Fuel Poverty: Scottish Government response to working group reports

Vision p21: The Scottish Government should place the new fuel poverty strategy firmly within the government's plans to tackle poverty and inequalities

Vision p23: The Scottish Government should involve people who are experiencing fuel poverty in the development of the new fuel poverty strategy, and in its delivery and evaluation. The experience of the Poverty Truth Commission would be useful in this respect.

Collaborative partnerships p56: Local partnerships that are focused on improving wellbeing should be developed and resourced to take a lead responsibility for ensuring the eradication of fuel poverty in their areas. They should be coordinated through Community Planning Partnerships and work with national services, such as Home Energy Scotland, as required. Funding for prevention and early intervention should be ring-fenced to support this approach.

Collaborative partnerships p58: The Scottish Government should work with local government, NHS and other agencies to take a more radical and innovative approach to data sharing to identify the fuel poor and those at risk of fuel poverty in order to trigger fuel poverty assessments.

Collaborative partnerships p59: Partnership work at the operational level should be supported by strategic leadership, co-ordinated across portfolios, in central and local governments and be given recognition in the National Performance Framework.

Governance p66: A review of the current fuel poverty definition is required and warranted due to concerns that the current definition is too broad and impedes targeting on those most in need.

Governance p68: A new definition should focus on the desired outcome - affordable and attainable warmth and energy use that supports health and wellbeing; acknowledge fuel poverty as a manifestation of poverty and inequalities in society; and be easy to understand and measure.

Governance p69: The Scottish Government should commission a review by independent, academic experts as soon as possible with a clearly defined timetable for completion. The Fuel Poverty Forum should give input to the final research brief and drafts of the review documents.

Governance p70: The review process should result in a new definition and target with a statutory basis. The Scottish Government should provide for transitional arrangements using the current definition while the review of the definition is underway, so as not to delay progress on helping the fuel poor.

Scottish Government ( SG)'s new strategic approach to tackling fuel poverty should be based on ensuring that its fuel poverty/affordable warmth policy opportunities will not, in practice, be constrained by geography but will be delivered equitably and consistently throughout the whole of Scotland.

SG should make vulnerable households their top fuel poverty/affordable warmth policy priority and ensure that their programmes actually reach them all, wherever they happen to live, and deliver verifiable improvements to their lives.

SG and Ofgem to consider NICE March 2015 Guidelines on excess winter deaths and illness and the health risks associated with cold homes with a view to expanding and improving the rural dimensions to existing definitions of at risk groups and sectors of society which are defined as 'vulnerable.'

SG to "rural-proof" all of its fuel poverty programme to ensure that they both prioritise and, in practice, reach all vulnerable clients especially those living in off-gas, rural areas.

Incomes p24: National and local governments should enhance existing efforts to maximise benefits through working with a wider range of local partners who understand the challenges of applying for benefits and the stigma of self-identifying as "poor".

Incomes p25: The Scottish Government should review devolved welfare and social security policies to ensure they are aligned with fuel poverty eradication and make recommendations to the UK Government to do the same with reserved welfare policies.

Incomes p26: The National Infrastructure Priority on energy efficiency and its cornerstone programme, Scotland's Energy Efficiency Programme, should be designed to maximise economic and social benefits for local communities with appropriate targets set for the creation of training places and job opportunities for local people.

Incomes p27: Support for local community energy projects, in particular the Community and Renewable Energy Scheme ( CARES), and the Local Energy Challenge Fund, should be continued and extended.

Energy costs p30: The Scottish Government should explore potential solutions to support people on low incomes to afford sufficient energy for healthy living through their new social security powers.

Energy costs p31: Routine assessment of need for additional fuel poverty support should apply to all recipients of Winter Fuel Payments and Cold Weather Payments.

Energy costs p31: The Scottish Government should review the delivery of the Winter Fuel Payment and consider the pros and cons of potential changes to its eligibility, how it is paid and what it is used for.

Energy costs p32: The Scottish Government should maintain the Cold Weather Payment with minor changes including: take account of exposure to wind and damp; link payments to the fuel poverty programme, and make the payment a discount off bills rather than a cash payment.

