Local Heat and Energy Efficiency Strategy pilots: phase 3 - evaluation

4. Findings of the evaluation of Phase 3 pilots

4.1 Headline Findings:

The main findings from our stakeholder interviews are consistent with the main findings from Phases 1 and 2 of the pilots. The following themes were prominent and seen as the biggest successes and challenges throughout the LHEES process:

• The process proved to be a very useful data gathering exercise for local authorities and helped them to gain a more detailed understanding of the domestic and non-domestic building stock in their locality in addition to the heat demands.
• LHEES provided an excellent benchmark for the council's activities to date and helped identify priority areas to channel support in order to successfully begin to decarbonise.
• The LHEES process gave local authorities an opportunity for significant upskilling on decarbonisation through working with the consultants.
• The process encouraged cross departmental collaboration and put issues around climate change and decarbonisation further up the priority list of the councils' activities.
• The LHEES produced during the pilots were insufficiently detailed to allow councils to begin planning implementation actions.
• The task was demanding and time consuming and local authorities without a dedicated LHEES officer struggled to find sufficient resource to allocate to it.
• There was a concern over the lack of long-term funding needed to implement the scheme effectively.
• There was support from local authority officers for LHEES to become a statutory duty with sufficient accompanying resources to deliver an in-depth and useful strategy.
• Delivering LHEES on a long-term basis will require 1-2 full time staff.
• Engaging with the general public was difficult as local authorities did not want to raise the hopes of the public and did not feel they understood the outcomes of the pilot enough to communicate them clearly.
• Some local authority officers felt there was insufficient clarity from Scottish Government on what an LHEES should look like.
• Identification, sharing, and analysis of relevant data was difficult and further complicated by time consuming consent procedures.

An issue that did not come up in Phase 3, unlike in the previous phases, was the political sensitivities about an area-based approach. In previous phases councils highlighted that if pilots were focused on specific small areas there would be a negative response from other areas who may see this as unfair. This concern did not come up in the Phase 3 pilot which could be due to the fact that although pilots did have a specific small area focus, the wider local authority was also analysed, and authority-wide targets and priorities were identified.

4.2 Theme 1: Pilot outcomes and achievements​

4.2.1 Summary of key findings

• Increased understanding – the LHEES process has enabled councils to identify challenges and opportunities around decarbonisation, energy efficiency improvements in buildings, heat networks and fuel poverty in their respective localities.
• Funding – without the funding from Scottish Government, councils would not have had the resources to develop an LHEES.
• Lack of certainty over future development – while pilots have presented local authorities with useful data and opportunities for future LHEES activities, some remain unsure about implementation of measures as they don't know what funding and resources will be available in the future.
• Access to data – LHEES has opened the doors for councils to access and understand data they had not used before.
• LHEES can increase understanding of the local energy situation but council capacity to move from this to implementing change will vary and additional support may be needed.
• Alternative funding – LHEES activity has enabled access to new funding opportunities such as LCITP grants.
• Building internal momentum – LHEES has fostered internal engagement within the councils and helped draw attention to climate change and related challenges around energy and decarbonisation, enabling task forces to drive change.

4.2.2 Developing a better understanding and building momentum

Council stakeholders noted that the LHEES funding has made it possible to initiate and trial valuable decarbonisation work in their local area. This has offered a variety of benefits and opportunities, including:

• Improved understanding of how to make homes warmer and more energy efficient, whilst moving away from gas heating, and building this activity into local housing strategies.
• Providing direction for fuel poverty projects.
• Enabling the exploration of opportunities around district heating.
• Opportunities to engage with new stakeholders.
• Consideration of the amount of funding required to take forward activities.
• Developing a decarbonisation evidence base.

As illustrated in the quote below from a local authority officer, the LHEES pilot facilitated engagement with what is seen by many as an impossible challenge, and demonstrated how local authorities can begin to address this:

The LHEES pilot has shown that decarbonisation is not an impossible task - just really hard - but not impossible! We have changed the discourse from "why should we even try to do this?" to "why shouldn't we do this?"

