Insulation trade body the Association for the Conservation of Energy has threatened to take the government to court if it cuts the budget to help eradicate fuel poverty.

The Warm Homes Act mandates the government to end fuel poverty for vulnerable families by 2010. A family is in fuel poverty if it spends more than 10% of its total income on fuel. The recent leap in energy prices has made the Act impossible to achieve without an increase in government funding.

Currently the government spends £350m a year insulating homes under the Act. The ACE says it was concerned that the government will cut funding to the program to save money. Ian Manders deputy director of ACE said: “We’ve written to Hilary Benn and warned him that if he cuts the budget we will initiate a judicial review.”

The government says it is unlikely that any decision on the Warm Homes budget would be made before the forthcoming Comprehensive Spending Review.