Warm Front

– in the House of Commons at 10:50 pm on 3rd March 2008.

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Watts.]

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I am a home improvement surveyor with a local authority. I have been...

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Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government 10:51 pm, 3rd March 2008

May I begin this debate by making it clear that the idea behind Warm Front is excellent, and that I have tried over a long period to get acceptable answers to the questions raised by my investigations so that I would not need to raise the matter in the House?

Warm Front has the laudable objective of ensuring warm houses for the most in-need citizens of our country, backed by £2,700 of funding per household from this Labour Government, but something has gone very wrong. Over the course of the past year, the trickle of complaints coming to my desk has turned into a flood of complaints. People came forward with case after case where they were asked to contribute between £200 and almost £1,000 on top of the generous Government grants to have work done.

Initially, I thought that my constituents were getting a complete heating system for the money. After all, I can go out in Stoke-on-Trent and engage a CORGI-registered plumber to fit a combi boiler and half a dozen radiators for about £3,000. But no, they were getting a boiler and, generally, just one radiator. I thought that perhaps the boiler concerned was a top-of-the-range combi boiler, but again, despite official correspondence telling me that the best materials are used, I found that the boilers in question are not those instant-hot-water types, but a bog-standard, heat-a-tank-of-water sort, and certainly not a high-specification one. Indeed, having finally got the breakdown of material and labour costs, I found that the cost of the materials was not that great—quite reasonable, in fact.

I inquired, and was told that the workmanship was of the highest quality, and that extra work, such as the removal of any back boiler, must be done as part of the scheme. But that, too, was shown to be incorrect. It seems that the charge is £2,700 plus, whether back boilers are removed or not. The work is not consistently of the highest quality and, when the costs are looked at in detail, it seems that the contractors are charging about £1,000 for labour each day. I know that plumbers demand a high price—much higher than MPs—but £1,000 a day just for fitting? When I asked, I was told that the work was guaranteed, that there is a rigorous inspection regime and that if there were any problems, the work would be put right. Forgive me, but if I engage a local plumber and the work is not good enough, I expect them to come back and put it right, and I do not expect to pay extra to have that guarantee.

Now might be a good moment to illustrate my point with an example. Mr. Degg, one of my constituents, contacted me, like so many others, about the work he had done. For the princely sum of £2,914.73, he did not have a combi boiler and six radiators fitted, which a local firm gave me a quote for, but a bog-standard condensing boiler and one radiator. The fitter turned up, saw how little work there was to do, ate his breakfast and disappeared for the morning, returning at lunch time. Mr. Degg knows a thing or two about plumbing and asked about the power flush that accounts for up to £500 of the costs of the job. The fitter laughed and said that it was not necessary. When the boiler and all the bits were fitted, my constituent complained about the poor brick work, where the flue went through the wall. That was not done satisfactorily and, in the end, Mr. Degg had to rebrick it himself. When the inspector came to examine the work—as I was told in official correspondence, the highest inspection regime pertains—and was told about the power flush and all the other problems, he said that all he could do was send an e-mail. There is not much value in that costly benefit. Sadly, Mr. Degg's experience is not a one-off.

J

I cannot understand why normal practice of sending the paying authority an invoice with items broken down in detail, the same as if you had work done at a garage.
Surely the question of labour charges etc would be dealt with by an auditor and challanged in a simple procedure. It is our money after all.
JG

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Photo of Kevan Jones Kevan Jones Labour, North Durham

I congratulate my hon. Friend on securing this debate. A constituent returned to my surgery on Saturday. She said that she had her boiler replaced and valves put on the existing system for more than £2,000. She is a pensioner and she got quotes from different companies. The highest quote was £1,500 from a local firm. Does my hon. Friend agree that many people are not asking questions, but those who are, including Mrs. Young and others in my constituency, are dissatisfied not only with the work but the fact that Eaga might be ripping off the Government?

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

My hon. Friend is right. Rip-off is the only phrase that I can think of in the circumstances.

