision should cover the non-fee cost of studying and living. The difference shouldn’t exist because we should think about accommodation alongside student number expansion. The difference shouldn’t exist because widening participation means far more than raising school attainment.
If we do get central government support on this issue, it will be – at best – a fig leaf. Something to alleviate a small number of the most viscerally unfair situations. Longer term, we need to get a proper grip on the student accommodation sector – which means specific, targeted, regulation.