UK Govt and SG to recognise that implementing policies which reduce rural fuel poverty also increase rural disposable incomes, prosperity and stimulate additional economic activity and job creation, thus delivering solid, rural economy and community development benefits that cover several of Scotland's National Outcomes.

SG and BEIS to ensure all affordable warmth/fuel poverty funding programmes for rural areas should have a minimum contracted life cycle of
5 years in order to encourage and enable smaller local contractors to invest in the training and accreditation required to deliver the outcomes and, thereby, to maximise the local economic benefits to be derived from the public investment made and, in the process, as well as up-skill the local labour force and help population retention.

SG to develop criteria by which they can ensure their new powers over Social Security, Winter Fuel and Cold Weather Payments prioritise householders in greatest fuel poverty / affordable warmth need and take full account of the locality effects of cold, wind and rain.

Incomes p27: The Scottish Government should include fuel poverty alleviation as a central objective in the new Scottish Energy Policy, working to create affordable and secure energy supplies through the development of local energy systems, creating and sustaining local jobs and businesses.

Energy costs p29: The new fuel poverty strategy should include direct support to the fuel poor, or those at risk of fuel poverty, on managing their energy, switching to the best tariff, ensuring correct billing, and debt relief.

Energy costs p30: The Scottish Government should work with Ofgem and the energy suppliers to ensure the Competition and Markets Authority remedies on metering are implemented without delay, and their impact in Scotland monitored and evaluated accordingly.

Energy costs p33: The Scottish Government should use the newly devolved powers in relation to the Warm Home Discount to better target support on those most in need and improve efficiency of delivery.

Energy costs p33: The Scottish Government should maintain the Warm Home Discount Industry initiatives, with parameters amended to enable innovation and complement SEEP and the fuel poverty programme.

Energy costs p34. In the longer term, the Scottish Government should work with the UK Government to explore the possibility of an alternative approach to the current "universal price plus rebates‟ system to "Customer Differentiated Pricing" ( CDP).

Energy costs p35: The Scottish Government should identify specific measures to support customers in rural and off-gas grid areas who suffer from higher energy prices than the rest of Scotland.

Energy costs p35. The Scottish Government should use existing and new powers and work with Ofgem, energy suppliers and network operators and their respective industry bodies to explore the full scope of what can be done to alleviate fuel poverty.

Energy costs p37: The Scottish Government should use every opportunity to influence the UK Government and work with Ofgem to ensure regulation of the GB energy market addresses fuel poverty.

Energy costs p37: The Scottish Government should work with energy suppliers, energy advice networks, and the UK Government to explore best use of smart meter energy data to reduce fuel poverty while ensuring consumer protection.

Energy costs p38: The Scottish Government should support development of more choices of affordable energy supplies and work with local authority partners to set realistic and ambitious targets for every local authority area in this regard.

Energy costs p39: Scottish Government should work with the UK Government and Ofgem to remove or overcome barriers to community energy including access to finance, capacity building, grid constraints, complex licensing requirements, upgrades to transmissions systems and priority for connections

Energy costs p40: Ofgem should include fuel poverty alleviation as a criterion for innovation funding for network operators, ensure adequate take-up in Scotland, and consider applications for wider partnerships of stakeholders.

The Task Force supports the remedy proposed made by the Competitions and Marketing Authority ( Summary of AECs and remedies report, June 2016, para 20.24, h) namely that "….electricity suppliers of more than 50,000 customers be required to make all their single rate electricity tariffs available to all customers on restricted meters" … and (unconditional) upon the replacement of their existing meter." And wants Ofgem to closely facilitate the delivery of this outcome through appropriate guidance and regulation.

The Task Force recommends that suppliers with customers on restricted meters launch a proactive engagement campaign, targeting Priority Service Register customers in the first instance, to guide them through a thorough assessment of their heating needs and ensure that they are transferred without delay to the cheapest and otherwise most appropriate deal for their needs.

