Fuel Poverty Strategy for Scotland: consultation analysis

3. Recognising the distinctiveness of all our communities

Summary of Questions 3 and 4

• Many thought the Scottish Government should recognise and respond to higher living costs in island remote rural communities and follow the recommendation to upgrade the MIS threshold.
• Suggested challenges identified with tackling fuel poverty in island and remote rural communities included weather and climate, the lack of mains gas, the older population profile, lower than average incomes, the age or condition of much of the housing stock and poor local supply chains.
• The commitment in the draft Islands (Scotland) Bill that any new policies should be ‘island-proofed’ was welcomed.
• Opportunities identified included the sustainable development of natural resources and specifically, renewable energy generation projects.
• It was suggested that the concept of ‘island proofing’ should also be applied to remote and rural areas.

3.1. Section 3 of the consultation paper notes that addressing fuel poverty in Scotland’s remote rural and island communities presents a different set of challenges to many other parts of the country, with challenges identified including that homes are more exposed to wind and weather, and more expensive to heat as the majority are not connected to mains gas. Island-specific opportunities identified include a more readily identifiable community, strong local relationships extending to a tradition of self-sufficiency in many places, and a resource-rich, high quality environment that supports good quality of life.

3.2. Questions 3 and 4 asked if respondents have identified additional challenges or opportunities - at Question 3 in relation to island communities, and at Question 4 in relation to remote rural communities.

Question 3 - In relation to island communities, are there any additional

a) challenges; and/or

b) opportunities

that we need to consider in developing our strategy?

3.3. A total of 79 respondents commented at Question 3a and 68 respondents at 3b. A breakdown of the number of comments received by respondent type is set out in Table 4 below.

Table 4: Number of comments by respondent type

Type of respondent	Number of comments at 3a	Number of comments at 3b
Organisations:
Community or Tenant Group or Federation	4	2
Energy Company	5	4
Health and Social Care	4	3
Housing Association	7	7
Housing Body or Group	3	2
Inter-agency Group or Partnership	5	5
Local Authority	19	17
Other	7	5
Research Group	2	2
Third Sector	14	13
Organisations	70	60
Individuals	9	8
All respondents	79	68

3.4. In general comments, respondents sometimes noted that the challenges faced by island and rural communities, and the high levels of fuel poverty experienced, have been well-documented by the Scottish Rural Fuel Poverty Task Force, but also that recognising challenges is meaningless unless practical action results. It was suggested that the Scottish Government should recognise and respond to established higher living costs in these areas and follow the Definition Review Panel’s recommendation to upgrade the MIS threshold. Around 1 in 5 respondents who answered the question made this point.

3.5. As a consequence of the proposed new definition, and the large downward adjustments in the percentage of rural households considered fuel poor that will result, it was suggested that funding for energy efficiency improvements could be directed elsewhere. If higher living costs in rural areas are not included in the definition, it was argued that the problem of rural fuel poverty will be masked, even if HEEPS: Areas-Based Schemes ( ABS) and SEEP schemes recognise the higher costs. With respect to ABS, it was also suggested that although small rural towns may benefit, very isolated rural communities do not.

Challenges

3.6. Around 1 in 7 of those who commented identified issues associated with weather and climate as challenges for island communities adding to building maintenance costs and making it more difficult to achieve recommended temperatures.

3.7. Challenges resulting from the remote location of island communities included high costs in relation to travel and transport including high petrol cost and delivery surcharges. One respondent suggested petrol costs are a significant factor in fuel poverty and should be included in AHC. Around 1 in 5 of those who answered the question highlighted lack of mains gas and hence higher energy prices, and it was noted that since prices of alternative fuels such as heating oil and electricity are not regulated, their prices are higher and can fluctuate. Dependence on electricity, and a weak distribution network prone to power outages was suggested to put householders with no alternative heat source at higher risk during power cuts, while poor access to broadband was suggested to exclude some communities from digital innovation or to preclude individuals or communities benefiting from the opportunity to switch suppliers and obtain lower tariffs.

3.8. Issues associated with population profile included that islands typically have an older population, with lots of people living alone. The high levels of fuel poverty in single pensioner households were noted. Difficulties experienced by young people trying to find their own homes were also noted. Related healthcare issues included both high demand from an older population, and higher costs and poor provision, with a suggestion that it can be difficult both to secure and retain staff.

3.9. Around 1 in 10 respondents who answered the question noted that low incomes are common on islands, which may be economically fragile areas, and it was suggested that, even with improved energy efficiency, the combination of low incomes and high energy prices may still leave some households in fuel poverty.

3.10. Within communities, challenges identified included difficulties in engagement and encouraging participation in strategy development. Digital communication was suggested to mitigate against involvement by older people. It was also suggested that in small, close knit communities, some may be reluctant to admit to being in fuel poverty, and that within the agricultural and farming communities, individuals may not identify themselves as needing assistance.