LHEES pilot activities have led to engagement with wider council colleagues, which in turn has stimulated new processes and knowledge sharing across the council, as well as adding LHEES into wider strategies and action plans.

Local authority stakeholders also considered that the pilots had enabled them to build on the momentum of existing activities, and in turn this has increased internal morale.

The pilots have increased understanding of the local energy situation and broadened engagement across stakeholders within and outwith local authorities. It is important that councils can learn from one another's experience, as different councils have made progress in different aspects of LHEES development.

One local council officer noted outdated council plans which hence could not be relied on as a basis for LHEES.

Conversely, one council considered that the results of their LHEES pilot show more of what had already been undertaken by the council rather than what is needed going forward. Other councils also felt unsure of how LHEES provides a pathway for the future as opposed to getting a 'closer look' or 'blueprint' of all the work that needs to be done in their building stock.

Several stakeholders noted that, from a strategic perspective, LHEES is considered a positive step towards decarbonisation of their local area, but ultimately the success of the LHEES pilot is dependent on whether or not the strategies are implemented. These councils were unsure about how to implement their strategy, leading to scepticism around the material impact of LHEES, as the following quotes highlight:

"As it stands, I don't see anything coming from the LHEES process as it exists at present."

"There's two aspects having an LHEES. In itself it is [going to] do nothing. Local authorities and organisations are full of great strategies that look great on the shelf; we could spend a lot of money, take up a lot of time in producing an LHEES. But really, that's absolutely of zero value unless we go forward and apply it. So for me, there's two strands to that. One is actually the production of the completion of an LHEES and then secondly is the ongoing application of it."

In some cases, the uncertainty on how to implement LHEES has been linked to the impact of the COVID-19 pandemic (see below) as it has reduced stakeholder engagement activities and networking significantly though, even without the pandemic, the same uncertainty around how LHEES can be applied was a prominent concern in Phases 1 and 2. While some local authorities have work still to do, the results from the pilots can be used to help complete stages of the LHEES process that are unfinished or to improve already complete elements of LHEES, which in turn can support the future implementation of LHEES.

4.2.3 Impact of the COVID-19 pandemic

The COVID-19 pandemic has led to a great deal of frustration across all stakeholders interviewed as part of this evaluation. It has led to all pilots taking different approaches and deviating from initial plans.

Examples of COVID-19 impacts include:

• The inability to conduct housing stock checks, which meant that for one council there were difficulties in validating and updating data about their housing stock.
• A lack of stakeholder engagement activities, with some councils not delivering on internal stakeholder engagement.
• Other authority work taking urgent priority in response to the pandemic, to the extent that the LHEES pilot was put on hold.

There is a good understanding of the difficulties and limitations caused by COVID-19. However, there may be other factors that would have limited the effectiveness of the pilots in the absence of the pandemic, such a skills gaps and a lack of preparedness to map and engage with all relevant stakeholders.

4.2.4 Additional outcomes

Two council officers observed outcomes from the pilots that were not mentioned by the majority of others. These include:

• Accessing new funding opportunities through working with contractors. This has included access to Low Carbon Infrastructure Transition Programme (LCITP) funding. The council stakeholder noting this additional outcome commented that the work on LHEES had given their application strength and validity, since it had been based on strategic analysis. Scottish Government may wish to consider how they best recognise the added value of funding the development of LHEES, which can lead to councils accessing further finance for development and implementation of energy activities.
• Understanding procurement through the Scottish Government's Excel framework.

4.2.5 Comparison between phases 1, 2 and 3

Table 2: Evolution of findings: Theme 1 'Outcomes and Achievements' comparison between Phases 1, 2 and 3.

Key findings

Key findings from one or more of the pilot phases

Resources - A need for greater certainty in future resource levels at national and local levels

Changes in response

Local authorities from Phases 1, 2 and 3 expressed the same views on needing additional guidance to ensure consistency and parity across all local authorities.

