Energy Efficient Scotland: consultation analysis

Potential legislative change to support the Programme

The consultation paper acknowledges that for a programme as ambitious as Energy Efficient Scotland, it will be necessary to review existing legislation and to consider what new powers or duties may be needed. As a minimum, the Scottish Government is considering the need for legislation to create a statutory duty for Local Authorities to develop Local Heat & Energy Efficiency Strategies (LHEES) and for regulation of district heating. The consultation paper also notes that the target of removing poor energy efficiency as a driver of fuel poverty will be achieved via the Energy Efficient Scotland Programme but that a Fuel Poverty Bill, due to be introduced to Parliament in June 2018, will set out the new statutory target: to eradicate fuel poverty by 2040.

Existing legislation and further legislative provision

There is already a wide range of legislation which gives powers and duties to the Scottish Government, Local Authorities and energy suppliers to improve the energy efficiency of buildings, and reduce emissions associated with their energy and heat supply. The Scottish Government would like stakeholders to comment on whether any changes are needed to existing legislation relating to energy efficiency. Views are also sought on areas where there may be need for further provision.

Question 29 - What are your views on the implementation and enforcement of existing legislation relating to energy efficiency and heating of buildings in Scotland?

Enforcement

There was a call from an Academic and a Local Authority respondent for clarity as to how energy efficiency standards will be enforced and penalised.

It was reported that there has been a low level of enforcement activity to date, and that any legislation needs to be enforced and checked to ensure compliance. Specifically, it was argued that existing legislation also needs to be systematically enforced through a unitary system, with independent assessors.

Standards framework and accreditation

General comments, in each case raised by a small number of respondents, were that without a robust quality and standards framework in place there is a risk that the Energy Efficient Scotland Programme will not deliver the outcomes the Scottish Government is hoping for. A review of how the Planning system should be revised to facilitate the transition to near zero carbon buildings was recommended by a Scottish Government delivery agent and a small number of Third sector respondents.

Other issues raised, in each case by one or a small number of respondents, were that the Scottish Government should ensure that:

• The standards framework it puts in place to underpin its Energy Efficient Scotland Programme is consistent with that of the rest of the UK. This was raised by Energy related private sector respondents.
• Consumer protections are to the fore. This was raised by a Building component manufacturers or services respondent.

Points raised specifically about Building Regulations or Standards were that they should be made more stringent and robust. It was also argued that consideration should be given to the potential to improve the operation of buildings and establish a degree of accountability for buildings reaching their aspired design efficiency. These issues were raised by a small number of Local Authority respondents.

Suggestions as to parts of the Building or Planning Regulations which require particular attention, in each case made by a small number of respondents:

• That they apply to existing properties and new builds. It was suggested that consideration should be given to applying standards at the point of a major refurbishment.
• Part L of the Building Standards in relation to condensing boilers.

Other comments were that planning consent powers to force companies to provide waste heat to existing networks would be welcomed.

There was specific reference to the Each Home Counts Review and a suggestion that there is still much work to be done before consumers and the industry can have full confidence in the accreditation framework.

It was also noted that the Repairing Standard for the private rented sector will need to be updated.

Resource implications

There was a concern, raised by a small number of Local Authority respondents, that new legislation will place more responsibility for implementation and enforcement on to Local Authorities and, as at previous questions, the resource implications for Local Authorities were highlighted.

Specifically, it was argued that a statutory duty to develop LHEES would have both a resource and financial impact on Local Authorities and that this approach will only be successful with Scottish Government consultant assistance and suitable funding streams or grants.

One suggestion was that a resource impact assessment for the Scottish Government, Local Authorities and other relevant stakeholders should be carried out. Other proposals were that energy efficiency funding should be ring-fenced or that an approach similar to the previous Green Deal initiative should be taken.

More generally, it was noted that energy efficiency is a National Infrastructure Priority and that adequate resourcing is required to ensure the implementation and enforcement of existing legislation.

EPCs

As at previous questions, concerns were raised about the accuracy of EPC assessments, and about how they cover some building types, including traditional buildings. This concern was raised by a small number of Private landlord or property management respondents. Other comments were that current approaches to enforcement lack robustness.

Other ways to support implementation

Other issues raised, in each case raised by one or a small number of respondents:

• The Scottish Government must have oversight of LHEES to ensure the strategies are aligned with national as well as local policy objectives.
• A key enabling factor will be how Local Authorities are supported and enabled to work with the energy distribution networks as well as energy suppliers. It was suggested that revisiting provisions of the Scotland Act 2016, sections 58 and 59, in terms of developing a Scottish approach to energy company obligations, may be appropriate once further details are known regarding the future of the gas network.
• Considering issues around tenements and common or shared property. There was a specific proposal that there should be a requirement for management arrangements to be in place to initiate, co-ordinate and implement retrofit projects.
• An extensive and ongoing awareness-raising campaign will be required.
• It would be beneficial to launch Energy Efficient Scotland with concise guides to current legislation for the different property sectors. These guides should be made available to members of the supply chain involved in delivering retrofit.

