Energy Efficient Scotland programme: analysis of delivery mechanism

This role addresses the need to increase the resources and technical expertise available to Local Authorities and to ensure Local Authorities have the ability to deliver and implement LHEES successfully and in a timely manner. It also addresses the need to improve the consistency and availability of data for all users, and share best practices and lessons learned. Provision of technical support has been raised as key by the public bodies currently engaged with the Scottish Government.

A. Help to build capacity in local authority resources to enable them to carry out any the responsibilities arising from the EES Programme.

B. Provide technical, commercial and legal support and expertise to Local Authorities to help with LHEES development and implementation of the associated low carbon heat and energy efficiency projects.

C. Set standards, review, provide feedback, and ultimately approve (or make recommendations for approval of) all LHEESs, ensuring the aggregation of all strategies will result in the required level of support to meeting national-level targets.

D. Identify and fill gaps in the data required in the development of robust LHEES and their constituent low carbon heat and energy efficiency projects by working with partners who hold relevant data.

E. Provide a guidance and ‘sign-posting’ service to Local Authorities and project sponsors for data required in LHEES and low carbon heat and energy efficiency projects.

F. Disseminate lessons learned and best practice on relevant data and its use with all relevant stakeholders.

Tasks 1A and 1B could be implemented at a national or local level. Tasks 1C-1F, which are services to Local Authorities, would need be delivered at a national level.

This role addresses the need to assess and remove barriers to progress from existing regulation, ensure all buildings comply with minimum standards set by Scottish Government and make sure LHEES are delivered in a timely manner.

A. Monitor local authority progress towards developing and implementing LHEES, inspect projects on the ground and, if necessary, enforce delivery in a timely manner.

B. Provide support for Local Authorities to enforce homeowners, landlords and businesses to comply with minimum standards.

C. Identify barriers to progression of low carbon heat and energy efficiency projects caused by existing legislation and planning requirements. Investigate potential for removing barriers and drive change.

Tasks 2A and 2B are only applicable to delivery at a national level. Task 2C could be done at local or national level, but the national approach would create opportunities for greater efficiency and effectiveness by drawing together experience from across Scotland.

This role addresses the need to build trust in the EES brand by delivering high quality products and services, providing consistent quality assurance and customer protection standards and processes, and having an oversight of supplier performance. Ultimately, this will contribute towards increased consumer engagement.

A. Maintain a robust quality assurance framework, with clear criteria for the supply chain on what is expected in terms of advice, products and services relating to the EES programme.

B. Provide a central, consistent customer protection advice and redress service for all advice, products and services under the EES programme.

C. Maintain an overview of the performance of suppliers including advice, products and services within the EES programme and take action in instances of poor performance.

D. Carry-out visits and spot-checks to monitor standards of works against national EES KPIs.

E. Carry out vetting of suppliers and ensure they meet the QA criteria.

F. Oversee use of the quality mark i.e. ensure only those suppliers who meet criteria are able to use it.

Task 3A would need be delivered at a national level, whereas tasks 3B-3D could be delivered at either a national level or a local level, or possibly both. For all of these roles, there would be a need for data sharing on a national basis.

This role addresses the need to track progress towards EES targets, by monitoring activity and outcomes at a local level and aggregating progress to report against national level targets. This includes the requirement to assess and record which buildings are exempt from full EES targets, and the need to separate out the drivers of fuel poverty to assess the contribution of energy efficiency improvements.

A. Provide a clear monitoring framework and support for Local Authorities to monitor progress against their LHEES targets.

B. Create a fuel poverty monitoring methodology which determines the relative impacts of different factors on the prevalence of fuel poverty.

C. Provide clear guidance for Local Authorities to identify buildings for exemption from EES targets owing to technical or economic feasibility and maintain an overview of the building stock this will apply to.

