Fuel Poverty Strategy for Scotland: consultation analysis

5. Targets and indicators

Summary of Questions 10 to 12

• Respondents often made a general statement welcoming the proposal to set a new statutory target to eradicate fuel poverty in the Warm Homes Bill.
• Some felt it is not correct to refer to eradication if the target is to reduce fuel poverty to below 10%. Others argued that the Scottish Government should be aiming to completely eradicate fuel poverty.
• Respondents sometimes made a statement welcoming or supporting the inclusion of sub-targets. Some respondents saw the sub-targets as challenging but achievable, while others felt they are not ambitious enough. There was a similar divergence of opinion on the proposed timeframes.
• Those who commented specifically on the sub targets tended to be broadly supportive.
• Although there was support for the inclusion of interim milestones, there were concerns that the levels and timeframes proposed are not, or may not be, sufficiently challenging.

5.1. The consultation paper notes that gains made in the last 10 years to address some aspects of fuel poverty have been outstripped by other factors which are beyond the Scottish Government’s control, primarily rising fuel prices, and that this will continue to be a challenge. The Warm Homes Bill is being introduced to enshrine the ambition to eradicate fuel poverty in legislation, and it is proposed that the Bill should include a new statutory target to eradicate fuel poverty.

Question 10 - What are your views on our proposal to set a new statutory target to eradicate fuel poverty in the Warm Homes Bill?

5.2. A total of 84 respondents provided an answer to Question 10. A breakdown of answers by respondent type is set out in Table 11 below.

Table 11: Number of comments by respondent type

Type of respondent	Number
Organisations:
Community or Tenant Group or Federation	4
Energy Company	5
Health and Social Care	5
Housing Association	8
Housing Body or Group	3
Inter-agency Group or Partnership	5
Local Authority	20
Other	7
Research Group	2
Third Sector	16
Organisations	75
Individuals	9
All respondents	84

5.3. Around 1 in 2 respondents who answered the question made a general statement welcoming the proposal or supporting it in principle. Around 1 in 5 respondents who answered the question identified a statutory target as being important or essential, helpful or useful, and such a target was also suggested to demonstrate Government commitment, or to provide a means to monitor progress. Other respondents also suggested targets to be important or useful but did not state clearly whether they thought targets should be statutory.

5.4. Although some respondents who supported the proposals suggested them to be realistic, ambitious, or challenging but achievable targets, others who generally supported the idea of a target expressed reservations about the targets proposed, most frequently:

• Querying use of ‘eradicate’.
• Suggesting the target – or more specifically the sub targets – lack ambition or should be more ambitious.
• Noting the factors over which the Scottish Government has little or no control, primarily the price of energy but also changes in individual circumstances and the effects of Brexit.
• Highlighting the need for adequate resources to be made available.
• Pointing to the lack of practical information in the consultation paper on how the targets will be delivered.
• Suggesting that there are particular issues for some communities, particularly those in rural and island areas that need to be addressed.

5.5. These are discussed below. A very much less common view was that a statutory target will have no meaningful effect, or is unenforceable, or may not be achievable and that it is better not to set an unachievable target.

Eradicate

5.6. Around 1 in 8 respondents who answered the question made points concerning use of the word ‘eradicate’. Some respondents thought that this is not right word if the target is actually to reduce fuel poverty to below 10%, with suggested alternatives including ‘resolve’, ‘reduce’, or minimise ‘as far as reasonably practicable’. Others argued that the Scottish Government should be aiming to completely eradicate fuel poverty or should set a date by which this will occur, or that fuel poverty should be eliminated by 2040. It was suggested that the 10% figure proposed would still leave in the region of 280,000 households experiencing fuel poverty. It was also noted that while the statutory target is to ‘eradicate’ fuel poverty, the sub-target to reduce it to 10% is not statutory.

More ambition

5.7. Around 1 in 9 respondents who answered the question suggested that the existing targets should be more ambitious, with alternative levels or timeframes proposed including:

• Eradication of extreme fuel poverty within 5 years.
• Reduction to below 5% before 2040.
• Reduction to 10% in 10 years, 5% in 15 years, and zero in 20 years.

