Delivering affordable warmth in rural Scotland: action plan

Scottish Government ( SG)'s new strategic approach to tackling fuel poverty should be based on ensuring that its fuel poverty/affordable warmth policy opportunities will not, in practice, be constrained by geography but will be delivered equitably and consistently throughout the whole of Scotland.

SG

SG should make vulnerable households their top fuel poverty/affordable warmth policy priority and ensure that their programmes actually reach them all, wherever they happen to live, and deliver verifiable improvements to their lives.

SG

The practical effectiveness of fuel poverty / affordable warmth programme outcomes must be properly monitored and assessed and should record the before - and - after real world improvements made to the health and wellbeing of the households concerned. The data collected must provide a check on how targets are delivered, improvements assessed and programme outcomes defined (see also Chapter 10.)

SG

SG to take on responsibility for commissioning Minimum Income Standard ( MIS) Scotland reports once every 3 years to provide top quality information on cost of living contexts and trends by 6-fold urban & rural classification ^[3] . This will ensure the final product becomes a recognised national dataset.

SG

SIMD domains to be expanded to better reflect rural disadvantage e.g. by adding a) a MIS index and b) an energy price index for all fuel types.

SG

UK Government ( UK Govt) through BEISto develop and adopt new modelling matrices which will reliably reflect and track rural and urban average energy consumption levels (using SG's six fold urban / rural classification).and which provide comparison with average dual fuel bills and average bills for each type of fuel. These would make it easier to identify disparity and therefore simpler to target remedial actions.

UK Govt / BEIS

SG's Community AnaIytical Services to further develop rural fuel poverty proxies. This will enable them to better assess the effectiveness of spend and delivery of anti-fuel poverty outcomes in rural Scotland.

SG

SG to use its influence on the next iteration (in two years' time) of the RdSAP tool and Energy Performance Certificate ( EPC) so that they properly reflect:

• the range and distribution of prevailing climate conditions and other characteristics in rural and urban parts of Scotland, including:
  • effects of draughts and wind-driven rain on heat loss and fabric condition;
  • room-in-roof and wall types;
  • consideration of opportunities to recommend more than one type of cost-effective heating solution; and
  • crucially, but on a comply or explain basis, they should also allow for an approved overrule when the most appropriate improvement measure/s would currently not otherwise be permitted.

SG

SG to encourage relevant protocol organisations to ensure consistency in the production of such improved RdSAP/ EPC reports through assessor training.

SG

SG to ensure that any future change to the Fuel Poverty Definition will be developed and used to provide a baseline measure against which progress in delivering specific affordable warmth outcomes, particularly to vulnerable households, can be properly measured.

SG

The Task Force supports the remedy proposed made by the Competitions and Marketing Authority ( Summary of AECs and remedies report, June 2016, para 20.24, h) namely that "….electricity suppliers of more than 50,000 customers be required to make all their single rate electricity tariffs available to all customers on restricted meters" … and (unconditional) upon the replacement of their existing meter." And wants Ofgem to closely facilitate the delivery of this outcome through appropriate guidance and regulation.

Ofgem

The Task Force recommends that suppliers with customers on restricted meters launch a proactive engagement campaign, targeting Priority Service Register customers in the first instance, to guide them through a thorough assessment of their heating needs and ensure that they are transferred without delay to the cheapest and otherwise most appropriate deal for their needs.

Suppliers

The Task Force also supports the CMA's two-year transitional price-capping remedy in the CMA report to remove the particular pricing disadvantages experienced by prepayment customers. ( Summary of AECs and remedies report), June 2016, para 20.25 a)

CMA

The Task Force recommends that Ofgem keep under close review progress made towards consumers switching (as recommended by CMA) away from the dominant supplier and intervenes in the market if progress suitable progress has not been made by 2021.

Ofgem

SG to work with Ofgem to ensure that all Pre-Payment ( PPM) customers also have access to tariffs and support (of the kind presently provided by "Our Power" to some local authority and Registered Social Landlord ( RSL) consumers) to enable them to access and manage the costs of their electricity as affordably and effectively as possible

SG and Ofgem

Local authorities and housing associations to further promote and support initiatives by new providers like "Our Power" to provide the highest quality energy price and customer care services to prepayment meter customers.

Local Authorities and Housing Associations

SG to investigate whether there is market supply failure in non-regulated fuels - to be defined as when there are less than 4 wh olly independent suppliers available within a defined market area - and if and where they evidence of detriment to consumers, to recommend the CMA investigate further.

SG

SG to promote, support through advice line information and grant-incentivise collective buying clubs for domestic oil and LPG.

SG

SG to promote and grant-incentivise the development and uptake of District Heating Schemes in those instances where they can deliver affordable warmth outcomes for consumers.

