Home energy consumption has been reduced, but what are the reasons?

Some good news for a change. In each of the past three years, the amount of fuel burnt in UK homes has reduced. Reversing what had looked like an inexorable long-term trend of increases.

The biggest drop has been in gas consumption, down 12 per cent in just three years. Gas being the main fuel for heating and hot water, that implies our heating systems and building fabric are getting more efficient. Or it could just mean we have had some unusually mild winters. Or, more alarmingly, that rising prices are leading to deliberate heat rationing.

With the number of gadgets per home increasing, one might have expected electricity consumption to be rising. But over the past three years, we have just about held steady overall consumption levels in our homes. Again, a comforting headline figure.

Before we become too complacent, we have to remember that, up until 2004, we were witnessing a pretty steady increase in consumption levels. Between 1990 and 2004, overall energy consumption in homes soared by 19 per cent.

In its 2004 Housing Act, the Government legislated that during this decade English households would become 20 per cent more energy efficient. Are we on track to achieve this statutory commitment?

A new study from the National Audit Office (NAO) raises doubts. Called "Programmes to reduce household energy consumption", it attempts to quantify whether the Housing Act, plus other more aspirational targets, are being delivered. It finds much of the published monitoring data either opaque, or completely non-existent.

Its study appears against a background of growing concerns regarding the social impact of rising fuel prices. Drops in consumption may have far more to do with inability to afford to buy, rather than confidence that energy is being consumed far more efficiently than before.

The NAO acknowledges that government has devoted more attention recently to studying energy use in homes. And that, for whatever reasons, the consumption trend line - and hence that of the resultant greenhouse gas emissions - is much more encouraging than in most other sectors of the energy-using economy.

Consequently it notes with pleasure that some £2.6bn is being invested each year in improving the energy efficiency of UK homes. The vast majority of that money is coming from private sector sources, rather than the public purse.

With some 24m homes spending now on average well over £1,100 a year on buying fuel, that means that around 10 per cent of annual revenue expenditure is being re-invested into capital improvements, designed to reduce future revenue expenditure. That is the ratio long recommended to the public sector by the NAO's sister body, the Audit Commission.

This is wise investment, the NAO concludes. "The value of the possible energy savings is thought to outweigh these costs many times over." The "typical household" could be saving 30 per cent of their fuel bills "if they adopted the cost-effective measures already available to them."

The NAO report contains a series of detailed recommendations to government on how it can build on the recent (apparent) success. It does warn that there are many "risks and uncertainties" involved with delivering the levels of energy savings that will be required.

Understandably most measures installed to date have been the easiest ones. In particular, older homes - frequently with solid, rather than cavity, outside walls - "may need to assume greater importance". Whilst the technologies are certainly available to upgrade these, they will undoubtedly cost more per unti to improve.

The barriers to action, that stop householders from making these cost-effective improvements, are "both real and perceived". Government is praised as "now having a good understanding of these barriers." But "it is less clear whether the policy mix is addressing all of them sufficiently", warn the auditors.

This autumn the Government is due to launch a major consultation on its long-term strategy to improve the energy efficiency of the building stock. This will lead to the long-promised 2020/2050 strategy emerging in the spring.

As yet, as the NAO acidly points out, there are no explicit targets for household energy efficiency beyond 2010. Fuel price rises, together with desperate warnings from climatologists, mean that this new strategy becomes absolutely critical.

Approaching 30 per cent of all energy is consumed in the housing sector, making it the largest sector of the lot. There is an awful lot riding upon getting these policies right.