The Task Force also supports the CMA's two-year transitional price-capping remedy in the CMA report to remove the particular pricing disadvantages experienced by prepayment customers. ( Summary of AECs and remedies report, June 2016, para 20.25 a)

The Task Force recommends that Ofgem keep under close review progress made towards consumers switching (as recommended by CMA) away from the dominant supplier and intervenes in the market if progress suitable progress has not been made by 2021.

SG to work with Ofgem to ensure that all Pre-Payment ( PPM) customers also have access to tariffs and support (of the kind presently provided by "Our Power" to some local authority and Registered Social Landlord ( RSL) consumers) to enable them to access and manage the costs of their electricity as affordably and effectively as possible.

Local authorities and housing associations to further promote and support initiatives by new providers like "Our Power" to provide the highest quality energy price and customer care services to prepayment meter customers.

SG to investigate whether there is market supply failure in non-regulated fuels - to be defined as when there are less than 4 wh olly independent suppliers available within a defined market area - and if and where they evidence of detriment to consumers, to recommend the CMA investigate further.

SG to promote, support through advice line information and grant-incentivise collective buying clubs for domestic oil and LPG.

SG to promote and grant-incentivise the development and uptake of District Heating Schemes in those instances where they can deliver affordable warmth outcomes for consumers.

The Task Force welcomes the commitment given by the UK Government that all customers in the UK will share equally the cost of the new power station required in the Shetland Isles. We urge the UK Government to keep the level of the Hydro Benefit subsidy under review so that any further divergence in cost differentials, such as the impact from replacing sub-sea cables to island groups, is tackled and these customers do not face further detriment from higher costs.

UK Govt to extend the 5p remote Areas Fuel Duty Discount (which applies to diesel and petrol) to domestic oil and LPG wherever there is market supply failure - to be defined as when there are less than 4 wholly independent suppliers available within a defined market area - (definition supplied by Office of Fair Trading).

SG to identify and recommend ways to UK Government of removing the persistent oil price differentials that exist, whatever the highs and lows of the basic price per barrel, between Scotland, England and Northern Ireland.

Ofgem to investigate, develop and ensure the provision (either directly or by a trusted and independent intermediary e.g. Citizens Advice Scotland,( CAS)) of a non-transactional price comparison website where prices can be compared on all tariffs charged by suppliers of all domestic fuels in all distinct energy market areas of Scotland. CAS to explore the possibility of providing a bespoke service for these customers, delivering information, awareness-raising and a handholding advice service through referral to local and national agencies.

Ofgem and SG to lead and co-ordinate a campaign to publicise and promote the advantages of switching, with a particular priority to be given to off-gas rural areas. (See also 4.5.)

SG to fund Home Energy Scotland ( HES) to extend the switching service provided through the HES network, building on the successful pilot of a switching service for tenants of local authorities and housing associations. SG is currently considering extension of this service and it should now be made available to all households.

SG to ensure that switching prompts are embedded in energy efficiency programmes, and expanded to other activities where possible. This should include advice for the regulated and non-regulated fuels.

UK Government to ensure that the Smart Meter roll-out reaches rural customers, particularly vulnerable customers and all those living in the more expensive, off-gas parts of rural and remote Scotland as early as possible in the rollout timetable. They should also ensure that these customers receive the technology that allows them to access the full benefits of the smart meters, requiring SMETS 2 capability.

Scottish Parliament and Scottish MPs to actively support information and switching campaigns and services aimed at saving consumers money on their energy bills. To further support this activity, and the recommendations of this report, we recommend the relevant subject Committees in the Scottish and UK Parliaments conduct annual scrutiny sessions to review progress in tackling fuel poverty.

Ofgem to include in their annual reports on the retail energy market, the extent to which each of them has addressed and mitigated the detriment to customers as highlighted by CMA in its recent Energy Market Investigation report. They should make particular reference to reductions they have made to the energy bills of vulnerable clients and the numbers and percentages of those who have switched from the dominant supplier - with specific reference to those living in off-gas rural areas.

