Fuel Poverty (Targets, Definition and Strategy) (Scotland) Bill: island communities impact assessment

Annex F: Scottish House Condition Survey Key Findings

The following has been assessed from the Scottish House Condition Survey:

• At the Scotland level, fuel poverty rates were similar under the proposed definition and the current definition (2015-2017).The island local authorities show fuel poverty rates under the proposed definition that were lower than the current definition.
• In Na h-Eileanan Siar, the fuel poor rate decreased from 56% under the current definition to 36% under the proposed definition (-20 percentage points). In Orkney, we saw 57% under the current definition compared to 31% under the proposed definition and in Shetland 44% under the current definition and 24% under the proposed definition (-19 percentage points).
• This trend was replicated across all dwelling ages, dwelling types, tenures, household types and dwelling sizes - although the decrease is to a lesser extent in social housing in Orkney and Na h-Eileanan Siar.
• However, other rural areas also show lower fuel poverty rates under the proposed definition of fuel poverty e.g. Highland (-16%), Argyll & Bute (-10%), Dumfries & Galloway (-9 percentage points), Moray (-13 percentage points), and Aberdeenshire (-12 percentage points).
• The decreases in fuel poverty rates for island local authorities and other rural local authorities are driven by the inclusion of an income threshold. Households that have moved out of fuel poverty under the new definition of fuel poverty have residual incomes which are sufficient to maintain an adequate standard of living.
• Extreme fuel poverty under the new proposed definition was at 12%, compared to 8% under the current definition (over the 3-year period from 2015-2017).
• Unlike the fuel poverty rates, extreme fuel poverty rates in the island authorities were relatively close to those that were seen under the current definition, at 25% on Na h-Eileanan Siar (23% under the current definition) 22% on Orkney (23% under the current definition) and 18% on Shetland (also 18% under the current definition).
• Households on island authorities who are remaining in fuel poverty under the new proposed definition are more likely to be in extreme fuel poverty than households that are not on islands.

Analysis of island local authorities on household and dwelling characteristics that are impacted by fuel poverty

We know that low income is a key driver of fuel poverty in the new definition, because of the inclusion of an income threshold; other key drivers include fuel prices and energy efficiency. The Equality Impact Assessment showed that certain household and dwelling characteristics are more likely to be affected by the change to the new definition of fuel poverty than others. We have carried out an analysis which explores these characteristics and their prevalence in island authorities, based on SHCS findings over 3-year period from 2015-2017.

The first section below describes the characteristics where island local authorities were different to Scotland overall; note that some of these characteristics showed differences across island local authorities and non-island rural local authorities, suggesting that some of the differences may be driven by rurality and not that the households are on an island. The second section describes the characteristics where the findings were mixed, showing some differences across the 3 main island local authorities. The third section lists some findings that were similar for island local authorities and Scotland overall.

Characteristics where Islands Local Authorities show different proportions to the Scotland average:

• The island local authorities show higher proportions of dwellings that are off the gas grid than Scotland - 84% of dwellings in Na h-Eileanan Siar, and 100% in Orkney and Shetland, are off the grid (2014-2016 figures). Other local authorities that show values higher than the Scotland average (16%) are Argyll & Bute (48%) and Highland (62%) - but the proportions on islands are significantly higher. Prices of alternative fuel types could make it harder for dwellings that are off the gas grid to be lifted out of fuel poverty (see point 1 in section 2 below for more analysis on primary fuel types).
• Rural dwellings tend to be larger than urban dwellings. There are higher proportions of dwellings with 3 or more bedrooms (64% on Orkney, 67% Shetland and 72% Na h-Eileanan Siar) in island authorities, compared to 49% national average. However other rural Local Authorities also showed higher results than Scotland (Aberdeenshire 65%, Highland 64%), suggesting that this issue affects many rural households and not just those on islands. Larger dwellings will necessitate higher fuel bills to reach requisite temperatures and potentially higher costs to improve the energy efficiency of the fabric of the building.
• There are higher proportions of Owner occupiers on Na h-Eileanan Siar (74%), Orkney (77%) and Shetland (69%) than Scotland (61%). However some other local authorities also show higher proportions of owner occupiers (e.g. East Renfrewshire 87% Aberdeenshire 72%, East Dunbartonshire 79%).
• A more detailed tenure breakdown showed that there were higher proportions of households that were owned outright, across island authorities than across Scotland as a whole; 57% of Na h-Eileanan Siar households were owned outright, 53% on Orkney and 40% on Shetland, compared to 33% across Scotland. However a number of other rural local authorities also showed proportions of owner occupiers that were significantly higher than Scotland (e.g. Aberdeenshire 39% and Highland 43%). High rates of owned outright households may be associated with lower fuel poverty under the new definition as these households will have no rent or mortgage costs, whilst other tenures will have these costs deducted from their income.
• All the island local authorities showed lower percentage of dwellings that are flats rather than houses than Scotland as a whole: Orkney (7%), Shetland (8%), and Na h-Eileanan Siar (6%). Highland and Aberdeenshire also show relatively low proportions at 12% - higher than Orkney and Na h-Eileanan Siar but similar to Shetland. It may be more expensive to increase the energy efficiency of houses, compared to flats, which could be a challenge when tackling fuel poverty.
• More dwellings with lower energy efficiency - looking at the percentage of dwellings in bands F or G (SAP 2009): Na h-Eileanan Siar (14%), Orkney (12%) and Shetland (9%) are all higher than Scotland (4%). Argyll & Bute (10%), Aberdeenshire (8%), and Highland (8%) were also high. Trends under mean SAP 2009 ratings and percentages of dwellings in bands F or G under SAP 2012 show similar findings.
• Fewer dwellings with higher energy efficiency, as measured by the proportion of dwellings in bands A-C (EPC 2012), at 11% in Na h-Eileanan Siar, 14% in Orkney and 6% in Shetland, compared to 39% across Scotland as a whole. Other rural areas that also showed relatively low proportions of dwellings in EPC bands A-C were Highland (21%) and Dumfries & Galloway (20%).
• Percentage failing the SHQS "energy efficiency" criterion is higher in Na h-Eileanan Siar (56%), Orkney (51%), and Shetland (61%) than Scotland (32%). Other rural areas were high (e.g. Aberdeenshire 43% and Argyll & Bute 44%, Highland 41%, Moray 40%), but islands were significantly higher than the other rural local authorities. Energy efficiency is a driver of fuel poverty, therefore this could impact on islands more than other areas.