D. Aggregate local-level progress reports to report on national-level progress against EES targets.

E. Identify underperforming areas and/or programme failures and suggest corrective action for LHEES and the EES programme as a whole to Local Authorities and the Scottish Government respectively.

All tasks within this role could only be delivered at a national level.

This role addresses the need to increase collaboration between all 32 Local Authorities, and facilitate partnerships between stakeholders. This will also help support the need to increase consumer awareness and uptake of levers.

A. Provide a central advice and signposting service, with an overview of all existing levers and ongoing schemes, for all parties involved in EES, including consumers, the supply chain and developers.

B. Facilitate coordination and provide mediation between different parties, including Local Authorities, the supply chain, district heating developers, and possible industrial anchor loads.

C. Maintain an overview of all local authority LHEESs and proposed low carbon heat and energy efficiency projects, and identify, facilitate and encourage opportunities for collaboration between Local Authorities.

All tasks involved in this role would need to be delivered at national level.

Role

Summary

Tasks

Role 6: Provide a national-scale marketing, communication and education service

This role addresses the need to raise awareness and uptake of available schemes to increase the number of improvements made both above minimum standards and ahead of deadlines, increase homeowner engagement and facilitate innovation by encouraging a move away from standards, lower-cost measures. It also meets the need to create greater competition for public sector contracts and encourage SMEs to invest in their capacity.

A. Develop a strong brand for EES across all relevant sectors.

B. Conduct targeted marketing campaigns to promote and raise awareness of relevant levers and funding support for homeowners, landlords and businesses.

C. Inform stakeholders of minimum standards and other requirements well ahead of deadlines and provide information and guidance on how to meet them.

D. Educate homeowners and tenants on the benefits of making energy efficiency improvements and how to maximise the benefits.

E. Educate consumers on how to evaluate value for money using an appropriate price-quality ratio, and ensure public-sector tenders encourage and value innovative solutions.

F. Promote public sector contracts and opportunities for the supply chain.

All tasks within the role could be delivered at either a local or national level, or a combination of both.

Role 7: Maintain an overview of funding availability and allocations

This role addresses the need to increase the opportunity to implement holistic, whole-house improvements, reduce gaps between modelled and observed performance improvements, facilitate improvements in difficult-to-treat building typologies and minimise the potential for unintended consequences. It also supports the requirement to escalate funding available to levers tackling fuel poverty.

A. Perform periodic analysis on the cost and barriers to delivery of low carbon heat and energy efficiency projects, and on the impact of public funding and financing programmes.

B. Provide advice to funding schemes to improve their reach, take-up and effectiveness by, for example, matching funding timescales to realistic time lines for project stages.

All tasks within this role could only be delivered at a national level.

Role 8: Facilitate access to project funding and finance

This role addresses the need to increase the flow of finance to accelerate implementation of low carbon heat and energy efficiency projects. The role also addresses the need to give confidence to supply chains to invest in capacity in Scotland.

A. Maintain an overview of financial cash flows, including when loaned funding is expected to be recycled and optimise the allocation of funding between Local Authorities.

B. Provide national level assistance to attract private investment to EES projects to help to fill gaps in funding.

All tasks within this role could only be delivered at a national level.

This role addresses the need to encourage, support and facilitate investment and capacity expansion within the Scottish energy efficiency and low carbon market supply chain, including through encouraging SMEs to apply for large public-sector contracts.

A. Facilitate and create opportunities for conversations between consumers and the supply chains to provide the supply chain with a clear picture of future demand. Should look to align this with current market engagement that Energy and SPCD are undertaking.

B. Input and assist in the use of Public Contracts Scotland (PCS), to ensure advertising of all supply chain opportunities under the EES banner. Where required, assist in creation of local level procurement support.

C. Escalate services to provide guidance and training to SMEs for making applications to public sector contracts.

D. Provide additional training courses and workforce upskilling opportunities to increase the pool of talent available to the supply chain to facilitate expansion.