Finally, an alternative perspective was that existing powers should be sufficient, or that no further legislation is required.

Question 30 - What changes may be needed (if any) to this existing legislation to ensure that the Scottish Government, Local Authorities, and any other relevant bodies or persons, have the powers and duties necessary to support the Energy Efficient Scotland Programme?

Comments at Question 30 sometimes referred back to comments at the previous question or covered themes already set out above.

Legislative or regulatory changes

In particular, and as above, there was reference to issues which could be addressed by changes to regulations or legislation. Each was raised by one or a small number of respondents:

• Developers currently only consider their own building project in relation to heating, resulting in stand-alone plant without considering buildings in the surrounding area.
• How hydraulic balancing^[14] can be introduced.
• Local Authorities can enforce right to repair but not improvements such as insulation and other energy efficiency measures. To support the Energy Efficient Scotland Programme, it would be helpful if legislation could also give a right to improvement.

Other areas of legislation or regulation to which one or a small number of respondents thought changes might be required or should be made were:

• New legislation for refurbishment or extension of existing buildings whereby the refurbished/extended building has to meet certain EPC ratings on completion.
• Changes to electricity supply legislation.
• The implementation of the Boiler Plus regulations. Also, mandating of Stored Flue Gas Heat Recovery where applicable.
• Enforcement of Ecodesign regulations once they become law.
• Requiring cost of occupation data on sale and rental agreements, including standardised fuel costs and, in due course, any on-going energy [in]efficiency related charges, such as variable Local Authority taxes.
• Developing and enforcing quality standards to support the development of a high quality thermal retrofit industry.
• Referencing energy efficiency and low-carbon heating in national planning guidelines such as the forthcoming National Planning Framework.

Suggestions as how any changes required could be taken forward, in each case raised by a Local Authority respondent, included:

• For private rented homes, an extension of the Repairing Standard.
• Looking at the Tolerable Standard, including to ensure that homes that cannot be improved to meet a minimum energy efficiency standard are removed from the stock.
• Using the Scheme of Assistance in relation to the provision of information, advice and practical assistance and, in some cases, financial assistance to home owners, private landlords and private tenants. It was noted that this could require changes to the Housing (Scotland) Act 2006 to ensure that energy efficiency is a key focus of the Scheme of Assistance.

More broadly, it was felt that Local Authorities will need direct legislative mandates to develop and implement LHEES.

It was also suggested that legislative changes may be required to establish where responsibility for potential building failures lies if works to improve energy efficiency becomes mandatory.

Finally, it was thought that consolidation of existing legislation would be beneficial.

Overall approach to delivery

A small number of respondents commented on the wider policy or political environment which would be needed if positive change is to be achieved. Comments were that consistent and prominent political support will be critical to the effectiveness of Energy Efficient Scotland. Other views about how Energy Efficient Scotland can be delivered, raised primarily by Local Authority respondents:

• Not bringing in new legislation to either implement or enforce the policy may result in making the Energy Efficient Scotland Programme voluntary and will reduce its scope and efficacy.
• A clear policy framework with set targets must be developed.
• Delivery bodies should be assigned to each target and the scope of what they are responsible for delivering should be made clear.
• A robust process should be set out by the Scottish Government to ensure consistency between Local Authorities in matters of compliance monitoring and equitable data collection.
• Better private/public sector collaboration is required. This should be Local Authority led to ensure LHEES strategy can be successful.

Question 31 - What other elements of the programme may require new or amended legislation to enable the Energy Efficient Scotland Programme to operate?

Respondents highlighted a range of areas in which new or amended legislation may be required or highlighted policy-related areas they wished to see addressed. The themes raised often reflected issues raised at earlier questions and are set out in turn below.

Energy Efficient Scotland Programme: a small number of respondents commented that there should be a statutory framework for Energy Efficient Scotland including targets and scrutiny provisions.

Further comments were that new legislation should make clear whose responsibility it is to achieve Energy Efficient Scotland objectives.

Integration with other relevant policy developments: comments, in each case raised by one or a small number of respondents, were that:

• The new fuel poverty targets must be central to the work undertaken in Energy Efficient Scotland. One suggestion was that the Scottish Government should introduce legislation to provide a statutory foundation for the new fuel poverty target and strategy to deliver the Energy Efficient Scotland Programme.
• Given the importance of improving energy efficiency standards across tenures, the strategic fit with Local Housing Strategies (LHSs) should be formally recognised, with alignment across the Route Map, LHEES Guidance and revised LHS Guidance, to accord with the Housing (Scotland) Act 2001.
• The policy should be integrated with EESSH and LHEES. It was also suggested that there should be a duty for Local Authorities to produce LHEES.