Characteristics where findings across the island local authorities were mixed:

• Whilst all island authorities were less likely to rely on gas than other areas of Scotland, the primary fuel types varied across the island local authorities. On Orkney and Shetland, the most common primary fuel type was electricity (57% on Orkney and 61% on Shetland), whilst oil was less common (38% on Orkney and 27% on Shetland). This differed from Na h-Eileanan Siar, where 33% of households were using electricity as their primary fuel type and 48% used oil. Fuel prices are a key driver of fuel poverty, therefore changes in the prices of electricity or oil could cause fuel poverty rates to be impacted differently between Orkney and Shetland, and Na h-Eileanan Siar. Electricity is often one of the most expensive types of fuel, so this could impact on fuel poverty rates.
• Dwellings built before 1945: The percentage of dwellings in Orkney that were built before 1945 (44%) was higher than Scotland as a whole (31%), however in Shetland (27%) and Na h-Eileanan Siar (32%), the percentages were similar to Scotland. This is a broadly consistent trend across dwelling type, number of bedrooms, and household type.
• Incomes - using the average incomes from the Scottish House Condition Survey^[19], Shetland (£34,600) had a higher average net income than Scotland (£27,500), however Orkney (£27,700) was similar to the Scotland average whilst Na h-Eileanan Siar (£24,100) was lower than the Scotland average. The new proposed definition of fuel poverty is better aligned with low income than the current definition, therefore this is likely to impact on fuel poverty rates. The Scottish Household Survey also provides information on incomes by local authority and these also showed a mixed picture for island local authorities - 4% of households in Shetland had an annual net income in the £6-10,000 income band which was lower than the Scotland average (8%). Na h-Eileanan Siar showed a higher proportion in the £6-£10,000 band (14%) than Scotland (8%) and a lower proportion in the £40-£50,000 band (6% in Na h-Eileanan Siar compared to 10% in Scotland). However Orkney showed no difference from Scotland on any of the income bands.
• When comparing average incomes, it is useful to take account of household size and composition, for example couple households are likely to need a higher income than single person households. Equivalisation is the standard method for adjusting income to take account of household needs. Using this method, Shetland and Na h-Eileanan Siar again had significantly higher average income than Scotland overall, however Orkney and showed a similar average income to the Scotland average.
• Percentage of dwellings with any disrepair - Shetland (54%) and Orkney (62%) both showed lower percentages of dwellings with any disrepair than Scotland (70%), but Na h-Eileanan Siar was not different (74%).
• The percentage of dwellings with critical disrepair reflected the pattern for any disrepair - Shetland (37%) and Orkney (42%) both showed lower proportions of dwellings with critical disrepair than Scotland (50%), but Na -Eileanan Siar was not different (54%).
• Dampness - households in Orkney (7%) and Na h-Eileanan Siar (8%) were more likely to show evidence of damp than Scotland (3%). But Shetland (5%) showed no difference.
• Households with a person containing at least 1 person who is long term sick or disabled was lower in Orkney (36%) and Shetland (37%) than Scotland overall (44%). However Na h-Eileanan Siar (40%) showed no difference to Scotland overall. This could affect fuel poverty rates because the enhanced heating regime will be applied to households with at least 1 person who is long-term sick or disabled (however the enhanced regime is also applied to households with at least 1 member aged 75 or over - the percentage of people who qualify for the enhanced regime has not been analysed here). Please note that further work is being conducted on the criteria for enhanced heating regimes, so there may be some further refinements.
• The proportion of homes below tolerable standard was higher in Na h-Eileanan Siar (5%) than Scotland overall (1%). Orkney & Shetland showed no difference from the Scottish total. There are a range of reasons why a dwelling can be below tolerable standard, some of which may be linked to fuel poverty (e.g. supply of thermal insulation and satisfactory provision for heating).
• The proportion of households where one or more of the members received care services was lower in Orkney (3%) than Scotland (7%), but Shetland and Na h-Eileanan Siar showed similar percentages to the Scottish total.
• The percentage of dwellings with evidence of extensive disrepair was higher in Orkney (13%) than Scotland overall (6%), however Shetland and Na h-Eileanan Siar showed similar percentages to Scotland.

Fuel poverty rates by local authority under the 1. the current definition, 2. the new definition and 3. the new definition with a Minimum Income Standard uplift for remote-rural and remote small towns. 2015- 2017.

Current definition fuel poverty rates 2015-2017 by Local Authority are published here:
https://www2.gov.scot/Topics/Statistics/SHCS/keyanalyses/LATables1517

Extreme fuel poverty rates by local authority under 1. the current definition, 2. the new definition and 3. the new definition with a Minimum Income Standard uplift for remote-rural and remote small towns. 2015-2017.

SHCS Local Authority tables are published here:
https://www2.gov.scot/Topics/Statistics/SHCS/keyanalyses/LAtables2016
* There are many ways in which a remote rural uplift could be approached and these may lead to slightly different results, however the statistics give an indication of likely impact