Task 9B would need to be delivered at a national level, whilst tasks 9A, 9C and 9D could feasibly be delivered at either a national or local level, while there could also be a national element, where training isn't available locally, where procurement is done as part of a national / regional process.

This role addresses the need for tailored data infrastructure, to allow the secure and efficient sharing of data between Local Authorities, Scottish Government and the delivery architecture accountable for delivery of EES.

A. Develop and implement data services and infrastructure for the secure collation and storage of Local Authority data on the implementation of EES.

B. Provide on demand access to data sources required for the continuous monitoring and assessment of progress on a national level.

All tasks within this role could only be delivered at a national level.

• The relationship with Local Authorities means that LHEES overview and coordination services could only be provided by a national level body.
• As a national requirement, LHEES support role would be most effective through a single focal point for Local Authority engagement.
• Greater consistency of advice and the approach taken by Local Authorities.
• Reduced burden for developers with consistent national processes and requirements.
• Consistency and quality of support for Local Authorities will help make LHEESs more implementable.
• Proven LHEES measures can be shared more rapidly and scaled through adoption.
• A national overview and sharing of best practice and ‘what works’.
• Support for collaboration on cross local authority issues and opportunities, including the potential for cost reductions on shared procurement and the ability to develop larger, joint projects.
• Potential for economies of scale of some local authority activities e.g. advice services are aggregated at a national level.
• An NDM could provide tailored support to Local Authorities according to need.

• Lack of local authority capacity and leadership may undermine the value of a support service.
• Local Authorities may view support as a loss of autonomy over LHEES.
• A national level advice may not account well enough for variations in the specific local challenges and approaches required, or for the differing levels of readiness/resourcing among Local Authorities.
• ZWS and SFT already provide support to Local Authorities with LHEES developments. This could be a starting point for an NDM, or a potential for overlap / confusion of roles.
• Given the diversity of zones and challenges inherent in various building tenures and typologies, there is uncertainty around the early stages of the LHEES role, beyond strategy.
• There is uncertainty around the variation and changes in the functions required to implement the different phases of LHEES.

• Budget, resources and powers allocated to new body.
• Budget and resources allocated to Local Authorities (in relation to LHEES activities).
• No formal guidance, checking and enforcement framework yet in place to ensure quality of LHEES.
• The projects and phases outlined within LHEES frameworks will determine the support required.
• The interaction between LHEES and the role of existing national levers.
• Overlaps with SEPA regarding the overall impact on the natural environment.

• Greater ability to ensure existing and new regulation is aligned with core priorities of EES for both domestic and non-domestic sectors.
• Better consistency in application and enforcement of minimum standards and best practices.
• Increased accountability of Local Authorities to ensure full strategies are delivered.

• A national level enforcement agency would be less identifiable and trusted by customers in a local level. It will be important to build off existing local networks.
• Risks overcomplicating the flows of information given that Local Authorities and national government already share data.

• Budget, resources and powers allocated to new body.
• Overlap with SHR, which already regulates and monitors social rented sector.
• Lack of regulation currently across building tenure typologies and tenures to support

• Reduction in restrictions for stakeholders to access funding and participate in EES and LHEES programmes.
• Not applicable to delivery at a local level, however national level delivery of training and support available to enable delivery locally.
• Stakeholders reporting compliance to one national body.
• Facilitates sharing of best practice around enforcement between Local Authorities.
• Standardised reporting of enforcement carried out at local level (economies of scale at national level).
• Early identification of local resourcing shortages.

• Risk of lack of local flexibility in enforcement capability at a national level.

Local Authorities in implementing strategies.

• Requirement for appropriate delegated/devolved powers for delivery to conduct enforcement.
• No regulatory enforcement framework to support Local Authorities in implementing strategies.