Photo of Rosie Cooper Rosie Cooper PPS (Mr Ben Bradshaw, Minister of State), Department of Health

My hon. Friend got there before me. Only last week, I told Eaga that I would seek an Adjournment debate because people are being ripped off. The pensioners whom we are supposed to help are losing money because of the money that they have to contribute on top of the Government grant. It is disgraceful that they are being treated in that way. Moreover, the Government are saying that, from April, they will allow people to choose the hospital to which they go and which saves their lives, yet under the operation of the scheme that we are considering, people cannot choose at a sensible price the man who arrives with the spanner. It is outrageous.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

I could not put the point better myself. It is outrageous. I have heard many such experiences. Colleagues who cannot be in the Chamber have also given examples. An hon. Member told me about a constituent who lives in a bungalow but was charged for scaffolding.

Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

I am grateful to the hon. Gentleman for holding the debate. I do not know whether he realises that I have been pursuing the matter for some time, in public, on the radio and so on. I have had dozens of e-mails, from not only my constituents but many other people, who suffer from another complaint: long delays of up to six months after they have paid their deposit. In one case in my constituency, a local plumber had to come to the rescue and provide the installation because the person concerned would have been cold over Christmas.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

I am grateful for the right hon. Gentleman's intervention. I am also aware of the voucher scheme, under which people who do not qualify for the grant get a voucher. I understand that £50 from the £300 voucher is deducted for administration costs. If enough money was not already being generated for certain people out of the scheme, it appears that they are considering other ways in which to extract some cash.

I have spoken to a contractor, who did not want to be named, who said that it was routine not to bother doing the power flushes. Mr. Degg is not the only person by a long way to experience problems with the workmanship and rip-off costs. In my constituency, Mrs. JB from Meir had a boiler and one radiator fitted. She had to pay £535.61 on top of the £2,700 Government grant to cover the £2,303 labour costs. Mrs. AC, also from the Meir, had a bog-standard boiler, one radiator and a new heating tank installed. She had to pay £614.70 of her own money on top of the Government grant to cover labour costs of £2,538.65.

Lightwood residents Mr. and Mrs. H had a bog-standard boiler fitted and paid £253.40 of their own money on top of the Government grant to cover labour costs of £2,302. There appears to be something magical about the figure of £2,300 or thereabouts. Hanford resident Mrs. BW had to find a staggering £1,266.88 personal contribution because she had already had cavity wall and loft insulation the previous year, and the labour costs for replacing an old boiler and a pump were £2,356, not including the parts themselves. I have case after case after case.

You may be wondering why you have not heard of hundreds of other cases in the House, Mr. Deputy Speaker. The reason is simply that the problem is being hidden in many parts of the country, with local authorities or charities meeting the extra costs of the scheme. Not only are many of my constituents being ripped off, but in other parts of the country local rate payers and charities are being ripped off, too.

What can be the reason for such high labour charges? The answer from Eaga is, "We can't tell you how much each bit of work costs for reasons of commercial sensitivity." That poor excuse means that we can do only one thing, and that is speculate. So let us speculate. As I have pointed out, the reason for the high labour charges is not that the whole house is being fitted with radiators or that the workmanship is of such high quality that the jobs are painstakingly done. Indeed, the July 2007 quality assurance assessor's report from the Department for Environment, Food and Rural Affairs quotes a figure of £23 an hour, which would mean 100 hours of work to fit a boiler and a radiator. That would be painstaking work indeed.

The reason for high labour charges is not the costs of guaranteeing work, either, so perhaps it is that a cut is being taken at each level, from Eaga to contractor, sub-contractor and sub-sub-contractor. Perhaps the reason is that the work is Government contract work and therefore easy pickings for businesses on the approved list. Perhaps the reason is that at least one of firms doing the work is owned by Eaga, which operates the Warm Front scheme. Indeed, it would be interesting to know how many of the firms are owned by Eaga.

I hope the reason for the high costs is not that people in one part of the country are subsidising folk in another. Put simply, I do not know why the labour charges are so high, because the information is "commercially sensitive", but I hope that my hon. Friend the Minister can find out. Can he also find out why inspectors are pretty much powerless; why it takes two days to put in one boiler and a radiator; why power flushes have routinely not been done; why poor quality work has been allowed; why firms owned by the Warm Front administrator are allowed to do the work; and why it costs £2,000 or more, excluding the equipment, to install a bog-standard boiler and one or two radiators when a local CORGI-registered plumber would charge that for fitting a combi boiler and six radiators?

