Energy Efficient Scotland: consultation on further development of the programme

Part 4 – Supply Chain

Impact on Supply chain: skills and capacity

The Programme's long-term ambition for improving the energy efficiency of Scotland's buildings, and the significant estimated investment of £10 - £12 billion over its lifetime, presents a significant economic opportunity. It is therefore crucial that local suppliers, particularly small and medium enterprises (SMEs) and micro-sized businesses, are able to participate in the programme to ensure that benefits are realised in communities across Scotland. This is particularly important as a recent reports on local skills needs for Scotland in construction^[13] identify potential regional skills and capacity gaps.

To develop a set of actions to achieve and fully implement a robust quality assurance (QA) framework for Energy Efficient Scotland that reflected the needs and views of the Scottish supply chain, an industry-led Short Life Working Group (SLWG) was set up including representatives from across industry, consumer organisations and enterprise and skills agencies. The Group met throughout 2018 and considered quality, skills and capacity, consumer protection, the non-domestic sector and procurement.

Overall, the Group felt that there was a need for robust quality assurance criteria under Energy Efficient Scotland which would require close inspection and the imposition of sanctions on suppliers who failed to meet the criteria. They also felt that the Programme should be based around the skill and competence of the operatives undertaking the work and that the protection of consumers should underpin every element of the Programme. At the same time, they agreed that the requirements should not place a high cost or administrative burden on suppliers especially SMEs and micro-businesses and that the economic opportunities presented by

the Programme should be accessible to all suppliers regardless of size or location.

The SLWG also identified a number of challenges and opportunities relating to the mobilisation of the Scottish supply chain:

• Industry engagement – we need industry buy-in and confidence in the Programme. We have already established that Energy Efficient Scotland is a long-term programme with a significant financial investment but we need to ensure that industry is enabled to build capacity within the supply chain. It is therefore crucial that the Scottish Government continues to engage with industry.
• Customer care – to ensure robust consumer protection, it is important that the supply chain has the customer care skills required to operate within a householders' personal space. We are committed to ensuring robust consumer protection across the Programme.
• Technical skills and capacity – it is important to identify any gaps in skills and training to make sure that the supply chain is competent and appropriately-trained to deliver the aims of the Programme. There is work underway (which originated in this SLWG) by the Energy Skills Partnership to develop a skills and training matrix which will identify gaps and develop new training opportunities in collaboration with Scotland's colleges to address these.

All of these will take time and they build upon the challenges and opportunities already mentioned in Part 2, 'quality and supply chain considerations'.

Overall, the Group made 19 recommendations for Energy Efficient Scotland and their report was published on 26^th March 2019. A summary of the recommendations can be found below. However, for more background on each of these please refer to the final report which can be found at http://www.gov.scot/ISBN/9781787816961

Quality

Recommendation 1. There should be Quality Assurance criteria developed which detail the key mandatory requirements for suppliers wishing to participate in Energy Efficient Scotland.

Recommendation 2. There should be a Quality Mark for Energy Efficient Scotland and suppliers wishing to take part in the Programme will have to demonstrate that they meet all of the requirements (set out in Recommendation 1) through a robust vetting and verification process to achieve the Quality Mark. All approved suppliers should be listed on a publicly available directory and where possible the use of operative ID cards should be considered.

Recommendation 3. The verification process must not place an undue administrative or financial burden on SMEs, particularly micro-businesses.

Recommendation 4. Define what success looks like in terms of quality for the building, consumer and funder, and set specifications for the final output of work.

Recommendation 5. A new designer role should be considered to ensure that that a whole building approach is taken and that only the most appropriate improvements are applied in practice.

Recommendation 6. Independent inspections of installations must be carried out as part of Energy Efficient Scotland to ensure quality standards are being consistently met.

Skills & capacity

Recommendation 7. Suppliers carrying out installs under Energy Efficient Scotland must meet appropriate skills and competencies. A skills and qualifications matrix should be developed and clearly communicated to the supply chain to reflect this.

Recommendation 8. The skills and competency requirements of the designer role should be determined and an analysis of current capacity within the workforce should be undertaken.

Recommendation 9. A mobilisation plan for developing skills for the supply chain should be published to help provide pipeline security and build capacity.

Recommendation 10. Energy Efficient Scotland should be well advertised to the supply chain via roadshows, events, webinars and trade publications.

Recommendation 11. Investment in Energy Efficient Scotland must support inclusive economic growth

Consumer Protection

Recommendation 12. There should be a clear, simple and well-defined complaints process with support available for the consumer to navigate the process.

Recommendation 13. There should be data sharing between key agencies in Scotland to monitor the frequency and nature of complaints, and identify and deal with non-compliant and rogue companies promptly.

Recommendation 14. Consumers and suppliers should be encouraged or required to enter into a contractual agreement outlining the responsibility of the supplier completing any of the retrofit stages.

Recommendation 15. A campaign of awareness raising about Energy Efficient Scotland and energy efficiency retrofit in general should be undertaken during the transition period and beyond.

Recommendation 16. There should be support and advice for consumers on guarantees and warranties.

Quality Assurance Short Life Working Group Recommendations Report

Non-domestic sector

Recommendation 17. Work to identify improvement targets for non-domestic buildings should be fed into ongoing supply chain activity.

Recommendation 18. Examine whether there is a need for a qualification for individuals completing installation work on non-domestic buildings under Energy Efficient Scotland.

Procurement

Recommendation 19. Procurement relating to Energy Efficient Scotland should comply with existing supplier-friendly public procurement policies and legislation, with a particular focus on micro-sized businesses. Scottish Government should continue work with partner organisations to bolster existing guidance to SMEs and where necessary produce programme specific guidance for Local Authorities and COSLA on procurement under Energy Efficient Scotland.

Next steps

We are considering these recommendations in the context of the development of other key elements of the Programme including assessment and delivery and work that is already underway across the Scottish Government. We will therefore revisit all of the recommendations in due course and will formally respond following this consultation. We also want to engage more widely on the Group's findings and have therefore set out a number of questions below.

Consultation Questions

Considering the recommendations made by the Quality Assurance Short Life Working Group:

10. The Short Life Working Group have made recommendations which they believe represent the actions required to ensure that Energy Efficient Scotland will achieve consistently high levels of quality, health and safety and consumer protection. Do you agree? If not, what more or less should be done?

11. Do you have any views on how this can be achieved whilst at the same time ensuring maximum participation from suppliers across Scotland regardless of their size and geographical location?

12. What do you think the role of Scottish Government should be in ensuring the quality criteria are consistently met?