The government's response to yesterday's shocking 22% rise in the number of households suffering fuel poverty was to declare that they are engaging in the most ambitious home improvement scheme since the second world war.

Ambition is essential if we are to tackle the contribution of our cold, leaky homes to climate change and meet the legal obligation to end fuel poverty by 2016 – but it is difficult to marry the hyperbole from ministers with the policies being developed.

First of all, the benefit of new Warm Homes Discount for some pensioners is almost entirely cancelled out by the recent reduction in Winter Fuel Payments. Meanwhile, proven fuel poverty programmes are being axed as a result of spending cuts. Warm Front, the flagship policy giving energy efficiency grants to vulnerable households, ends in 2013 . It will be the first time in 30 years that the UK does not have a central government-funded energy efficiency programme.

Secondly, the Green Deal will help cut emissions – but the government now acknowledges it can't tackle fuel poverty. Before the election, all three major political parties enthusiastically grabbed the idea because it promised the silver bullet of insulating the nation's homes at no cost to the exchequer. Households would pay for their own improvements through the reductions on their bills that energy savings would bring.

For owner-occupiers who use lots of energy and live in properties that won't cost much to improve, it could be a canny investment. But because the fuel poor often under-heat their homes, there aren't energy bill savings to be had.

So the task of tackling fuel poverty falls to a third initiative, the Energy Company Obligation (ECO). Ministers have said this scheme, paid for through bills, could provide a maximum of £2bn of energy efficiency measures annually – £20bn over 10 years – aimed at tackling fuel poverty and supplementing the Green Deal for those "hard-to-treat" properties requiring more expensive measures such as solid wall insulation.

More than 10m UK homes are hard to treat, and we now know at least 5.5m homes are in fuel poverty. Even allowing for a considerable overlap between these groups, the numbers for ECO don't stack up.

A report by Consumer Focus in 2009 estimated the cost of improving the energy efficiency of the homes of the fuel poor sufficiently to lift the overwhelming majority of them out of fuel poverty was £24bn. The number of households now in fuel poverty is more than double that used in their study, and rising.

The scheme's predecessor, the Carbon Emission Reduction Target, provides about £1.3bn worth of energy efficiency measures annually. This adds £51 to the average annual energy bill, so cranking ECO up enough to do the job of both ending fuel poverty and subsidising a refit of all hard to treat homes would add hundreds of pounds to bills – pushing households into fuel poverty as quickly as it takes them out.

Tackling fuel poverty needs more money from the state. The government has to accept that a proportion of the cost of decarbonising the housing stock must be paid for out of the Treasury's coffers. One way is for revenues of the carbon floor price and EU Emissions Trading Scheme, both of which will push up energy bills, to be returned as additional funding for ECO, which must be focused on vulnerable and low-income households.

Even when choices are on offer to step up action to tackle fuel poverty at zero cost to the taxpayer, the government delays action. It is waiting until 2018 to introduce a minimum energy efficiency standard for rented homes, which could lift 150,000 households out of fuel poverty.

The presence of homes in our society so cold they are health hazard and can kill is a disgrace. The fact that ending this scandal brings multiple environmental, health and economic benefits makes the failure of successive governments to tackle fuel poverty even more incomprehensible.

Dave Timms is a UK climate and energy campaigner with Friends of the Earth