Factors outwith Scottish Government control

5.8. Around 1 in 8 of those who answered the question observed that the Scottish Government has little control over fuel costs or suggested that, without any means of controlling energy prices, the targets may be unachievable. More generally it was suggested that the Scottish Government does not have the necessary tools available within devolved responsibilities. Similar points were also made in responses at Question 11.

5.9. A small number of respondents argued, however, that there should be an emphasis on reducing fuel costs and it was noted that one of the things the Scottish Government can do is to support affordable energy initiatives, such as district heating schemes for example.

Resources

5.10. Around 1 in 9 of those who answered the question highlighted the importance of adequate resources being made available. The types of resources referenced included funding and clearly identified budgets. It was also suggested that a sizable input would be needed, or that there need to be detailed assessments to determine the interventions that will be required to meet the targets and the costs involved, or whether the sub targets are achievable in the time identified.

Delivery

5.11. Several respondents noted that the consultation paper contains little information on how the proposed targets will actually be delivered. Elements suggested to be important included: widespread, co-ordinated action; involvement of all stakeholders; deployment of a range of measures including different approaches to those tried before; measurable targets; annual targets; and a system of monitoring and reporting that allows action to be taken if a target is likely to be missed. The need for independent review and scrutiny was also highlighted, and the consequences of a target being missed were questioned. The role of new Fuel Poverty Advisory Panel was suggested to be crucial to success.

5.12. It was argued that there should be a focus on all drivers of fuel poverty, not just improvements to the fabric of homes. The importance of lifestyle factors, and the need for education on energy conservation and reducing fuel bills were highlighted, with one respondent suggesting the importance of funding delivery organisations in person-centred outreach work with vulnerable individuals.

5.13. Although several respondents cautioned against a continued focus on energy efficiency improvements to buildings, predicted that owners/private landlords may be reluctant to invest in upgrading properties, or suggested some householders may not want internal insulation, other respondents saw further upgrading Scotland’s housing stock as being crucial to delivering the targets.

Different targets for different communities

5.14. A number of respondents made specific reference to the high levels of fuel poverty in remote, rural or island communities including drawing attention to a local target of getting fuel poverty in Orkney to the national average by 2022 and eradicating fuel poverty by 2032. Specific suggestions included:

• That the definition of fuel poverty must be adjusted to incorporate rural and island characteristics before targets are set.
• There could be specific measures – such as help to develop supply chains to remote communities.
• Targets should be broken down to allow monitoring at a local level including for remote rural, accessible rural and urban communities. Flexibility to allow local communities to work effectively was suggested to be important.

5.15. It was also asked that disparate rate of poverty among equalities groups should be taken into consideration, since certain groups are more likely to experience fuel poverty. It was suggested measurement of the targets should be broken down by relevant protected characteristic.

5.16. Other suggestions at Question 10 included that:

• The Warm Homes Bill should be the subject of a separate consultation.
• Local authorities should be given a duty to eradicate fuel poverty.
• The ‘surcharge’ of around 2p per unit paid for electricity in the Highlands and Islands should be removed.

5.17. Also within Section 5 the consultation paper sets out the Scottish Government’s proposed sub-targets which are:

• The overall fuel poverty rate will be less than 10% by 2040;
• Ensure the median household fuel poverty gap is no more than £250 (in 2015 prices before adding inflation) by 2040; and
• Remove energy efficiency as a driver for fuel poverty by ensuring all homes reach a minimum energy performance rating by 2040.

Question 11 - What are your views on the proposed sub-targets?

a) What are your views on the proposed levels?

b) What are your views on the proposed timeframe?

5.18. A total of 72 respondents provided an answer at Question 11a and 61 at Question 11b. A breakdown of answers by respondent type is set out in Table 12 below. Since respondents at 11b often referred back to 11a, and views on levels and timeframes often tended to overlap, the analysis below covers all material at Question 11.