Key findings from one or more of the pilot phases

Results from pilots - Few new opportunities for action emerged^[8]

Changes in response

Phase 2 and 3 pilot results show opportunities for action for most local authorities, with varying levels of investment as well as division between action for domestic and non-domestic buildings.

Key findings from one or more of the pilot phases

Useful evidence - Through the pilots, project teams were able to develop an understanding of the process of developing an LHEES and create an 'evidence base' of the building stock^[9]

Changes in response

This has been a shared finding in both Phases 2 and 3

4.3 Theme 2: LHEES staffing and resources

4.3.1 Summary of key findings

• Ownership – taking ownership of the LHEES process and working closely with consultants has empowered many councils, improved their collective technical knowledge of LHEES and supported upskilling efforts.
• Aligned strategies – some councils have found that the concept of LHEES supports their internal policy strategies and future plans. Councils involved in LHEES Phase 3 have found that LHEES can be a useful tool to demonstrate accountability and provide evidence that they are delivering on key policy commitments such as climate change or fuel poverty.
• Resources – LHEES pilots have struggled to take off in councils where staff are demotivated, overworked and feel understaffed. This has affected the delivery of the pilots and made the working relationship with delivery partners difficult.
• Consultants are key assets – councils have (for the most part) very positive attitudes towards working alongside consultants.
• Engagement at higher levels of seniority – ownership and vision have come from officers and teams with limited authority and influence. Some local authority interviewees believe senior management and elected officials are not interested in LHEES, while others are keen to get them on board as soon as possible. But most agree that if LHEES are to be successful, support and leadership by elected officials and senior management will be essential.

4.3.2 Strategic ownership of LHEES

Broadly speaking, council stakeholders noted that the resources provided by Scottish Government – including guidance, funding for internal council officers and funding for external consultants – have enabled them to gain an understanding of the process for developing an LHEES. However, the extent to which this translated into a sense of ownership of the pilot varied greatly.

In many cases, the ability to take ownership of the LHEES pilot was linked 1) to a recognition of how LHEES fits in with other targets and strategies and 2) engagement of the wider council and senior officers around LHEES. First, planning an LHEES can allow a council to integrate a new mechanism for commitment to the climate change agenda. For example, one council stakeholder noted that LHEES is a useful mechanism to hold local authorities accountable in light of national and local climate change targets. Authorities can use the LHEES both to demonstrate to the public that they are taking ownership of the transition at the local level, and to feed into the work of other departments in the council. Several councils highlighted links to existing council strategies (e.g. on climate change and on fuel poverty) as a useful way to engage senior officers around LHEES and build internal support.

And as the following quote illustrates, gaining internal support including at senior levels was seen to strengthen the ability of the council to take ownership of the process:

"There is support from many areas of the council, including more senior colleagues which strengthens the role of the council within LHEES and future work." (Local authority officer, 2021)

Scottish Government could consider how they may best support officers to foster this senior-level engagement, as this varied significantly between local authorities.

The experience of other local authorities reflected lower levels of empowerment to take ownership of the LHEES pilot. Some stakeholders considered that there was no clear mechanism to allow local councils to engage with their LHEES, and there were several references to LHEES being imposed on councils and individual officers. The following quote illustrates a number of the challenges local authorities may experience in taking ownership of LHEES, including the importance of adequate resources, and engagement of staff with relevant knowledge and experience:

"There is not a lot of ownership [of LHEES] from the council. Council employees are already overworked as they are, and it feels like LHEES was dumped onto someone to be delivered. But it wasn't even given to someone with expert knowledge on this area. The LHEES is focusing on domestic housing stock, yet the officer managing it has a role in managing non-domestic assets."

A broader point around knowledge requirements was emphasised by a local authority stakeholder, who found that a lack of knowledge in areas of decarbonisation and therefore lack of understanding of how to approach LHEES resulted in lack of strategic ownership and, ultimately, led to the creation of an LHEES that was felt to be vague and general in nature.