SG and UK Govt to work together to deliver a supportive and stable policy framework that enables the development of local energy projects that tackle fuel poverty. Funding of in-depth support (both technical and capacity building) from Scotland's Development Agencies should also be supported. Delivering affordable warmth projects in rural communities is a very significant infrastructure development that justifies considerable planning and investment decisions by training and development agencies and should therefore feature in the review currently taking place on these agencies respective roles in Scotland.

Ofgem to investigate and set out resolutions to the National Grid infrastructure constraints which are delaying and preventing rural communities from deriving and maximising local social and economic benefits, including lower energy bills, from their community controlled renewable assets.

In so far as practicable, SG to supplement its existing support schemes, Community and Renewable Energy Scheme ( CARES) and Local Energy Challenge Fund to direct energy suppliers to fund and work with community-controlled renewable energy providers to develop and roll out new initiatives (like the ACCESS project in Mull and the NINES project in Shetland) which effectively circumvent the network constraints and which enable communities to derive, and pass on to local consumers, the full social and economic benefits of the cheaper 'surplus' energy which they generate locally from renewable sources.

Energy performance p42: The SEEP Programme should have a central objective to eliminate poor energy performance of a property as a driver of fuel poverty throughout all of Scotland including rural areas.

Energy performance p43: The SEEP Programme should include a milestone towards achieving this anti-fuel poverty aim, with all properties of fuel poor households upgraded to at least an EPC band C by 2025 with five-yearly targets set for progress towards EPC band B thereafter.

Energy performance p44: The SEEP Programme should consider the use of higher standards and incentives to promote new and "deep-retrofit" low energy homes in the social and private housing sector to help eradicate fuel poverty, reducing climate emissions as well as producing other benefits such as jobs and health and wellbeing.

Energy performance p45: Producing the SEEP Programme should be designed and implemented according to key criteria provided in this report including meeting households' needs, targeted approach, and best use of public funds, all building on current Home Energy Efficiency Programmes for Scotland ( HEEPS).

Energy performance p45: The SEEP Programme should be targeted at those properties for which the energy efficiency is the main driver for fuel poverty, with additional weighting on extreme fuel poverty. This will result in, for example, a greater focus on rural and remote rural properties which are disproportionally represented against these criteria. Clear measurement of performance is required.

Energy performance p47: Introduce regulations for a minimum standard of energy performance at the point of sale and rental for the private housing sector. Such regulation will be an important driver towards eradicating fuel poverty and should be introduced as soon as possible

Energy performance p47: Regulations should be designed to protect vulnerable households, and be accompanied by appropriate funding and advice to support compliance.

Energy performance p48: The Scottish Government should use its new powers in relation to the Energy Company Obligation ( ECO) to ensure that ECO supports the objectives of the National Infrastructure Priority on energy efficiency and its cornerstone programme SEEP. This will involve a holistic approach to programme management, using different sources of funding to minimise the cost of getting the maximum energy efficiency measures to eradicate fuel poverty.

Energy performance p49: The Scottish Government should explore the costs and benefits of approaches which would integrate ECO investment into the SEEP programme and include stakeholders, along with Ofgem and energy suppliers, in these discussions.

SG to use its influence on the next iteration (in two years' time) of the RdSAP tool and Energy Performance Certificate ( EPC) so that they properly reflect:

• the range and distribution of prevailing climate conditions and other characteristics in rural and urban parts of Scotland, including:
  • effects of draughts and wind-driven rain on heat loss and fabric condition;
  • room-in-roof and wall types;
  • consideration of opportunities to recommend more than one type of cost-effective heating solution; and
  • crucially, but on a comply or explain basis, they should also allow for an approved overrule when the most appropriate improvement measure/s would currently not otherwise be permitted.

SG to encourage relevant protocol organisations to ensure consistency in the production of such improved RdSAP/ EPC reports through assessor training.

SG to ensure that Scotland's Energy Efficiency Programme ( SEEP) grant and loan funding is made available to support the costs of essential building repair and improvement works which may be required before energy efficiency improvement measures can be installed.