• Single point of contact for interaction with industry in development of guidelines.
• Alignment of supply chain awareness over requirements and customer expectations.
• Consistency in quality of services, advice and products for EES across Scotland.
• Greater trust in the EES brand and increased likelihood of consumers engaging in the EES Programme.
• Single delivery mechanism well placed to raise awareness of standards and processes over time.
• Scope for standardised consumer protection processes which offer economies of scale.

• Damaging the brand through bad consumer experiences
• Difficult to establish link with improved delivery of EES strategies and projects.
• Risk of confusion due to overlap with numerous organisations, quality guarantee schemes and ombudsman organisations currently providing a customer protection service.
• Uncertainty around how frequently consumer protection processes will be required.
• Uncertainty around the extent to which consumers are protected by existing protections.

• Budget and resource allocated to new body.
• Degree to which consumer protection is required will depend on awareness and supplier adherence to standards.

• Ongoing understanding of progress against targets, allowing informed intervention to prevent programme failure.
• Scale and frequency of reporting required creates potential for economies of scale which an NDM could exploit.
• Identification of underperforming areas and adaption of EES

• A delivery mechanism must support and supplement existing reporting structures at a local level rather than duplicate them.
• It is unclear what the reporting requirements will be at this stage.

• Budget and resource allocated to new body.
• Regularity of national level progress reports dependent on regular ground work monitoring by Local Authorities.

• Programme and strategies to combat these.
• NDM can work with Local Authorities to reduce monitoring burden through streamlined processes.
• NDM can benchmark and guide Local Authorities on compliance with reporting requirements.

• Not clear how reporting around EES will coordinate with central Government reporting (at Scottish and UK level) around carbon reduction and fuel poverty.
• Benefit of reports to delivering EES programme may be limited.

• Local Authorities must have the resource to monitor at local level to feed into NDM monitoring of overall picture.

• NDM provides single, identifiable focal point for all stakeholders.
• Data management type tasks sit best outside central government on a day to day basis.
• NDM can raise awareness of its role over time.
• Greater consistency in data availability for users.
• Identification of data gaps and inconsistencies that can be addressed.

• None identified.

• GDPR and data security need to be designed in.
• Data viewing and editing permissions need to be appropriately managed and restricted.
• Cost of operating a central data management and distribution service.
• Accurate data collection is dependent on inputs received from others.

• Delivery mechanism provides a clear starting point for all stakeholder to obtain advice and direction towards the most appropriate schemes.
• NDM can address barriers to delivery of project that cut across local authority lines.
• Given scale of energy efficiency roll out required, scale of advice/coordination service is potentially large- NDM can take advantage of economies of scale in delivering this.
• Strong, trusted NDM brand will be best means of driving awareness.

• Changes to branding could undermine established value or the retention of existing brands inhibits a perception of an integrated approach.
• Lack of local authority "buy-in" and time taken to develop relationships to support development.
• Risk of overlaps with HES and RES services, creating a more confused delivery landscape.
• EES route map indicates that Local Authorities could become more involved in advice provision, but scope is unclear at this stage.
• Scale of advice service required is unclear at this stage.

• HES already provide this service for domestic sector.
• Similar service provided by RES for SMEs/communities.

In order to increase public awareness and buy in marketing will need to be on a large scale with multiple iterations. A single delivery body can exploit potential economies of scale here and can build up experience and expertise about what works best.

• A single national body allows for the creation of a strong brand, driving increased engagement in the programme, particularly from homeowners.

• A “marketing and communication push” is only for a short and not sustained period.
• HES provide marketing campaigns for domestic consumers, creating the risk of confusion and overlap.
• Marketing provided by existing or new schemes out of EES remit may create confusion.

• Budget and resource allocated to provision of service.
• Nature of communications will vary according to state of the programme.
• Overlaps with marketing campaigns by HES and individual scheme providers.

Provides a strong brand which investors can identify with and trust.

• A single national body is well placed to have visibility across the various funding schemes.
• Given its other functions, a single delivery body is well placed to provide investors with confidence in the long term robustness of the energy efficiency pipeline.