Table 12: Number of comments by respondent type

Type of respondent	Number of comments at 11a	Number of comments at 11b
Organisations:
Community or Tenant Group or Federation	2	1
Energy Company	5	4
Health and Social Care	4	3
Housing Association	7	6
Housing Body or Group	3	2
Inter-agency Group or Partnership	5	4
Local Authority	20	16
Other	4	4
Research Group	2	2
Third Sector	13	12
Organisations	65	54
Individuals	7	7
All respondents	72	61

General comments

5.19. Around 1 in 4 respondents who answered the question made a statement welcoming or supporting the inclusion of sub-targets or noting that they approved in principle. A much smaller number specifically questioned or opposed the sub-targets, sometimes because they considered the statutory target discussed at Question 10 to be unachievable and took a similar view on the sub-targets or because of a view that the sub-targets do not help understanding of fuel poverty and risk over-reliance on statistical information. It was also suggested the sub-targets may be too ambitious or may not be achievable within current devolved responsibilities, and that both the potential impacts of the policy tools available to the Scottish Government and the minimum financial investment required to meet targets should be evaluated.

5.20. Although around 1 in 7 of those who answered the question suggested the sub-targets to be challenging, ambitious but achievable, or realistic, around 1 in 4 expressed a view that they are not ambitious enough or that they lack urgency. A small number of respondents also queried how the sub-targets and timeframes have been arrived at or why they are not being made statutory, sometimes arguing they are meaningless unless statutory.

5.21. With respect to timeframes, around 1 in 7 of respondents who answered the question stated their support or suggested the timeframe to be challenging/ambitious, reasonable, realistic or appropriate, and in line with SEEP targets. It was also suggested that long-term targets can provide stability, but also that it may be difficult to sustain momentum over such a long period and hence that the interim milestones are very important. Around 1 in 5, however, suggested that the timeframe is too long, sometimes drawing attention to the potential consequences of fuel poverty for an ageing population with increasing levels of disability, the impact on children, and that another generation will experience fuel poverty. Specific suggestions included annual targets or reporting requirements and 5-year sub targets.

5.22. Other comments on the sub-targets in general included that:

• Progress should be measured against all drivers of fuel poverty.
• Use of ‘sub-targets’ is potentially confusing and ‘indicators’ would be preferable. It was also suggested that, as drafted, these targets may not be easily understood by members of the public and that simple, non-technical language is needed.
• The targets provide a useful framework against which to measure progress and that the Strategy could provide detail on how the sub-targets will be met across all tenures.
• SMART targets for different organisations and sectors should be developed together with people who have experienced fuel poverty.
• Collection of qualitative data from people with lived experience of fuel poverty will be important to assess the effectiveness of the Strategy.
• Expressing the targets and milestones in terms of the annual rate of change or improvement would allow more regular and constant monitoring of progress.
• It would be helpful to consider how targets are aligned with other related policy goals - such as that on child poverty - and that such an approach might allow fuel poverty targets to be met more quickly.
• Time frames should be more closely aligned with to those for carbon reduction, the Climate Change Bill or the Scottish Energy Strategy.

5.23. The higher levels of fuel poverty found in remote or rural communities was noted in particular and it was argued that rural areas are less likely to meet the sub-targets. The validity of the modelling used in the consultation paper with respect to rural areas was also questioned. Suggestions included:

• Consideration should be given to setting local authority-specific or regional targets in rural or island areas.
• A targeted approach is needed to ensure rural poverty rates are not concealed within national figures.

Sub-target 1: The overall fuel poverty rate will be less than 10% by 2040

5.24. While some respondents who commented specifically on the first sub-target suggested it to be challenging but achievable others argued it should be more ambitious or observed that reducing fuel poverty to less than 10% is not the same thing as eradicating it and that this requires clarification. Respondents who suggested that the proposed level is too high sometimes argued that the 10% target would leave too many households in fuel poverty. Alternative levels and timeframes, including eradicating extreme fuel poverty as a priority, were suggested.

Sub-target 2: Ensure the median household fuel poverty gap is no more than £250 (in 2015 prices before adding inflation) by 2040

5.25. Around 1 in 7 of those who answered the question thought inclusion of sub-target 2 to be generally positive. However, it was also suggested to be inconsistent with the aim of eradicating fuel poverty by 2040.

5.26. Respondents also suggested that better explanation is required, with specific queries including:

• Why £250 has been chosen.
• Why a median rather than mean value is suggested. It was suggested both that £250 is still a large sum for a household struggling to pay heating bills and that use of median figures could mask those households needing to spend very large sums on heating.