One local authority interviewee noted that they have yet to fully understand the national vision for LHEES, with particular uncertainty around the role of the council in relation to non-council building stock. This prevented a sense of ownership of LHEES. Another local authority participant considered that there needs to be greater awareness of LHEES – both within the council and amongst key external stakeholders – before ownership could be embedded and future stages could be taken forward.

Finally, it was suggested that COVID-19 has had an impact on strategic ownership due to other priorities taking precedence, a need to delay timelines and give up on engagement activities.

4.3.3 The role of local authorities in delivery

The previous section described varied experiences of local authorities in terms of ability to take ownership of the LHEES process. This of course impacted the ways in which they approached the LHEES pilots, but one common theme relating to the practical work with LHEES was its ability to encourage cross-departmental working. Stakeholders were broadly positive about the role of LHEES in bringing together many areas of the council, including asset management, energy, planning and housing teams. The following quote is illustrative of this experience:

LHEES encourages cross departmental working. As a small council we are used to this and it's usually quite a smooth process, but there is still an element of bunker mentality in some departments. LHEES has become a tool to break with that and shift focus to the whole of the Council.

Only one council highlighted a lack of engagement by internal stakeholders as a highly demotivating factor:

"There is a strong feeling that the council neither understands nor shows interest on LHEES, which inevitably ends up being highly demotivating."

Interviewees from one council spoke about the practical processes through which they are sharing results with elected members. They hope that this will provide a framework for LHEES activities to inform the council's decision making going forward.

4.3.4 The role of consultants in delivery

The research team consider that local authorities have generally benefitted from working with consultants during the development of LHEES, but that the impact that this has had on local authority ownership of the strategy has varied. Scottish Government could consider developing guidance for local authorities on how most effectively to combine internal skills development with use of external consultant support to enable full local authority ownership of the LHEES and its implementation.

4.3.5 Skills and resources for production of LHEES

Similarly to Phase 1 and 2 LHEES pilot participants, Phase 3 stakeholders identified a range of skills required to produce an LHEES effectively – in terms of the skills that internal and external stakeholders already have or need for the piloting activity and also for the future delivery of LHEES. The skills identified include:

• An understanding of energy in domestic and non-domestic settings, including consumption and resulting bills, building physics and surveys (including EPCs), and decarbonisation measures and technologies.
• Liaison and relationship building skills, including those to support the identification, sharing and analysis of relevant data, and to implement action plans.
• Data collation and analysis, including GIS and heat demand.
• Proactive project management skills to aid the development and delivery of strategies and action plans.
• Knowledge and awareness of upscaling retrofit from individual buildings to large scale programmes, including the deployment of large infrastructure such as heat networks.
• Knowledge and awareness of current and future policy and its integration with LHEES activities.
• Strategic influencing and negotiation skills to aid discussions with senior management and elected members.
• Strong stakeholder engagement skills to aid facilitation within councils and with external stakeholders, including the general public.
• An understanding of council processes and procedures, including planning and building control functions.
• Local knowledge of buildings, stakeholders and issues.

The extent to which local authorities felt capable of delivering LHEES in-house varied significantly from council to council. The majority of interviewees identified data analysis, and GIS in particular, as an area where they had limited capability and capacity.

Council stakeholders noted that there is confidence that where skills are lacking, gaps can be filled by external consultants. However, this partnership working may have led to a reliance on contractors and a reluctance to develop new skills internally as a result. Consultants are seen as better placed to undertake some activities – particularly areas of technical expertise.

One stakeholder noted that their council does have a technical team though not engaged as part of the pilot as there was concern that their work would overlap activities carried out by procured contractors.Nevertheless, integrating the technical team in the future is an option with any expansion of LHEES. This would take advantage of existing in-house skills and increase autonomy in the LHEES process.

Many of those interviewed as part of this evaluation highlighted resourcing issues. Several called for dedicated staff members and teams to deliver LHEES. One stakeholder also suggested that the assumptions of financial investment needed for LHEES were not accurate, and that in reality the costs of taking action (in this case, within domestic properties) was substantially higher than initially thought.