• If there is no control over funding terms then funding uptake may be limited.
• If there is no influence over policy then private investment may be limited.
• If a fund management role is taken on this will create a significant administrative and regulatory burden.

• Flexibility of funding and extent to which a new mechanism can influence this depends on the relationship with the organisation holding the purse strings.

• Delivery Mechanism creates single focal point to bring together consumers and supply chain.
• Delivery Mechanism well placed to use PCS portal at minimum cost.
• Single point of contact to work across existing procurement governance structures including; Scottish Procurement, Scotland Excel, National Procurement NHSS and APUC.
• Training activities are replicable/repeatable, and can be rolled out at scale (and improved) by an NDM.
• Consistent national standards of training and guidance provided to the supply chain.
• A focal point, positioned to encourage SMEs to participate in procurement process for multiple Local Authorities.

• There are already organisations providing training and upskilling, meaning the landscape could become increasingly complex.
• There is uncertainty around the scale of demand for training services, which may vary over the course of the EES Programme.

• Overlap with education and training services available for SMEs through RES.
• Even an enlarged supply chain is unable to support roll out of all LHEES in accordance with required timescales.

• Delivery Mechanism able to create single focal point for gathering of required data.
• Delivery Mechanism well placed to review and compare the quality of data submissions from all local level data sets.
• A single body able to effectively assess what data quality and format is required for use as a monitoring tool, able to escalate and ensure data submissions robust.
• Delivery Mechanism well placed to use PCS portal at a reasonable cost.

• Risk of handling and storage public data, particularly data on consumers which could be considered sensitive, such as on vulnerability factors.
• Significant data security risk holding data.
• Risk that body is unable to adequately configure data sharing framework due to data sensitivities.

• Risk of legislate and data regulations blocking the ready access and sharing of required data.
• Risk that Local Authorities and other partners are unable submit the required data.

• By definition support to all Local Authorities in developing LHEES must be provided at a national level.
• A single national body provided consistency of support to all Local Authorities and an effective means of sharing best practice.
• There is potential for economies of scale in some guidance activities, e.g. if customer advices services are aggregated are aggregated level.
• There is potential for overlap with existing advice roles e.g. ZWS, which will need to be managed.

• A single national body can ensure greater consistence in application and enforcement of standards.
• It creates efficiencies because reporting from individual local bodies is to a single body and can be standardised.
• The national perspective provides early identification of local resourcing issues.
• It will be crucial to work with Local Authorities’ existing local networks given residents’ greater familiarity with them.

• Single national body provides consistency and a single point of contact for industry.
• The delivery mechanism will be well placed to raise awareness of standards of process over time.
• There is a risk of confusion due to overlap with existing quality guarantee schemes.
• This is an area where failure could contaminate the whole EES brand.

• A single national body is best placed to monitor and understand progress against Scotland’s target.
• It can quickly identify underperforming areas of the programme.
• The likely scale and frequency of reporting required will create potentials for economies of scale which a single body can exploit.
• Care will need to be taken that local processes are supported and not duplicated.

• Single body provides an identifiable focal point and greater consistency and quality of data.
• There is a heavily IT dependent role of the type which best sits outside central government.

• Single national body by definition offers a focal point.
• Care will be needed to manage overlaps with existing HES and RES services.

• A strong brand and identity such as a single national body can provide, is crucial to driving awareness and buy in.
• There is likely to be a high volume of communication at various points in the programme this offers scope for significant economies of scale which a NDM can unlock.
• Care will need to be taken to avoid confusion with existing publicity campaigns.

• A single delivery body provides visibility for investors around the project pipeline.
• Taking on a significant fund management role would create significant regulatory burden.

• A national delivery body would creating a single focal point driving consistency in standards.
• Provision of training is repeatable/replicable meaning there are economies to be exploited.
• Care will need to be taken to manage overlap with existing training bodies and existing procurement governance structures.