Energy Efficient Scotland: partial business and regulatory impact assessment

8. Enforcement, sanctions and monitoring

8.1 Long-term domestic standard

Work is ongoing on the development of enforcement, sanctions and monitoring of the long-term domestic standard.

We propose that the long-term domestic standard is made mandatory across all tenures over time, subject to a review of progress, and so there will need to be processes in place to monitor and enforce the standard across the sectors. With the proposal that the standard be set with reference to the EPC rating, there is the opportunity to make use of existing EPC processes to prove compliance and monitor improvements to properties over time.

The consultation in the summer of 2017 proposed that local authorities may be the appropriate body for enforcing the minimum standards in the Private Rented Sector, given their existing role in this sector, although it was noted that there would be resource implications to this. Future consultation on the detail of how mandatory action would work in the owner occupier sector will include proposals on where responsibility for enforcement would sit. The position in the social sector is discussed below.

8.2 EESSH2

Enforcing and monitoring EESSH2 will fall to the Scottish Housing Regulator ( SHR), the independent regulator of social landlords in Scotland. Generally, data requirements are likely to be in line with what landlords already provide in their annual returns. A risk-based and proportionate approach will be exercised and the SHR will use the data submitted by landlords to assess risk and decide on any regulatory engagement.

8.3 LHEES & District Heating

In the context of our proposals for LHEES and regulation of district and communal heating, and based upon the analysis of stakeholder views so far, we currently see the development of enforcement, sanctions and monitoring to sit within our proposals around licencing and concessions and consents.

We have proposed that licences could be issued and monitored nationally, in line with regulatory provisions which would be set out by the Scottish Ministers. The national licensing function could be exercised by an existing body, or as part of a wider national governance framework for the Programme.

We intend to continue to explore (initially through the analysis of the responses to our second consultation on LHEES and the regulation of district heating) the precise purpose of any national licensing body. This may for example include being an economic regulator, acting in the interest of customers, and potential customers, reducing emissions and fuel poverty objectives.

Also, in order to further strengthen local authorities’ existing powers, within and beyond the planning system, and to encourage local authorities to also use their existing powers to procure concessions or award contracts for district heating, we are proposing to introduce a new district heating consent system, which would be managed and enforced by the local authority. Local authorities would be given a new statutory power to award this consent, subject to the applicant meeting certain requirements set by the Scottish Ministers. This would ensure that district heating development was subject to a similar consenting regime as that for other energy utilities, such as under the Electricity Act 1989 consents process, though with different requirements and thresholds.

The Scottish Ministers would develop national guidance for applicants seeking district heating consent and for local authorities who would be responsible for assessing applications and issuing consents. This guidance would include expected timescales for decisions, and may also include thresholds to which the consenting regime applied and details of any appeals process which might be appropriate.

As regards sanctions, we envisage that licences would be issued by a national body, with conditions to ensure that the licence holder reports appropriately and their sites meet national standards and any other appropriate performance standards (including, if necessary, penalties for non-compliance). In the event of significant breach of licence conditions the regulator would ultimately have the power to revoke the licence, as is the case with other utilities.