SG

The Task Force welcomes the commitment given by the UK Government that all customers in the UK will share equally the cost of the new power station required in the Shetland Isles. We urge the UK Government to keep the level of the Hydro Benefit subsidy under review so that any further divergence in cost differentials, such as the impact from replacing sub-sea cables to island groups, is tackled and these customers do not face further detriment from higher costs.

UK Govt

UK Govt to extend the 5p remote Areas Fuel Duty Discount (which applies to diesel and petrol) to domestic oil and LPG wherever there is market supply failure - to be defined as when there are less than 4 wholly independent suppliers available within a defined market area - (definition supplied by Office of Fair Trading).

UK Govt

SG to identify and recommend ways to UK Government of removing the persistent oil price differentials that exist, whatever the highs and lows of the basic price per barrel, between Scotland, England and Northern Ireland.

SG

Ofgem to investigate, develop and ensure the provision (either directly or by a trusted and independent intermediary e.g. Citizens Advice Scotland, ( CAS) of a non-transactional price comparison website where prices can be compared on all tariffs charged by suppliers of all domestic fuels in all distinct energy market areas of Scotland. CAS to explore the possibility of providing a bespoke service for these customers, delivering information, awareness-raising and a handholding advice service through referral to local and national agencies.

Ofgem, CAS

Ofgem and SG to lead and co-ordinate a campaign to publicise and promote the advantages of switching, with a particular priority to be given to off-gas rural areas. (See also 4.5.)

Ofgem & SG

SG to fund Home Energy Scotland ( HES) to extend the switching service provided through the HES network, building on the successful pilot of a switching service for tenants of local authorities and housing associations. SG is currently considering extension of this service and it should now be made available to all households.

SG

SG to ensure that switching prompts are embedded in energy efficiency programmes, and expanded to other activities where possible. This should include advice for the regulated and non-regulated fuels.

SG

UK Government to ensure that the Smart Meter roll-out reaches rural customers, particularly vulnerable customers and all those living in the more expensive, off-gas parts of rural and remote Scotland as early as possible in the rollout timetable. They should also ensure that these customers receive the technology that allows them to access the full benefits of the smart meters, requiring SMETS 2 capability.

UK Govt

Scottish Parliament and Scottish MPs to actively support information and switching campaigns and services aimed at saving consumers money on their energy bills. To further support this activity, and the recommendations of this report, we recommend the relevant subject Committees in the Scottish and UK Parliaments conduct annual scrutiny sessions to review progress in tackling fuel poverty.

MSPs and MPS

SG and Ofgem to consider NICE March 2015 Guidelines on excess winter deaths and illness and the health risks associated with cold homes with a view to expanding and improving the rural dimensions to existing definitions of at risk groups and sectors of society which are defined as 'vulnerable.'

SG and Ofgem

SG to "rural-proof" all of its fuel poverty programme to ensure that they both prioritise and, in practice, reach all vulnerable clients especially those living in off-gas, rural areas.

SG

SG to contract HES to further develop its existing third-party portal service to ensure that it delivers to all rural and remote areas and provides a seamless referral mechanism between all health, social care and locally based support organisations. The purpose is to ensure that all vulnerable households actually receive the help and support they need.

SG

NHS Scotland to discuss with the Royal College of General Practitioners ( RCGP) and other relevant professional bodies to agree a process of contractual obligation by which all patients with fuel poverty related health conditions including those living in rural and remote GP practices areas, are referred to appropriate fuel poverty advice and support agencies for the practical care measures they need.

NHS Scotland

To further facilitate and support inter-agency collaboration, SG to share its comprehensive mapping service which identifies all of Scotland's fuel poverty / affordable warmth service providers, the geographical areas they cover and whether they make referrals to Home Energy Scotland and vice versa.

SG

Ofgem to expand the role and duties of energy suppliers in line with the recommendations put forward in OFGEM's recent Priority Services Register Review. In summary, this "will require companies to move away from a 'box-ticking' approach and adopt pro-active and procedures to identify and help their vulnerable customers."

Ofgem

Ofgem to include in their annual reports on the retail energy market, the extent to which each of them has addressed and mitigated the detriment to customers as highlighted by CMA in its recent Energy Market Investigation report. They should make particular reference to reductions they have made to the energy bills of vulnerable clients and the numbers and percentages of those who have switched from the dominant supplier - with specific reference to those living in off-gas rural areas.

Ofgem

SG to commission a comprehensive 'energy carer' pilot to assess the effectiveness of high quality, in-home locally delivered, holistic support in bringing verifiable affordable warmth improvements to cold, vulnerable fuel poor households living in any part of remote rural Scotland.