I know that my hon. Friend the Minister will give great care and attention to answering those points. However, I should like him also to dwell on the other important question that arises from what would otherwise be an excellent Government-funded scheme: how many of the most in-need citizens have not had their heating improved because they simply cannot afford to top up the grant?

Photo of Joan Walley Joan Walley Labour, Stoke-on-Trent North

Does my hon. Friend agree that many vulnerable people have benefited from the scheme? Does he agree also that the important thing is to have detailed talks with the Minister at DEFRA, so that we understand exactly where the costs of all the contracts are, but at the same time ensure that there is enough money, a high enough ceiling and sufficient criteria, so that previous work to install insulation is not deducted from the overall cost, but time-spent? We need to ensure that we deal with the issues of fuel poverty and energy efficiency. We also need to ensure that we have local contractors, so that the scheme creates a win-win situation for all those who benefit now and all who have done so in the past, because we do not want people who would otherwise benefit to be deterred from taking advantage of such a wonderful Government scheme.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

I am grateful to my hon. Friend for, as ever, making an extremely good intervention. It is important that Warm Front should be a good scheme. Equally, the danger with what, in the case after case that I have encountered, can be described only as a rip-off is that it will deter people from having the work done, and it must not, because it is important that the work should be done.

I agree with my hon. Friend's point about time limiting. There should be a cut-off point for anyone who has had cavity wall or loft insulation done, so that it no longer counts against the budget in future. However, I am concerned that if DEFRA simply increases the grant funding, that will continue to add to the profits instead of addressing the underlying problem. I would rather not have secured this debate, if only I had received some sensible and proper answers from Eaga, rather than its "commercial sensitivity" avoidance.

Photo of Rosie Cooper Rosie Cooper PPS (Mr Ben Bradshaw, Minister of State), Department of Health

I totally agree with the points that my hon. Friend is making. It is important that there should be accountability all the way through the system, from the cost to how we treat people. People need the scheme; therefore we must deliver it for them. However, it is a disgrace that for many, many months MPs have not been able to get answers out of Eaga, because only one person there has been dealing with MPs' inquiries. If that is not saying, "We don't care about being accountable", I do not know what is.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

I am grateful to my hon. Friend for that intervention. It would almost not matter whether Eaga had one person or 100 people. The problem is that the answers are simply not forthcoming. I have not been given the information, but suspect that that is because those answers cannot be forthcoming. I cannot see any way of justifying £2,300—which seems to be the ball-park figure—for installing one boiler and one radiator. That boiler is just a bog-standard boiler, not an all-singing, all-dancing one, and the service is not a fantastic service that could not possibly be had from anyone else.

I have gone through all those points in my speech, and I hope that my hon. Friend the Minister will ensure that answers are sought.

Photo of Kevan Jones Kevan Jones Labour, North Durham

Answers need to be given to the points that my hon. Friend has raised. Does he also agree that Eaga's structure ought to be investigated? I remember it when it was a small organisation in Newcastle many years ago, but, as I understand it, some of the senior directors have now made an awful lot of money—through share ownership or in other ways—as a result of their employment by Eaga.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

My hon. Friend makes an important point. I think that a root and branch investigation is required.

The quality assessor's report document dated July 2007—which was based on the Warm Front scheme's central heating installation costs and charges appraisal—has miraculously, and quite coincidentally, appeared in many right hon. and hon. Members' e-mail inboxes today. It seems to represent some kind of last-ditch justification of the costs. As I said earlier, however, a figure of £23 an hour is quoted in it, and a total charge of £2,300—the cost of 100 hours' work—just does not stack up.

Photo of Sharon Hodgson Sharon Hodgson Labour, Gateshead East and Washington West

I came along tonight because I saw that Warm Front was the subject of the Adjournment debate and I wanted to talk about the good work that had been done in my constituency. I note that 4,000 households there have benefited from the various services that Warm Front offers. I have therefore been astonished to hear some of the things that have been said tonight. I hope that my hon. Friend would agree that the last thing that we want is for the scheme to end, and that what he would like to ensure is that no more pensioners or vulnerable people are ripped off, especially where public money is involved.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

My hon. Friend makes her point very well.