SG also to change the criteria for WHS to include funding for enabling measures such as domestic oil and LPG tanks, electrical upgrades, flue lining and the installation of the most efficient storage heaters.

Small firms based in rural areas should be encouraged and enabled to provide the skilled workers required to deliver all SEEP funded projects e.g. by SG working with the British Board of Agrement ( BBA) to simplify accreditation and tendering requirements and ensuring that there are more, qualified trainers available to deliver accreditation in rural areas.

Historic Environment Scotland should research, develop and promote more case studies to highlight affordable insulation, draught protection and heating options that prolong the life and conservation status of rural Scotland's built heritage whilst delivering effective affordable warmth and ventilation for occupiers.

SG to develop a new scheme for private sector landlords which would require but incentivise them to bring their rented properties up to an affordable warmth level by offering them a mix of grant and loan, the size of which would be closely linked to agreement on the rent levels to be charged and the nature of the allocation process. This action should be re-visited once SG has consulted on the Regulation of Energy Efficiency in the Private Sector ( REEPS).

SG and installers to verify that all vulnerable households, including private tenants and their landlords, receive the locally-delivered support and advice they need to enable both parties to realise the benefits that should accrue from retrofit measures.

SG should also ensure that wherever they may live in rural and remote Scotland, the programmes must be capable of actually delivering the rates of grant funding support required to fully meet the potentially higher costs of installs.

How energy is used p51: The new fuel poverty strategy should acknowledge and address a fourth driver to fuel poverty which is how people use energy in their homes.

How energy is used p51: The Scottish Government should conduct research to understand the best approaches for support and engagement on the use of heating and energy saving technologies.

How energy is used p52: The new fuel poverty strategy should have the household's energy needs, and how they access and use fuel at the centre. Any interventions should be based around their particular needs.

How energy is used p53: The new fuel poverty strategy should include the participation of local, trusted organisations which provide wider support to householders on the use and management of heating systems.

Collaborative partnerships p60: Local agencies should put in place training and skills development that support front line staff to identify challenges people face in sustaining good health and wellbeing, including signs of fuel poverty or the risk of fuel poverty, and make appropriate referrals to specialist advice and support services.

Governance p76: The Scottish Government should support a single contact number for consumers concerned about any aspect of delivery of energy efficiency measures in their homes provided by the public sector or through energy suppliers obligated by the public sector

SG to contract HES to further develop its existing third-party portal service to ensure that it delivers to all rural and remote areas and provides a seamless referral mechanism between all health, social care and locally based support organisations. The purpose is to ensure that all vulnerable households actually receive the help and support they need.

NHS Scotland to discuss with the Royal College of General Practitioners ( RCGP) and other relevant professional bodies to agree a process of contractual obligation by which all patients with fuel poverty related health conditions including those living in rural and remote GP practices areas, are referred to appropriate fuel poverty advice and support agencies for the practical care measures they need.

To further facilitate and support inter-agency collaboration, SG to share its comprehensive mapping service which identifies all of Scotland's fuel poverty / affordable warmth service providers, the geographical areas they cover and whether they make referrals to Home Energy Scotland and vice versa.

Ofgem to expand the role and duties of energy suppliers in line with the recommendations put forward in Ofgem's recent Priority Services Register Review. In summary, this "will require companies to move away from a 'box-ticking' approach and adopt pro-active and procedures to identify and help their vulnerable customers."

SG to commission a comprehensive 'energy carer' pilot to assess the effectiveness of high quality, in-home locally delivered, holistic support in bringing verifiable affordable warmth improvements to cold, vulnerable fuel poor households living in any part of remote rural Scotland.

SG to issue guidance to all agencies engaging in the delivery of both HEEPS ABS and WHS to ensure closer joint working, where practicable, including guidance on data sharing.

SG and umbrella organisations like Scottish Federation of Housing Associations ( SFHA) to investigate and consider the potential use of expertise already embedded in some rural housing associations to extend their outreach support services to the affordable warmth needs of private sector households in their communities, as well as continuing to meet existing social housing energy efficiency obligations to their own tenants.