SG

As a consequence of the completed Priority Services Register ( PSR) review, Ofgem to impose meaningful changes to the PSR license conditions currently applied to energy companies to make sure that they give Ofgem the details of all their vulnerable consumers so that Ofgem can ensure that appropriate "hand-holding" support is made available to them for switching and/or other suitable fuel poverty alleviation measures.

Ofgem

SG to ensure that Scotland's Energy Efficiency Programme ( SEEP) grant and loan funding is made available to support the costs of essential building repair and improvement works which may be required before energy efficiency improvement measures can be installed.

SG

SG to change the criteria for WHS to include funding for enabling measures such as domestic oil and LPG tanks, electrical upgrades, flue lining and the installation of the most efficient storage heaters.

SG

Small firms based in rural areas should be encouraged and enabled to provide the skilled workers required to deliver all SEEP funded projects e.g. by SG working with the British Board of Agrement ( BBA) to simplify accreditation and tendering requirements and ensuring that there are more, qualified trainers available to deliver accreditation in rural areas.

SG and BBA

SG to issue guidance to all agencies engaging in the delivery of both HEEPS ABS and WHS to ensure closer joint working, where practicable, including guidance on data sharing.

SG

Historic Environment Scotland should research, develop and promote more case studies to highlight affordable insulation, draught protection and heating options that prolong the life and conservation status of rural Scotland's built heritage whilst delivering effective affordable warmth and ventilation for occupiers.

Historic Environment Scotland

SG to develop a new scheme for private sector landlords which would require but incentivise them to bring their rented properties up to an affordable warmth level by offering them a mix of grant and loan, the size of which would be closely linked to agreement on the rent levels to be charged and the nature of the allocation process. This action should be re-visited once SG has consulted on the Regulation of Energy Efficiency in the Private Sector ( REEPS).

SG

SG and installers to verify that all vulnerable households, including private tenants and their landlords, receive the locally-delivered support and advice they need to enable both parties to realise the benefits that should accrue from retrofit measures.

SG

SG and umbrella organisations like Scottish Federation of Housing Associations ( SFHA) to investigate and consider the potential use of expertise already embedded in some rural housing associations to extend their outreach support services to the affordable warmth needs of private sector households in their communities, as well as continuing to meet existing social housing energy efficiency obligations to their own tenants.

SG

UK Govt and SG to recognise that implementing policies which reduce rural fuel poverty also increase rural disposable incomes, prosperity and stimulate additional economic activity and job creation, thus delivering solid, rural economy and community development benefits that cover several of Scotland's National Outcomes.

UK Govt and SG

SG and UK Govt to work together to deliver a supportive and stable policy framework that enables the development of local energy projects that tackle fuel poverty. Funding of in-depth support (both technical and capacity building) from Scotland's Development Agencies should also be supported. Delivering affordable warmth projects in rural communities is a very significant infrastructure development that justifies considerable planning and investment decisions by training and development agencies and should therefore feature in the review currently taking place on these agencies respective roles in Scotland.

SG, UK Govt & Scotland's Development Agencies

Ofgem to investigate and set out resolutions to the National Grid infrastructure constraints which are delaying and preventing rural communities from deriving and maximising local social and economic benefits, including lower energy bills, from their community controlled renewable assets.

Ofgem

In so far as practicable, SG to supplement its existing support schemes, Community and Renewable Energy Scheme ( CARES) and Local Energy Challenge Fund to direct energy suppliers to fund and work with community-controlled renewable energy providers to develop and roll out new initiatives (like the ACCESS project in Mull and the NINES project in Shetland) which effectively circumvent the network constraints and which enable communities to derive, and pass on to local consumers, the full social and economic benefits of the cheaper 'surplus' energy which they generate locally from renewable sources.

SG

SG and BEIS to ensure all affordable warmth/fuel poverty funding programmes for rural areas should have a minimum contracted life cycle of 5 years in order to encourage and enable smaller local contractors to invest in the training and accreditation required to deliver the outcomes and, thereby, to maximise the local economic benefits to be derived from the public investment made and, in the process, as well as up-skill the local labour force and help population retention.

SG and BEIS

SG to ensure that all the component parts of the new SEEP and Scottish ECO programmes should be focused to ensure that, first and foremost, all vulnerable households are the priority target.

SG

SG should also ensure that wherever they may live in rural and remote Scotland, the programmes must be capable of actually delivering the rates of grant funding support required to fully meet the potentially higher costs of installs.

SG

SG to develop criteria by which they can ensure their new powers over Social Security, Winter Fuel and Cold Weather Payments prioritise householders in greatest fuel poverty / affordable warmth need and take full account of the locality effects of cold, wind and rain.

SG