5.27. Other points on the fuel poverty gap were limited but included that:

• The target should be to eliminate rather than reduce the fuel poverty gap with a specific suggestion that this should be achieved within 10 years.
• The fuel poverty gap tends to be greater in homes that are off-gas grid and not able to benefit from certain cheaper energy schemes. Delivery of increased energy efficiency measures to such households, generally in rural areas, was highlighted as important if the target is to be met.
• A measure of awareness and understanding of how to manage energy within a household should also be included.

Sub-target 3: Remove energy efficiency as a driver for fuel poverty by ensuring all homes reach a minimum energy performance rating by 2040.

5.28. Although around 3 in 10 of those who answered the question welcomed this sub-target, or suggested it to be ambitious, even over a long period, some thought it should be achieved sooner than 2040. It was also noted that since responsibility for housing is devolved to the Scottish Government, this area may be more important to the overall aim of eradicating fuel poverty than those where powers still sit with the UK Government.

5.29. In contrast, a small number of respondents argued that energy efficiency ratings are unreliable or misleading as a measure of fuel poverty, that this approach proved unhelpful in the previous Strategy and should not be used here.

5.30. A number of respondents noted that the minimum acceptable energy efficiency standard has yet to be defined and that this detail is needed. Amongst those respondents who gave their views on what the level should be the majority suggested the initial target should be EPC band C and sometimes that a higher band should be achieved by 2040. In terms of dates, respondents suggested that band C might be required by 2025, 2030, and 2035. It was also suggested both that very challenging targets will need to be set in the owner occupied and private rented sectors in order to meet the target, and also that the minimum level required could be tenure-specific. More detail on what the progress indicator will be was requested.

5.31. A small number of respondents expressed reservations about the EPC system, and the number of properties that may struggle to meet required standards. Specifically, it was argued that:

• The EPC rating is not a good proxy for fuel poverty since the actual thermal performance of a property depends on other factors, including lifestyle choices of the occupants.
• The EPC system needs to be made fit for purpose, including making allowance for use of energy generated from renewable energy projects, particularly in the Highlands and Islands.
• Some older properties (including the hard-to-treat) may struggle to meet the minimum standards required and that exceptions may be required, or that more expensive and difficult to install measures will need to be used in such properties.

5.32. The need for significant funding, including to the private sector, was highlighted as important if this sub-target is to be achieved. It was also suggested that setting a target will encourage investment decisions, although that, given potential technological advances, it is difficult to know what may be available in the future. Associated benefits in generating jobs were also suggested.

Other potential targets or monitoring suggestions

5.33. A small number of respondents suggested additional targets or actions including:

• There should be a sub-target relating to directing support to off-gas grid households.
• There should be additional sub-targets relating to identification of households at high risk of fuel poverty.
• Sub-targets should reflect the length of time a household has been in fuel poverty to help to understand how long term the issue of fuel poverty is for some households.
• Fuel poverty severity bands – considered by the Definition Review Panel in their recent report – should be used to measure and monitor progress.
• The impact of the Fuel Poverty Strategy on health and wellbeing, local job creation and energy security should be monitored and evaluated.

5.34. The consultation paper also sets out the Scottish Government’s proposed interim milestones to 2030 which are:

• The overall fuel poverty rate will be less than 20% by 2030;
• Ensure the median household fuel poverty gap is no more than £450 (in 2015 prices before adding inflation) by 2030; and
• Progress towards removing energy efficiency as a driver for fuel poverty by ensuring all homes reach a minimum energy performance rating.

Question 12 - What are your views on the proposed interim milestones?

a) What are your views on the proposed levels?

b) What are your views on the proposed timeframe?

5.35. A total of 66 respondents provided an answer to Question 12a and 53 at 12b. A breakdown of the frequency of answers by respondent type is set out in Table 13 below. As at Question 11, the analysis below considers all these responses together.