The LHEES pilots have demonstrated the very wide range of skills and knowledge needed for development and delivery of the strategy, as demonstrated in quote below from a local authority officer:

"We don't know what it is we don't know. There is certainly knowledge of energy efficiency in the existing housing stock, but we have no idea on district heating and heat networks".

Local authorities could consider mapping where these skills reside in the local area, enabling them to determine what can be done in-house and what requires external support.

In addition, Scottish Government could consider supporting local authorities in upskilling where LHEES and decarbonisation are new concepts. Before any form of delivery, low carbon options need to be understood and a minimum threshold of understanding within local authorities if they are expected to deliver an LHEES programme. For example, one council officer did not know what a heat network was until after their LHEES Phase 3 pilot had begun.

4.3.6 Comparison between phases 1, 2 and 3

Table 3: Evolution of findings: Theme 2 'LHEES Planning' comparison between Phases 1, 2 and 3.

Key findings

Key findings from one or more of the pilot phases

Skills - Supporting and upskilling officers would be critical for enabling the delivery of LHEES^[10]. Some councils have some in-house capacity but most lack the range of skills needed to develop & implement LHEES.

Changes in response

Local authorities from all phases have agreed that further upskilling and technical support for officers is vital to ensure a smooth roll out and maintenance of LHEES.

Key findings from one or more of the pilot phases

Replicable method- Councils expressed disappointment that, whilst they had a better understanding of what an LHEES involved, they did not feel that they had been left with a method that they would be able to roll out across the whole local authority to develop a full LHEES.

Changes in response

Phase 2 showed that some councils saw the lack of feasibility in their project as a useful lesson and were not discouraged by the lack of replicable methods. Phase 3 showed varied results which allowed some councils to elaborate their plans, while others would need to re-develop their scope and targets before a method can be implemented.

Key findings from one or more of the pilot phases

Partnership with consultants – Hiring consultants with prior knowledge of the local area, and working in close partnerships, helped to ensure a sense of local ownership of LHEES.

Changes in response

Councils from all three phases have agreed that working with consultants has been an instrumental asset in delivering pilots and also future LHEES programmes. However there is a distinction between experience in Phase 1 and Phases 2 and 3. The centrally procured technical support in Phase 1 was less well received: some local authorities views were that they did not get customised support in Phase 1 and that consultant contribution was largely desk-based and standardised, rather than responsive to local priorities.

4.4 Theme 3: Data

4.4.1 Summary of key findings

• A useful exercise – local authorities had the opportunity to learn from and use data that they had not previously worked with. Through collaboration with consultants, some councils also increased their understanding of data previously used, learning how to use known datasets with more versatility, looking at and working with data in new ways, uncovering new opportunities for action.
• Internal data and software issues – outdated council-held datasets on energy use in buildings and in some cases, software used to look at heat data and existing housing stock, is a major concern for councils trying to create a reliable plan of action to address energy efficiency measures.
• Lack of non-domestic data - Lack of data on non-domestic buildings is also a major concern.
• Home Analytics – while this is a crucial source of data, the datasets rely heavily on unreliable EPCs, some of which have been grossly miscalculated (according to a number of local authority officers). Home Energy Scotland and Heat mapping data were also regarded as highly valuable sources of data.

4.4.2 Overview

Stakeholders noted that participating in the LHEES pilots had enabled them to access and work with valuable data. Whilst most of this data had always been available, the LHEES pilot activities gave council stakeholders the opportunity to use it for the first time. Support from external consultants was pivotal in this, along with local knowledge to support data analysis activities.

Several noted how working with data – including existing and new data sets – was a particularly useful exercise and helped them build their understanding of spatial data analysis. For example, this has included understanding where local heat loads are, and where demand for heat could come from. In turn this helped the council approach specific stakeholders to consider where connections to a heat network could be placed.

As noted in the previous section on LHEES planning, the extent to which officers felt capable of delivering LHEES in-house varied significantly from council to council. The majority of interviewees identified data analysis, and GIS skills in particular, as an area where they had limited capability and capacity. LHEES teams must have the technical know-how to understand and deploy opportunities around retrofit and the deployment of local carbon technologies.

