Draft Fuel Poverty Strategy for Scotland 2018

Introduction

As a modern, progressive and compassionate country, it is unacceptable for there to be individuals and families – many with young children – who cannot afford to pay essential energy costs. Fuel poverty can impact on any household and can arise as a result of a number of reasons, often due to factors that the household has no control over. The impact on those households living in fuel poverty, as with any form of poverty and hardship, are multifaceted and directly challenge our belief in a fair and prosperous society for all. For example, people may face adverse health impacts associated with cold, damp homes; and/or mental health stresses created by the financial pressures that they face with unaffordable and high fuel costs. This can lead to additional strains being placed on families and children who live in houses where they are unable to find a warm, well-lit place to do their homework and may, as a result, be less likely to achieve their full potential.

The Scottish Government is committed to ensuring everyone has the right to an adequate standard of living. Our work to reduce fuel poverty and improve the energy efficiency of homes across Scotland aligns with other strategies to tackle poverty, reduce child poverty, improve health outcomes and make Scotland a fairer country. It also supports our commitment to address the underlying economic and social inequalities in our society and give effect to economic and social rights which is the foundation stone for our actions in government, as set out in the International Covenant on Economic, Social and Cultural Rights.

The Scottish House Condition Survey indicates that in 2016 around 649,000 households or 26.5% of Scottish households were in fuel poverty and although this represented almost 200,000 fewer households than in 2014, it remains a challenge. We know that it can affect anyone living in any tenure of housing, in any area of Scotland; young or old; employed or unemployed.

The chart above demonstrates the long-term trend of Scottish fuel poverty levels which, until recent years, has broadly mirrored growth in the fuel price index. Recent reductions in fuel poverty levels have made a difference but it is clear that far too many households still struggle with unaffordable energy costs.

We have invested heavily in improving the energy efficiency of our housing stock. By the end of 2021 we will have allocated over £1 billion since 2009 on tackling fuel poverty and improving energy efficiency. This funding is being used to build on the over 1 million measures delivered through a range of programmes to over 1 million households since 2008.

Further detail on the action we’ve taken and requirements to report on these under the Housing (Scotland) Act 2001 are set out in Annex A.

The figures we’ve referred to so far, are based on the definition of fuel poverty set out in the first fuel poverty statement, which was published by the then Scottish Executive in 2002 under section 88 of the Housing (Scotland) Act 2001. The statement ^[1] used a definition which designated a household as being in fuel poverty if, in order to maintain a satisfactory heating regime, it would be required to spend more than 10% of its income (including Housing Benefit or Income Support for Mortgage Interest) on all household fuel use. The statement also set a target date of ensuring, so far as reasonably practicable, that people were not living in fuel poverty in Scotland by November 2016. Expert advice received in spring 2016 from the Scottish Fuel Poverty Strategic Working Group informed Ministers that the 2016 fuel poverty target would not be met and the Parliament was informed at the earliest opportunity.

In this Draft Strategy, we set out a new definition of fuel poverty that is a direct response to expert and stakeholder views that the existing definition does not focus enough on those households in greatest need. In late 2015 two independent working groups – the Scottish Fuel Poverty Strategic Working Group and Scottish Rural Fuel Poverty Task Force – were set up by Ministers to look anew at the issues and make recommendations to inform the approach to tackling fuel poverty and improving the energy efficiency of people’s homes wherever they live in Scotland. Both groups recommended a new approach to tackling fuel poverty, including: undertaking a review of the definition to ensure those most in need, no matter where they live in Scotland, were better identified which would enable better targeting of support, and setting a new target in legislation.

Scottish Ministers agreed to the two group’s high level recommendations, including commissioning an independent academic review of the fuel poverty definition. This resulted in proposals for a new definition ^[2] which we have agreed, with some minor amendments, following consultation with relevant stakeholders. This proposed new definition and a proposed target to eradicate fuel poverty was consulted on in late 2017. The consultation ^[3] set out an ambition to tackle fuel poverty by addressing the four drivers of fuel poverty (energy prices, the energy efficiency of homes, incomes, and behaviours in the home).

Principles underpinning our approach

This Draft Fuel Poverty Strategy builds on the achievements to date in tackling fuel poverty and will be firmly underpinned by the following three principles:

• It is based on the principle of social justice and creating a healthier, fairer and more equal society, irrespective of whether individuals live in urban or rural Scotland, placing people and their needs at the heart of our approach to service design and delivery;
• It addresses all four drivers of fuel poverty: income (earnings and benefits), energy costs, poor energy efficiency, and how energy is used in the home; and
• It sets out a statutory target relating to the eradication of fuel poverty, measured and overseen by Ministers and delivered via partnership structures at a local level. Building on the assets of individuals and communities will be at the heart of this partnership and early intervention and prevention will be crucial to success.

These principles are aligned with those set out by the two expert fuel poverty working groups who undertook a review of our approach in 2016.