Governance p72: The Scottish Government should work with local councils and other stakeholders to design and implement accountability arrangements for national and local government and other agencies working in collaboration on fuel poverty ( e.g. poverty, health, energy and housing). The arrangements should include a statutory basis for the fuel poverty strategy, including targets with requirements to measure progress.

Governance p72: Establish robust and transparent scrutiny arrangements to oversee progress of the new fuel poverty strategy so as to enhance trust and credibility.

Governance p74: The existing Fuel Poverty Forum should be given an important transitional role to any new arrangements for advice and scrutiny and should oversee the development of the new fuel poverty strategy.

Governance p75: The future Consumer Scotland Agency should have a particular duty to consider the needs of fuel poor consumers and take actions to address fuel poverty.

Governance p76: Monitoring and evaluation of the consumer experience of fuel poverty programmes is essential to confirm that high standards are consistently met during programme delivery.

Governance p77: The Scottish Government should explore ways in which protection could be improved for consumers using unregulated fuels, particularly including those using district heating as well as traditional off gas fossil fuels.

Governance p80: A monitoring and evaluation framework should be established for the new fuel poverty strategy and for SEEP and results should be reported to the fuel poverty advisory and scrutiny body on a regular basis. It should be developed at the start in partnership with the bodies that are delivering the programme.

Governance p81: The new fuel poverty strategy should be led by a cross-departmental ministerial group, making fuel poverty eradication a clear component of the health, communities, inequalities, housing, social security and energy portfolios, with one cabinet secretary accountable to deliver the strategy.

Governance p82: The cross-portfolio approach should be matched at the local level through local wellbeing partnerships with strong leadership from Community Planning Partnerships, local authorities and Health and Social Care Partnerships.

Governance p83: The Scottish Parliament should request an annual strategy and work plan for Ofgem's activities in Scotland, addressing particular Scottish issues and concerns, including fuel poverty. Ofgem should be recognised as a key contributor to the new fuel poverty strategy.

Governance p82: The new fuel poverty strategy should be costed based on requirements to meet its desired outcome - affordable and attainable warmth and energy use for everyone in Scotland - and adequate resources (funding and capacity) made available at a national and local level on a multi-year basis.

The practical effectiveness of fuel poverty / affordable warmth programme outcomes must be properly monitored and assessed and should record the before - and - after real world improvements made to the health and wellbeing of the households concerned. The data collected must provide a check on how targets are delivered, improvements assessed and programme outcomes defined (see also Chapter 10.)

SG to take on responsibility for commissioning Minimum Income Standard ( MIS) Scotland reports once every 3 years to provide top quality information on cost of living contexts and trends by 6-fold urban & rural classification. This will ensure the final product becomes a recognised national dataset.

SIMD domains to be expanded to better reflect rural disadvantage e.g. by adding a) a MIS index and b) an energy price index for all fuel types.

UK Gov't through BEIS to develop and adopt new modelling matrices which will reliably reflect and track rural and urban average energy consumption levels (using SG's six fold urban / rural classification).and which provide comparison with average dual fuel bills and average bills for each type of fuel. These would make it easier to identify disparity and therefore simpler to target remedial actions.

SG's Community Analytical Services to further develop rural fuel poverty proxies. This will enable them to better assess the effectiveness of spend and delivery of anti-fuel poverty outcomes in rural Scotland.

SG to ensure that any future change to the Fuel Poverty Definition will be developed and used to provide a baseline measure against which progress in delivering specific affordable warmth outcomes, particularly to vulnerable households, can be properly measured.

As a consequence of the completed Priority Services Register ( PSR) review, Ofgem to impose meaningful changes to the PSR license conditions currently applied to energy companies to make sure that they give Ofgem the details of all their vulnerable consumers so that Ofgem can ensure that appropriate "hand-holding" support is made available to them for switching and/or other suitable fuel poverty alleviation measures.

SG to ensure that all the component parts of the new SEEP and Scottish ECO programmes should be focused to ensure that, first and foremost, all vulnerable households are the priority target.