3.11. It was also argued that other communities, including equalities groups, should be recognised in addition to those defined on a geographical basis.

3.12. Problems raised specifically with respect to the cost of electricity included absence of cheap tariffs for single supply (although it was acknowledged this is to be introduced) and lack of choice of utility companies. Higher prices paid for electricity by customers in remote areas were also raised, and that communities in northern Scotland and the islands are paying more for their electricity supply than does the rest the country, even though islands may be net exporters of electricity. A small number of respondents specifically associated these higher costs with the replacement of submarine cables distributing electricity, and it was also suggested that Scotland’s National Marine Plan could make replacing these cables more expensive than previously thought, with the unintended consequence of pushing households further in to fuel poverty.

3.13. Issues associated with the age or condition of much of the islands’ housing stock were identified as presenting challenges by around 1 in 5 respondents who answered the question, noting a high percentage of poorly insulated, energy-inefficient homes, that are often older detached houses of solid wall construction. Specific problems associated with improvement of older properties, particularly of traditional construction included:

• The high cost of necessary work. This was highlighted by around 1 in 7 respondents who answered the question. It was also noted there are not likely to be opportunities for economies of scale for work in rural or island areas.
• Restrictions on what is permissible in a conservation area – both in increasing cost and meaning householders may have to accept solutions that they would prefer not to have – such as internal wall insulation.

3.14. There was also concern that it may not be possible for many properties to achieve an acceptable EPC rating or that it will not be financially viable to do so in some cases. Reform of the EPC system with respect to the grading of off-gas properties was advocated, since the current methodology reflects the cost of heating a property rather than its energy efficiency.

3.15. Around 1 in 6 respondents who answered the question suggested installation of energy efficiency measures was constrained by local poor supply chains or limited by a shortage of accredited installers.

3.16. In respect of HEEPS funding, it was suggested that although rural areas have received an uplift in funding, the differences between indicative costs and actual costs may be such that funding provided still does not cover delivery. It was also noted that HEEPS does not cover social housing. Mainland contractors were sometimes suggested to be unwilling to accept work in remote areas or not be trusted by householders who would prefer to use trusted local contractors.

3.17. It was also suggested that there may be a shortage of local support, advice and delivery with respect to understanding heating systems, tariffs and energy efficiency measures.

3.18. With respect to the challenges identified it was suggested that the Scottish Government should:

• Ensure a full islands impact assessment is undertaken, and that action to mitigate any negative consequences is put in place. The commitment in the draft Islands (Scotland) Bill that any new policies should be ‘island-proofed was noted or welcomed by around 1 in 8 respondents who answered the question. Better use of Cold Weather Payments and the Winter Fuel Allowance were suggested to have potential to contribute to ‘island proofing’.
• Review electricity surcharges in remote areas.
• Use real energy consumption data. Scottish Government estimates of fuel poverty, derived using modelled data and proxies, were argued to be lower than figures obtained using real energy consumption data. Distribution of expenditure for heating in rural and island communities was also argued to be different to that in urban areas. It was suggested that these differences result from highly complex systems of underlying influences.
• Provide additional and longer-term funding. In particular, annual funding programmes were noted to be difficult to tie in with the 5-year strategies typically operated by social landlords.

Opportunities

3.19. In terms of opportunities, general suggestions included:

• The Scottish Government should allow flexibility for communities to develop unique solutions rather than seeking to adopt a ‘one-size-fits-all’ approach. Local authorities and third sector partners were often suggested to be best placed to tailor resources to local circumstances.
• There should be explicit links between the Fuel Poverty Strategy and the climate change agenda, providing opportunities for joined up working.
• A ‘Fuel Poverty Challenge Fund’ could be used to boost innovation and community-based partnerships.

Renewable energy generation

3.20. Sustainable development of natural resources and specifically, renewable energy generation projects were suggested to present opportunities, by around 1 in 9 respondents who answered the question, and that developments could be owned and/or operated by local communities. Such community-led projects should, it was argued, be fast-tracked through the development and planning processes. Benefits identified in production of low carbon energy included providing energy security, environmental benefits and job creation.

3.21. There were also calls for the Scottish Government to resolve grid constraints to provide additional carrying capacity for energy from renewable sources. However, given these constraints it was suggested that opportunities to set up new local electricity supply and storage projects should be explored, and that the proposed ‘Publicly Owned Energy Company’ could boost such projects by offering to purchase power on a long-term basis. Examples of several existing community groups and energy generation projects were highlighted.

3.22. The potential of other district heating schemes was highlighted by several respondents although district heating was also suggested to have limited use and relevance to island communities.

3.23. Prioritisation of alternative fuel sources such as biomass, and air source heat pumps was suggested. Biomass and anaerobic digestion combined heat and power and district heating systems were suggested to have potential additional benefits including restoration of forests and native woodlands, providing opportunities for recreation and tourism and generating employment.