Other points raised about the LHEES were that:

• It will be important for Local Authorities to set out how they intend to quality-assure the installations taking place, including how it will be verified that the work has been done as intended and in a safe manner.
• Local Authorities should also be clear in the LHEES about the order in which works will be done, and should make sure that the fabric of the building is properly insulated before, or at least alongside, new low carbon heat sources.

Financial incentives: It was suggested that the success of Energy Efficient Scotland will rely on the deployment of a range of financial and fiscal incentives to encourage the uptake of energy efficiency and low-carbon heat improvements. This was raised by a small number of Third sector respondents. They also suggested that the design of incentive schemes should be based on an evaluation of experience to-date of loans, cashbacks, and grants administered by EST on behalf of the Scottish Government. A review after 12 months of any incentives introduced was also proposed.

Suggestions as to other actions or options which could be considered were:

• Reviewing existing legislation relating to tax incentives for energy efficient properties.
• Introducing tax breaks for landlords who invest in the energy efficiency measures to their properties before the target date.
• Linking council tax to EPC ratings. Specifically, considering enhancing the council tax rebate provisions in the Climate Change (Scotland) Act 2009 and/or using the Land and Buildings Transaction Tax (Scotland) Act 2013 to reward action to improve energy performance in buildings.
• Making sure any funding available is easy to access.

Regulations: A small number of respondents suggested that planning and building regulations, along with condition standards, will need to be revisited and revised. It was also suggested that an extension of district heating regulations would be required.

Further comments were:

• There should provisions laying out timeframes for the review of building regulations.
• Changes to building standards should reflect developments around passive houses.
• There should be a focus on ensuring that new homes do not need retrofitting during the Energy Efficient Scotland Programme period. It was suggested that the Scottish Government should actively encourage and promote the use of PAS 2030 and PAS 2035 for the retrofit process and require it as a condition of funding, where funding is provided.
• Planning regulations should be amended to make the use of renewables easier.
• There should be a requirement for developers to build district heating infrastructure into their sites.

Other comments: there needs to be a robust approval scheme for businesses involved in the provision of energy efficiency schemes. An appeals process for EPCs was also proposed.

It was suggested that the law governing tenements in Scotland will need to be reformed to make energy upgrades easier, and that the Scottish Government should undertake a detailed investigation to determine what reforms are required.

Question 32 - Which organisation(s) should be responsible for delivering any new legal requirements?

Most frequently, respondents thought that the Scottish Government and Local Authorities together should be responsible for delivering any new legal requirements. This issue was raised by a broad range of respondents.

When referencing the Scottish Government, a small number of respondents referred directly to the Building Standards Division. References to Local Authority services were to Building Standards or Control, Planning, and Housing and Trading Standards.

Further comments about the Scottish Government and Local Authorities having responsibility were that:

• Organisations, and particularly Local Authorities, will need to be properly resourced and supported to deliver and enforce any new requirements. Both those who thought the Scottish Government and Local Authorities should be responsible, as well as those who thought Local Authorities only should be responsible, highlighted this issue.
• Local Authorities should have a key role in enforcement of any target, and that local delivery and enforcement will be crucial to ensuring all communities across Scotland benefit.
• There should also be parliamentary oversight.

Other suggestions, in each case raised by a small number of respondents, were that Local Authorities should be responsible. As above, there were references to a range of Local Authority services such as legal services, building control, planning, trading standards, environmental health, and housing. It was noted that under the Building (Scotland) Act, Building Control would be responsible for enforcement. A small number of respondents also noted that Local Authorities answer to the Scottish Government and that the Scottish Government should be responsible for reporting on Energy Efficient Scotland targets.

Other respondents, including a small number of Third sector respondents, thought an independent body should be responsible for enforcement. Further comments were that a formal, accountable co-ordinating body could ensure concentrated expertise, drive and leadership over the Programme timeframe. It was also argued that this way forward could help ensure a consistent and well-resourced approach.

There was also reference to a statutory role for a new 'National Delivery Mechanism', as proposed and outlined in the recent Scottish Government consultation: 'Scotland's Energy Efficiency Programme: Second Consultation on Local Heat & Energy Efficiency Strategies, and Regulation of District and Communal Heating' (November 2017). It was proposed that the body would report to Ministers and the Parliament against the Energy Efficient Scotland Route Map and statutory targets.

Further comments from the small number of respondents who thought that the Scottish Government alone should be responsible, were that they should be held accountable and that this approach would help ensure that the necessary funding is made available. There were also occasional references to a range of other organisations including: Trading Standards Scotland, Citizens Advice Scotland, and public bodies with large estates such as the NHS, Housing Associations, and OFGEM.