Heat in Buildings - Green Heat Finance Taskforce: terms of reference

Background

The Heat in Buildings Strategy (HBS) published in October 2021 includes a commitment to establish a Green Heat Finance Taskforce. Over the next Parliament, the Scottish Government (SG) will make available at least £1.8 billion of capital funding for heat and energy efficiency in buildings across Scotland. This will provide much-needed stimulus to the heat and energy efficiency sector. It should be noted that a substantial proportion of this investment will be targeted at supporting those least able to pay for the transition, including those in fuel poverty which currently accounts for around 25% of Scotland’s households.

The estimated total investment required to transform Scotland’s homes and buildings to reach net zero by 2045 is likely to be in excess of £33 billion. It is clear that this cost cannot be borne by the public sector alone. The Taskforce will explore and identify innovative financing mechanisms to maximise investment and find new products and financing/delivery mechanisms to help people and organisations make their properties warmer, greener and more efficient. It therefore has a critical role to play in facilitating how the heat transition in Scotland is financed and delivered.

Purpose and objectives

The purpose of the Taskforce is to develop a portfolio of innovative financial solutions for building owners in Scotland to ensure that by 2045, our homes and buildings no longer contribute to climate change, as part of the wider just transition to net zero. The high level objectives of the Taskforce are provided below:

• build on existing evidence to set out the alternative sources of funding and financing for heat decarbonisation, including existing technologies and new technologies which may develop, by September 2023 for both the medium and longer-term requirements
• explore and potentially pilot new and value-for-money innovative financing mechanisms for individual and community level investment
• act as a catalyst for long term relationships and partnering across the public sector, the heat sector industry, wider supply chain, building owners and investor/financial institutions
• support the alignment of the requirements for heat decarbonisation with the needs and investment activity across the wider energy system, considering returns and wider socio-economic benefits

The Taskforce will make its final report and recommendations in September 2023 with interim findings provided by March 2023, in order that there is a clear and identified range of financial support mechanisms available to support building owners to meet proposed regulatory obligations as set out in the Heat in Buildings Strategy. However, it will be essential that the Taskforce is delivery focused and drives partnership action throughout.

Members bring with them a wealth of experience and expertise, central to the operation of the Taskforce is utilising developing a partnership between industry, the Finance Sector, Scottish Government, agencies and others, dedicated to understanding and seeking solutions to the challenges of delivering net Zero buildings in Scotland by 2045.

Membership

Membership to the group is by invitation from the Co-Chairs and will be reviewed periodically. If membership to the group is accepted then attendance is expected, failure to attend three consecutive meetings, unless prevented by illness or unavoidable accident, will result in termination of membership.

Membership will be by invitation only. New members may be proposed by the group at any time throughout the year, either at meetings or via written communication for consideration by the Co-Chairs.

Structure

The core Taskforce is composed of a small number of permanent members that will provide direction and guidance to the Secretariat in undertaking its work.

To support this permanent membership and to develop a broader partnership across the heat decarbonisation and finance landscape, engagement will be developed beyond the permanent taskforce members through interaction with stakeholders, that will include subject specific working groups managed by the Secretariat to be undertaken over the duration of the Taskforce.

The Secretariat will facilitate any interaction with officials that may be necessary for process and/or administrative purposes. It will support meetings of the Taskforce and Working Groups through scheduling, providing papers, and noting minutes and actions. It will also support the drafting of the recommendations under the direction of the members.

Ways of working

The following ways of working have been outlined:

• the Taskforce will meet on a bi-monthly basis from January 2022 to September 2023
• the agenda will be constructed by the secretariat in consultation with the Co-Chairs prior to meetings, all members will be invited to contribute to the agenda
• taskforce meetings will be held in private. A summary of the discussions and action points from the meetings will be published on the Scottish Government website after the contents have been agreed by the participants. Notwithstanding this approach, the Scottish Government as with other public sector bodies, remains subject to Freedom of Information legislation which will apply to all information held about the work of the Taskforce
• non-core members may be invited to meetings in certain circumstances (e.g. to present on topics of interest to the group)
• the Taskforce will work to develop recommendations for practical action by all relevant players, by September 2023, with a set of interim findings by March 2023. The report will articulate the findings from Taskforce and Working Groups. Any changes to the reporting timelines of the Taskforce must be agreed by the Co-Chairs and all members
• in recognition that partnership and collaboration between a broad range of partners will be essential in making progress, the Taskforce may also make recommendations during its life as well as in its interim and final reports

Reporting and decision making

The Taskforce will report to Scottish Ministers. Decision making will be as far as possible by consensus, or by majority vote if consensus is not reached, with the Non–Ministerial Co- Chair having the casting vote. The Ministerial Co-Chair will not have a vote.

Conflicts of interests

All members of the Taskforce and those asked to participate in work involving the Taskforce will be asked to declare any conflicts of interest. A Register of Interests will be held with participants asked to update prior to each meeting.

Any action to be taken on the basis of these declarations will be at the discretion of the Co- Chairs. If it is one of the Co-chairs who has a conflict of interest, the other Co-Chair will lead in determining the appropriate course of action.

Agreed: 01/02/2022