I know that my hon. Friend the Minister, for whom I have the greatest respect, will give great attention to the answers to all these points. May I also ask him to dwell on the most important issues that arise from what would otherwise be an excellent Government-funded scheme? How many of the most in-need citizens have not had their heating improved because they simply do not have the money to top up the grant? How many cannot now afford cavity wall or loft insulation because all the grant has gone on rip-off Warm Front installations? I look forward to hearing my hon. Friend's answers—if not now, at the earliest opportunity—so that we can offer reassurance to the people out there who would like to have this work done, and so that we can put on notice those who are ripping off the system that they need to get their act together, otherwise the work will be taken away from them.

Photo of Phil Woolas Phil Woolas Minister of State (Environment), Department for Environment, Food and Rural Affairs 11:08 pm, 3rd March 2008

Congratulations are due to my hon. Friend Mr. Flello on securing this debate on the Warm Front scheme. The number of Members who have intervened on him has added to the seriousness of his questions and his criticisms. I am grateful to all those who have taken part in the debate.

I want to outline the good things about the scheme, as my hon. Friend and others did, but let me reassure the House that I take these issues extremely seriously. This is an important scheme for many hundreds of thousands of vulnerable people, and it is my pledge to the House that I will of course carry on looking into these problems and criticisms.

Perhaps, Mr. Deputy Speaker, you would allow me to say—as have other hon. Members, including my hon. Friend the Member for Stoke-on-Trent, South—what is particularly pleasing about the scheme. It is because we value the scheme so dearly that it is so important to reinstate its integrity in the eyes of right hon. and hon. Members who have raised this issue.

The Government were the first in the world to set a target for the eradication of fuel poverty. We recognised that one of the key ways of making progress towards that was to support vulnerable households by providing efficient heating and insulation measures. That has been done on an unprecedented scale. Since the Warm Front scheme began in 2000, more than 1.6 million households have received assistance and this year we anticipate helping a total of around 240,000 households with some 100,000 receiving a heating measure: that could be replacing an old heating system or providing—in many cases, for the first time—central heating in the home. That significant action helps to mitigate the risk of those households struggling to keep warm at an affordable cost—a vital part of our work to help those vulnerable households to improve their quality of life.

We should also not overlook the value of the Warm Front scheme in reducing household carbon emissions. Saving energy is saving money for the household as well as cutting the amount of carbon, and we estimate a cut of about 500,000 tonnes of carbon.

In response to the debate, I would like to outline some of the measures and mechanisms in place to ensure that Warm Front delivers a high quality of service to those who come for assistance. I cannot deny that sometimes the customer's experience is not as good as we would all like. That is something we in the Department for Environment, Food and Rural Affairs and Eaga in its role as scheme manager continue to focus on.

I am aware of the concern about the prices charged for Warm Front heating installations that has been expressed here this evening and elsewhere, and it is right that there should be an interest in seeing that we make the best use of the funding available to us in order to protect taxpayers' money and, of course, help as many households as possible. Let me explain the pricing system.

The prices charged for Warm Front heating measures have been set on a regional basis, following an open and fully competitive procurement process. Installers in each region supplied tenders, outlining for how much they could perform each aspect of the installation work. Of those, the strongest tenders were chosen and they were used to set the prices for the scheme.

Photo of Oliver Letwin Oliver Letwin Shadow Minister without Portfolio

Does the Minister accept that it is difficult to believe that the tender is straightforwardly open when, for example, in my region of the south-west, the winner of the tender is a wholly owned subsidiary of the manager of the tender?

Photo of Phil Woolas Phil Woolas Minister of State (Environment), Department for Environment, Food and Rural Affairs

I thank the right hon. Gentleman, who has raised the issue diligently on behalf of his constituents. I have no complaint about that. In answer to the question, Iguana is a wholly owned subsidiary—albeit a legally separate entity—and is one of the 89 contractors granted access to the scheme. There is one other that provides insulation. I recognise the point, but I have never seen any evidence—I have looked into it, following concerns raised by the BBC, which also reported on the problem—of a conflict of interest. I acknowledge that the situation gives rise to concerns.