Going forward, local authorities will need support in improving their data skills. Scottish Government could produce and maintain guidance on the data sets that exist, how to access them and how to use them.

4.4.3 Sources of data

A wide range of data sources were detailed in the stakeholder interviews and workshop. This included:

• EST's Home Analytics, and wider Home Energy Scotland datasets
• EPC datasets
• Scotland heat map datasets
• Local authority data, including:
  • Stock Condition Surveys
  • Data from previous projects, such as fuel poverty surveys

• Consultant data, including:
  • Wider Stock Condition Surveys
  • Local measures installation data
  • HEEPS data
  • Data from previous projects with academics.

4.4.4 Barriers to data

Stakeholders identified three types of barrier to accessing and using data as part of the LHEES pilots: 1) availability and accuracy; 2) access and 3) software.

First, lack of data and weaknesses of existing data sources was a recurring theme. In particular, data on non-domestic buildings as well as private rented properties is lacking. But limitations were also noted around existing data sources.

The reliability and accuracy of individual datasets was an issue raised by all stakeholders across all pilots. Comprehensive, reliable data is central to the planning and implementation of LHEES, and consideration should be given to investment to improve these data sources going forward. Stakeholders found that Home Analytics data provided limited information on individual local council areas, was not 100% accurate and needs updating to include more recent EPC data. Consider, for example, this quote from a local authority officer:

There are gaps in EST's Home Analytics dataset. For example, we found one property in a street that was EPC Band C. The dataset makes the assumption that all properties in that street are also EPC Band C.

Moreover, local authority officers from several councils struggled to engage with this data for implementation in their strategic work. One stakeholder experienced difficulties connecting Home Analytics data with their own social housing energy performance data.

Numerous stakeholders also noted the lack of data on non-domestic building stock as well as complexities of merging different non-domestic datasets.

Several local authorities discussed how the COVID-19 pandemic had limited their ability to conduct housing stock checks, which could otherwise have been conducted to validate/update existing data and fill any gaps in data on local housing stock.

Secondly, several stakeholders discussed challenges around data access and sharing between local authorities and delivery partners. GDPR restrictions and data sharing protocols were considered strict and cumbersome, and stakeholders called for the Scottish Government to produce additional guidance on sourcing and using data for analysis.

Another stakeholder noted the difficulties in accessing data from other departments across the council and the wider public sector, noting that if key data is not shared at the right time, the implementation of the pilot becomes a struggle.

Third, and finally, several councils highlighted the problem of outdated software and a lack of efficient data storage. They consistently noted that they would need additional funding to upgrade software, e.g.: GIS systems.

The research team recommend that the Scottish Government, in collaboration with relevant partners, could facilitate improvement of datasets in key areas, including the energy performance of non-domestic buildings. Actions could also be taken to address quality issues and gaps in existing data sources, and to give local authorities priority access to new and improved datasets. Local authorities would also benefit from keeping their own local datasets as up to date as possible and identifying (and securing) the software and capabilities needed for effective data analysis.

4.4.5 Comparison between Phases 1, 2 and 3

Table 4: Evolution of findings: Theme 3 'Data' comparison between Phases 1-3

Key findings

Key findings from one or more of the pilot phases

Dataset awareness- LHEES Pilots supported people to be made aware of what datasets were available and how they could be used.

Changes in response

This point was shared by councils participating in Phases 1-3.

Key findings from one or more of the pilot phases

Data Availability - A lack of data available for some types of building stock, with commercial buildings being particularly problematic.

Changes in response

This too was a common finding with councils participating in Phases 1-3.

Key findings from one or more of the pilot phases

Data Sharing Agreements -The future roll-out of LHEES would benefit from clear guidelines in terms of when data sharing agreements are required, and the provision of templates for these^[12].

Changes in response

Councils from Phases 2 and 3 expressed concerns with regards to the slow speed and difficulty of establishing sharing agreements. The process is time consuming and at times there could be delays from any of the parties involved which hinders the ability to share data efficiently and quickly.

