Timmy Dooley (Clare, Fianna Fail)
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Question 34: To ask the Minister for Social Protection her plans to put the household benefits package out to tender. [21431/11]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 43: To ask the Minister for Social Protection if she will reconsider the cuts to fuel, electricity and phone allowances for the unemployed; and if she will make a statement on the matter. [21408/11]

Billy Kelleher (Cork North Central, Fianna Fail)
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Question 44: To ask the Minister for Social Protection if she negotiated with providers, other than Eircom, in relation to recent changes in the telephone allowance. [21426/11]

Pearse Doherty (Donegal South West, Sinn Fein)
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Question 46: To ask the Minister for Social Protection if, prior to announcing the cuts to the fuel allowance and household benefits package, she conducted a poverty impact assessment of the measure; and if so, the outcome of same. [21329/11]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 48: To ask the Minister for Social Protection if she will reverse her decision to cut the fuel allowance and household benefits package in view of the impact such cuts will have on thousands of vulnerable persons, including older persons and those with disabilities. [21320/11]

Joan Burton (Dublin West, Labour)
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I propose to take Questions Nos. 34, 43, 44, 46 and 48 together.

I have no plans to reconsider the changes to the fuel allowance and household benefits package which were announced last week. From September 2011 the fuel allowance is to be standardised at €20 per week, the rate currently received by the majority of customers, with no additional allowance for living in a smokeless area. The cost of the telephone allowance will be reduced following negotiations with Eircom which will ensure that customers receive €26.86 of value on their bills, at a cost to the State of €22.22 per month. The number of free units provided under the electricity and gas allowance will be reduced to the level at the start of 2007 (from 2,400 to 1,800). It should be noted that the unemployed do not receive these benefits apart from the long-term unemployed who may receive a fuel allowance. These three measures will generate savings of €17 million in 2011 and €65 million annually.

While we have had to implement these measures, the House should be aware that these savings were provided for last December in Budget 2011 but were not specified or announced by the then Government at that time. On the specific measures, the rationale for paying the smokeless allowance to customers in smokeless areas is no longer valid. The price differential between the types of coal is as low as 2% while the allowance represents an addition of 20% to the Fuel Allowance. Use of coal has dropped considerably, to about 3%. It is inequitable to continue paying this top-up allowance when it is not required.

As regards the telephone allowance, the deal negotiated with Eircom represents good value for the State and the customer. The main saving is that the Department will no longer pay a monthly rental for handsets, but customers will be able to keep their set at no charge. Indeed, a lot of households no longer use or have their original handsets so it makes no sense that the State would continue to pick up this cost.

The reduction in units in the electricity allowance and equivalent gas allowance is essential to control spending. Because the allowances are based on units the full cost of energy increases has been borne by the State, with no incentive for customers to switch to other cheaper companies. Only 16% of social welfare customers have switched companies compared to 42% nationally. People will be able to offset some of the reduction in units by availing of cheaper rates.

As regards the commitment to putting the household benefits out to tender, I am still exploring this issue. However, the Chief State Solicitor's Office has advised that the Department does not have the right to go to the market to procure electricity as it is not actually the customer in the first instance. This view has been endorsed by the Commission for Energy Regulation and the Competitions Authority. I am indeed anxious to get the best value possible from the utility companies and the deal concluded with Eircom is a positive response in this regard. We are in negotiations with other suppliers also and I am hopeful that having regard to the difficult budgetary situation that we find ourselves in that they will respond positively too given their social responsibilities. We also have initiated contacts with smaller providers.

While of course we want to protect the basic social welfare payments which have very positive economic and social effects, regrettably there is an ongoing necessity to achieve savings due to our commitments with the IMF/EU/ECB Troika. There will be an ongoing necessity to curtail overall expenditure in 2012 and in later years. The Comprehensive Review of Expenditure currently underway in all government departments and agencies will form the basis for making the necessary decisions to achieve this.

A poverty impact assessment was carried out on a range of options for the future administration of the household benefits package. This focused on the potential impact of changing the electricity allowance from a unit base to a cash base to avail of cheaper rates available. The assessment concluded that the proposal would have limited impact.

Along with other Departments and agencies, my Department has been working with the Department of Communications, Energy and Natural Resources on an Affordable Energy Strategy and this is expected to be brought to Government in the Autumn. Energy poverty is a factor of income, energy prices and the thermal efficiency of the home. The most cost-effective means of protecting households from energy poverty is to reduce their consumption of energy through improving the thermal efficiency of the home. Sustainable Energy Ireland has administered an energy efficiency programme for privately owned low income households (Warmer Homes) since 2001. Over 65,000 such households have benefited to date, with a further 15,000 expected to receive energy efficiency upgrades this year. A similar upgrade programme is also in place for local authority houses.