To provide further confidence that the prices charged for Warm Front measures continue to provide value for money, let me add that the Department has commissioned two independent price reviews. Both found that Warm Front offers value and provides heating measures at significantly below what can be found for the same measures installed under the same standards in the private sector. That is the picture that the independent review painted. We have heard some examples this evening, and my hon. Friend the Member for Stoke-on-Trent, South has asked me to look into the matter, and of course I will. I will meet my hon. Friend Joan Walley later this week. I will also speak to Eaga later this week, as I often do.

On the issue of excess payments, despite the fact that on the whole Warm Front provides well-priced installations, there are occasions, when the extent of the heating work is significant, or when the client has previously received assistance from the scheme, when the grant available for that household is not adequate to cover the cost of the measures recommended. In this financial year, that has been the case in 18 per cent. of households assisted. I cannot answer the other question asked by my hon. Friend the Member for Stoke-on-Trent, South, about those who have not gone ahead as a result.

I fully understand hon. Members' concerns about their constituents being asked to contribute towards their Warm Front measures, and paying more. My hon. Friend has raised that issue, and we take it seriously. Our clear aim is to provide everyone with the measures from which they could benefit at no cost to the household. One option would be not to have a grant limit. The reality, however, is that removing the grant spend limits per household would mean that the scheme could help many thousands fewer people.

The grant limits are currently being reviewed to ensure that they are set at the correct level. That will enable an assessment of the impacts on the range of measures and number of households that can be helped. I will update the House on that review. I will examine the issue of the charges and the instances that my hon. Friend raised, and I am grateful to him for not pushing those questions this evening, because I need to look into the particular cases.

Photo of Rosie Cooper Rosie Cooper PPS (Mr Ben Bradshaw, Minister of State), Department of Health

At the same time as examining those matters, will the Minister consider whether people could exercise choice on the high street to get a plumber to do the work to acceptable standards at a much reduced cost, which would enable DEFRA to help more people to beat heat poverty and get the heat that they need?

Photo of Phil Woolas Phil Woolas Minister of State (Environment), Department for Environment, Food and Rural Affairs

This is a Government scheme, and the tender process, including for the scheme manager, has quality thresholds. Those people who passed the test and put in for tender have been granted contracts, of which there are 89 across the country. That has been done on a regional basis, and there has been an attempt to do it on a local basis too. Where local suppliers are willing to participate in the scheme, their tenders are taken seriously. Let me say to some of the sceptics among my hon. Friends that there is no immunity from the practices of the rest of the sector just because this is a Government scheme.

Photo of Kevan Jones Kevan Jones Labour, North Durham

I am sorry, but it does not work like that. According to many of my constituents, the people who do their work in North Durham come from all over the country and have no contact with them. According to local CORGI suppliers, they have no chance of getting the work because of the cartel and closed shop run by Eaga.

Photo of Phil Woolas Phil Woolas Minister of State (Environment), Department for Environment, Food and Rural Affairs

The first point can be addressed by saying that the tendering process for contracts is on a regional basis— [Interruption.] Some of the cases that I have looked at involved company addresses that were some miles away, but local depots were being used. As far as I am aware—I choose my words carefully—none of the companies that have suggested that they could carry out the work adequately for a lower price than charged under the scheme put in tenders during the process. I am not saying that the situation is perfect, but I think we need a dose of realism when it comes to some of the accusations that are made.

Photo of Rob Flello Rob Flello PPS (Rt Hon Hazel Blears, Secretary of State), Department for Communities and Local Government

I am listening intently to my hon. Friend, but how can he square that statement with the fact that companies on the approved list for Eaga are offering to do work in my constituency at a substantially lower rate than the rate offered for Eaga work?

Photo of Phil Woolas Phil Woolas Minister of State (Environment), Department for Environment, Food and Rural Affairs

That is a slightly different point from that made by my hon. Friend Mr. Jones, but it is an important point, which is why I have offered to look into the cases that he has raised.

Let me re-emphasise that the installers chosen to work on the scheme were chosen on the strength of their tender as part of the competitive process, and the subsequent confidence in their ability to deliver. To show preference arbitrarily when using taxpayers' money—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-one minutes past Eleven o' clock.