4.5 Theme 4: Stakeholder engagement

4.5.1 Summary of key findings

• The COVID-19 pandemic has significantly affected stakeholder engagement (Inside and Outside Councils) throughout LHEES Phase 3, particularly in councils with no experience in working remotely.
• Uncertainty going forward – councils are not entirely sure which outside Council stakeholders are most relevant to deliver LHEES and they have not done extensive enough mapping to determine who will be instrumental to make LHEES programmes successful going forward.
• Incentives missing – some councils feel they lack the instruments to incentivise stakeholders such as housing developers, private rented sector, non-domestic property managers and social housing providers to decarbonise if the regulation is not there to encourage them.
• Internal engagement – for the most part, councils have had a positive experience engaging internally with colleagues from other council departments.

4.5.2 Key findings

One of the major impacts of the COVID-19 pandemic has been the limited delivery of stakeholder engagement around the LHEES pilots. While not a core requirement within Phase 3 pilots, most councils declared that they had wanted to deliver much more in this area but had no option but to limit or stop all stakeholder engagement activities altogether.

Most pilots noted stakeholder engagement activities – both internal and external - as core LHEES pilot activities. This is because these activities help build greater local ownership of LHEES activities, which in turn leads to greater chances of success.

Many stakeholders noted positive internal stakeholder engagement activities, including (in a few instances) the involvement of senior management and elected members.

One interviewee noted the positive steps taken by their consultant who had been setting up focus groups of external stakeholders, including local businesses, universities and housing stakeholders.

There was some confusion for some council officers as to who they should be engaging with, while others noted that there would be no external stakeholder engagement activities until after the pilot was complete or that activities did not include engagement with the general public. Some council officers noted that since elected officials and senior members of the council were not expected to participate in the pilots, officers felt reluctant to engage with external stakeholders until they felt the support of the senior counterparts.

4.5.3 Barriers to engagement

Many Phase 3 pilot participants noted that engaging with external stakeholders was difficult, especially the general public. As illustrated below, this is a general challenge for local authorities, which is equally important in the context of LHEES:

"We struggle to get engagement from the local community, regardless of the topic."

One council noted that their approach to LHEES had been influenced by past negative stakeholder engagement experiences where response rates had been alarmingly low for issues considered vital to the community. In the case of this LHEES pilot, this learned experience led to the geographical selection of an area where council officers knew that the community were keen on alternative energy, to see whether this approach would result in a high level of engagement from the general public, However, the pandemic meant that this could not be tested during the pilot. Reflecting on their experience around stakeholder engagement, they suggest a key finding from the pilots may be the challenging nature of effective public engagement:

"One of our links is with local community councils – but none of them are meeting at all at the moment due to COVID. One of the findings of this project may actually be how hard it is getting to people, getting through to them, developing awareness and understanding. One of the reasons why we chose one of the locations [for the LHEES pilot] was because they have people who are interested in alternative energy – would that make a difference?"

Limited resources were declared as a key barrier to fulfilling engagement activities. As exemplified below, interviewees noted that there had not been a lot of internal engagement and subsequent support for LHEES, due to limited resources within their councils:

"Overall the sense is that LHEES is too much work and people are already quite strained as it is."

While there are certainly success stories of stakeholder engagement from the Phase 3 pilots, there are concerns that future work on LHEES [if LHEES is made into a statutory duty] will require substantial stakeholder engagement, and that there are a lot of parties that need to be brought in to deliver LHEES successfully.

Several local authorities are not confident in their stakeholder engagement skills and have not conducted comprehensive stakeholder mapping and other preliminary activities to allow them to understand who they should work with during the implementation of LHEES.

Councils will need support in stakeholder mapping and relationship building and management as LHEES expands beyond the pilot phase. This upskilling in councils is necessary to enable officers to confidently map and engage stakeholders, as well as to empower officers to successfully interact with various stakeholder groups of new significance such as Distribution Network Operators (DNOs), private rented sector (PRS) landlords and commercial building owners. This activity could include the production of guidance.

