A new report from an economics thinktank has outlined the impact the cost of living crisis is having in different places in Northern Ireland, but warns that a lack of official data and effective governance has hampered effective policy responses.
The report, from the Centre for Progressive Policy (CPP), examined the impact of the cost of living crisis on different areas of Northern Ireland, Scotland and Wales. Much analysis of the impact of rising prices to date has focused on England, largely due to a lack of available data.
The report finds a significant difference in the severity of fuel poverty between Belfast and other areas in Northern Ireland. While the capital is well connected to Northern Ireland’s gas grid, most other areas are not: 68 percent of the population of Northern Ireland depends on oil to heat their homes, rising to 82 percent in rural areas. Belfast’s housing stock is also generally more energy-efficient than much of the rest of Northern Ireland – particularly compared to many rural and coastal communities where housing stock tends to be older, larger and more expensive to heat.
The Energy Price Cap has never been applicable to Northern Ireland, and heating oil trades within a completely unregulated market which spiked long before the Energy Price Cap neared its peak. Each household in Northern Ireland received £200 of support in recognition of this, but this did not take into account the varied reliance on heating oil in different parts of the country and critically came long after the spike in prices, meaning most households had already endured months of drastic and persistent price increases.
In the absence of official statistics, in 2022 the fuel poverty charity National Energy Action (NEA) commissioned a Northern Ireland-wide representative survey to try to determine the extent to which rising energy prices have impacted households. They estimate that around 45 per cent of households in Northern Ireland were living in fuel poverty, defined as a household spending more than 10 percent of its income on home energy costs – more than double the 22 percent figure from 2016.
Northern Ireland’s rental market has also become the most overheated of the four nations of the United Kingdom, with rental prices having increased far more in Northern Ireland than in England, Wales, and Scotland since 2015 – a trend that increased with the cost of living crisis. Private rents across Northern Ireland rose by 9.9 percent between March 2022-March 2023, compared to 4.6 percent in England, 4.4 percent in Wales, and 5.1 percent in Scotland.
Northern Ireland has been hit particularly hard by rising living costs: a record 129,710 households are now receiving universal credit (UC), a figure which has more than doubled since 2020. The number of households receiving support for housing costs has tripled since the end of 2019, and now encompasses roughly one in six households, rising to one in four in the private rented sector.
The absence of a functioning government in Northern Ireland means that it is the only part of the UK to have lacked a proper policy response to the cost of living crisis. CPP argues that a lack of governance has contributed to the lack of resilience to rising prices and economic shocks. Northern Ireland’s Fuel Poverty Strategy is over a decade old, having been published in 2011, while local area fuel poverty statistics have not been published since 2016.
CPP is calling on the devolved governments of Northern Ireland, Wales and Scotland to provide more discretionary funding for councils, similar to the Household Support Fund available to English local authorities, to spend as they judge best to support their residents. CPP also calls for better data collection and sharing by devolved governments, councils and other local partners to enable local leaders to make better informed decisions about how to target support.
Ross Mudie, Research Analyst at CPP and report author, said: “Local leaders fighting this crisis on the ground in Northern Ireland have often had to do so with few resources, little strategic oversight and limited data-led insight about the situation as it confronts them.
“Fuel poverty rates are a real cause for concern in Northern Ireland, while soaring private rents in certain areas are adding further pressure. With many households outside of Belfast reliant on heating oil, Northern Ireland remains uniquely vulnerable to future price shocks.
“Local authorities know their communities best, and should be granted flexible funding to target the support that is most needed. An effective strategic response requires strong governance from the Northern Irish Assembly to both allocate funding and collect the data required to develop effective policy responses to respond to the situation on the ground.”
• The cost of living crisis in Northern Ireland, Wales and Scotland – www.progressive-policy.net/publications/the-cost-of-living-crisis-in-scotland-wales-and-northern-ireland