Table 13: Number of comments by respondent type

Type of respondent	Number of comments at 12a	Number of comments at 12b
Organisations:
Community or Tenant Group or Federation	2	1
Energy Company	4	3
Health and Social Care	3	3
Housing Association	6	6
Housing Body or Group	3	2
Inter-agency Group or Partnership	5	4
Local Authority	20	16
Other	6	2
Research Group	1	1
Third Sector	10	10
Organisations	60	48
Individuals	6	5
All respondents	66	53

General comments

5.36. Given the relationship between sub-targets and milestones, views expressed at Question 12 tended to reflect positions set out at Question 11 and some respondents simply referenced their earlier answer or restated general concerns, often with respect to the particular problems in rural and island areas or specific concerns regarding the proposed definition of fuel poverty as it applies to rural areas.

5.37. Around 1 in 3 respondents who answered the question supported inclusion of the interim milestones, with comments including that they are reasonable or realistic, useful, ambitious or challenging, or essential to ensure accountability and that attention remains focused on fuel poverty. Respondents who expressed support for the proposed timeframe, sometimes suggested it to be reasonable or sensible/manageable. A small number of respondents who, in principle, had opposed the inclusion of the sub-targets also argued against inclusion of interim milestones.

5.38. The reservations expressed about the milestones were most likely to be that the levels and timeframes proposed are not, or may not be, sufficiently challenging (in the view of around 1 in 4 respondents who answered the question) or that they represent only very modest reductions on present levels of fuel poverty.

5.39. Additional or lower milestones: Specific points made included a suggestion that there should be more interim milestones with one respondent noting that the present proposals would not require a formal assessment of progress during either this or the next Parliament. Alternative proposals included that:

• There should be additional milestones prior to 2030 or additional milestones relating to the new Advisory Panel’s reports.
• Additional milestones should be a 20% reduction year on year to 2023, and a 10% reduction year on year to 2028.
• There should be a milestone of 10% by 2030, with a reduction to below 5% by 2040.

5.40. Earlier milestones: It was also suggested that interim milestones should be brought forward: to 2025 with an end date of 2030; or that the process should be compressed to achieve eradication of fuel poverty within 15 years.

5.41. Local milestones: It was noted that levels of deprivation will vary between areas, and the rate of progress locally will be influenced by different factors. Small numbers of respondents proposed different milestones be set for different local authority areas or that, if localised sub-targets are set, then milestones should follow suit.

5.42. It was also suggested that the milestones should not be set until the overall targets have been agreed.

5.43. Other comments related to review and reporting and included that:

• Milestones should be reviewed at intervals. It was also argued that there should be a review prior to 2030 to establish whether interventions are having the desired effects and allow changes to be made if necessary. The proposed independent review of delivery in 2031 was suggested to be welcome but to be a long time wait to find out if measures are working.
• Outcomes should be reported to the Scottish Parliament on an annual basis.

Interim milestone 1: The overall fuel poverty rate will be less than 20% by 2030

5.44. Comments specifically on milestone 1 were typically that it is not ambitious enough, with around 1 in 6 of respondents who answered the question noting that the figures set out in the consultation paper suggest that only a small percentage of households would be removed from fuel poverty by 2030. This was suggested to be both too slow of itself, but also to represent insufficient progress towards the target for 2040.

5.45. A small number of respondents made specific reference to recent Scottish House Condition Survey figures reporting a reduction of 4.3% in fuel poverty between 2015 and 2016. ^[13] It was suggested that this demonstrates more ambitious targets than those defined by this milestone to be achievable.

Interim milestone 2: Ensure the median household fuel poverty gap is no more than £450 (in 2015 prices before adding inflation) by 2030

5.46. There were relatively few comments specifically relating to milestone 2. A small number of respondents expressed support although sometimes noting that they were unclear how this milestone has been set.

5.47. Respondents who disagreed with the second milestone did so either because they opposed the corresponding sub-target or because they considered that the level is neither sufficiently ambitious in itself, nor does it set the right path to reach the target set for 2040.

Interim milestone 3: Progress towards removing energy efficiency as a driver for fuel poverty by ensuring all homes reach a minimum energy performance rating

5.48. Around 1 in 6 of respondents who answered the question noted that the consultation paper lacks detail with respect to milestone 3, sometimes suggesting that this is therefore too vague or not an acceptable milestone. Suitable milestones suggested included:

• The level should be set as EPC band D or higher by 2025, in line with the minimum standard proposed for properties in the private rented sector.
• That a majority of homes should reach band C by 2025.