3.24. In terms of funding, an opportunity to prioritise local renewable energy solutions through schemes such as the CARES Loan was suggested.

Installation of energy efficiency measures

3.25. With respect to energy efficiency it was suggested that a review or call for evidence on innovative approaches/smart technologies could identify new options.

3.26. Other opportunities identified included:

• Developing local supply chains.
• Addressing skills shortages and creating employment by investing in apprenticeships or training and helping to achieve PAS2030 certification ^[12] for local contractors. It was also suggested that, since energy efficiency has been designated as an infrastructure priority, skills shortages should be addressed at a national level.
• Relaxing the requirements of PAS2030 accreditation for simpler projects such as loft or floor insulation, or introduction of other quality management or regulatory systems that may be more practical for small contractors.
• Allowing flexibility on the spend per property, accepting a trade-off between treating the worst performing properties and treating larger numbers of homes.
• Installing smart meters as fast and reliable broadband is extended.
• Reviewing Schemes of Assistance to ensure effective approaches are in place in relation to the private sector. Joint Schemes across the island local authorities could be explored in terms of opportunities for more efficient ways of working and cost savings.
• Integrating delivery and energy advice services to provide a complete package of high quality support.
• Replicating the Warmer Homes Scotland model to boost training and employment.

Providing advice and support

3.27. Putting greater resource into advocacy and support, including face-to-face advice was suggested to be necessary.

3.28. The potential for involving communities in identifying those in fuel poverty and providing advice and support was also suggested and longer-term funding for community groups was proposed. Wider community engagement was suggested as a means of addressing any potential stigma associated with fuel poverty, and of value in facilitating a higher take up of energy efficiency measures. Suggestions included supporting Community Councils in such activities.

3.29. It was also suggested that there should be support for community buying groups, to give more householders the opportunity to obtain lower prices for unregulated fuels.

Other opportunities identified

3.30. Among other opportunities, suggested by only one respondent, was installing infrastructure for electric vehicle charging.

Question 4 - In relation to rural and remote rural communities, are there any additional

a) challenges; and/or

b) opportunities

that we need to consider in developing our strategy?

3.31. A total of 83 respondents commented at Question 4a and 64 respondents at b. A breakdown of the number of comments received by respondent type is set out in Table 5 below.

Table 5: Number of comments by respondent type

Type of respondent	Number of comments at 4a	Number of comments at 4b
Organisations:
Community or Tenant Group or Federation	4	1
Energy Company	5	4
Health and Social Care	3	2
Housing Association	7	5
Housing Body or Group	3	1
Inter-agency Group or Partnership	5	4
Local Authority	20	18
Other	7	5
Research Group	2	2
Third Sector	17	15
Organisations	73	57
Individuals	10	7
All respondents	83	64

3.32. There was significant overlap in responses at Questions 3 and 4, and some respondents provided a combined answer while others commented ‘see Question 3’ as their response at Question 4, or indicated a view that issues concerning islands and remote rural areas are essentially the same. Amongst respondents who chose to respond only at Question 4, or who answered both questions, frequently raised issues were very much in line with those identified at Question 3, namely:

• Higher heating costs as a result of being off-gas grid.
• Higher improvement costs associated the nature, age or condition of much of the housing stock.
• Poor delivery chains and shortages of accredited contractors.
• Desirability of longer term funding arrangements including for organisations working to alleviate fuel poverty and particularly for community groups.

3.33. A small number of other points made at Question 4, have been included in the analysis at Question 3 to avoid duplication.

3.34. Points specific to challenges and opportunities for rural and remote rural communities on the mainland were that:

• The concept of ‘island proofing’ should also be applied to remote and rural areas or that there should be a rural infrastructure plan.
• Remote peninsulas are sometimes more isolated than islands and that although they do not have issues relating to ferry transport, remote areas also have additional transport costs. Isolated communities exist not only in the Highlands but also on the peripheries of the Central Belt and across the South of Scotland.
• The definition of a ‘rural settlement’ used for the purposes of the Energy Company Obligation ( ECO) scheme can act against direction of funds to the most rural areas. Since a rural settlement is considered to be one of up to 10,000 households, it was suggested to be cheaper and easier for companies to deliver measures in larger communities which may be on-gas grid. It was argued that delivery organisations should collect data to allow tracking of measures delivered to off-gas grid households.
• Expanding the gas network should be considered. It was suggested extending the gas network to new communities could bring significant financial benefits to customers as well as benefitting the environment. Potential expansion of the network to Fort William was noted.
• Involvement of communities in decision making should take particular note of the views of people living in rural areas where the majority of the population in the same local authority area lives in urban areas.

3.35. Finally, the potential of a SEEP phase 2 pathfinder project in the Borders testing a ‘whole area’ approach to improving energy efficiency was noted. This involved different house types with different geographies as well as intensive local advice and awareness raising - with advice officers on the ground and a drop-in hub.