Upskilling in stakeholder engagement will reduce the reliance on formal regulation as the main motivator on private actors if councils are able to encourage and facilitate public-private collaboration around decarbonisation. In addition, interviewees considered that stakeholder engagement may be constrained by a lack of shared commitment to LHEES aims. Scottish Government could support local authorities by providing long-term policy clarity and effective public communication of energy transition goals. This could also be by a general framework for stakeholder engagement which could then be adapted to local circumstances. As a result, there could be an increase in stakeholder willingness to engage with local authorities.

4.5.4 Comparison between Phases 1, 2 and 3

Table 5: Evolution of findings: Theme 4 'Stakeholder Engagement' comparison between Phases 1, 2 and 3.

Key findings

Key findings from one or more of the pilot phases

Scope and Expertise - Neither local authorities nor consultants recognised this task as being within their scope of works for the pilot, and there was a lack of resource and expertise to undertake this work^[fn]. In Phases 1 and 2 this seemed to be background rather than foreground in LHEES pilots – it was a concern for the future potential implementation. Getting property owners of all types to participate has been much more central in the EES capital programmes, where self-funded groups were the target of engagement.

Changes in response

Stakeholder engagement has varied significantly from one phase to the other. While Phase 1 councils felt that stakeholder engagement was not a pertinent task within their responsibilities, phase 2 councils considered that it was too early to engage with the public and phase 3 pilots faced the COVID-19 pandemic and lockdown which made stakeholder engagement outside of the council extremely difficult. Having said that, councils in both Phase 1 and Phase 3 acknowledged that there is a lack of resource and expertise to undertake stakeholder engagement.

Key findings from one or more of the pilot phases

Managing Expectations - Officers also did not want to raise expectations by going out to communities to discuss potential heat and energy efficiency interventions that may not go ahead due to lack of funding or certainty over the future of LHEES.

Changes in response

While councils from Phase 1 pilots did not want to raise false expectations with the local community because of lack of certainty over the future of LHEES, Phase 3 councils were more concerned about the overarching regulation that incentivises decarbonisation and low carbon options as opposed to public perception of LHEES

4.6 Theme 5: Future implementation of LHEES

4.6.1 Summary of key findings:

• Several councils noted the implications of unique local circumstances, geographical needs and socio-economic contexts for how they approached the LHEES pilot.
• Councils are conscious they cannot fund LHEES alone. While they may be able to attract some funding from other sources, Scottish Government will have to provide adequate funding to enable further roll-out of LHEES as funding the activities in the LHEES delivery plan is costly at the public estate level.
• Funding from Scottish Government is essential, but councils are aware that they should also look at integrating local funding and support decentralised, flexible energy markets within their LHEES strategy to secure alternative sources of revenue. This applies to funding the production of an LHEES plan and to its delivery.
• For LHEES to be effective there needs to be a statutory duty supporting implementation as a lack of a statutory duty limits local authority officers ability to persuade developers, social housing providers and residents that decarbonisation measures must be implemented if councils are to reach their climate targets and commitments. Council officers feel that in the absence of a statutory duty, political leaders and senior officers will not prioritise LHEES.
• There is concern regarding the intensive resourcing requirements surrounding LHEES if it were to be taken forward.
• There was a common view that external consultants will be key to supporting future LHEES work.

4.6.2 Policy and strategic alignment of LHEES

Stakeholders interviewed as part of this evaluation understand that LHEES is part of a broader national strategy around decarbonisation, and that local councils have an essential role in convening stakeholders, influencing the direction of activities at the local level and taking forward action. However, there were concerns that there is a range of decarbonisation policies and regulations that need to be enacted or strengthened before LHEES can be delivered effectively, as well as a much larger cultural shift in attitudes to take forward decarbonisation activities. Without these, stakeholders considered that the impact of LHEES in the future would be limited. Consider, for example, the following quote from a local authority officer:

Local authorities have a role of influencer – but that's a tricky role as long as there is no regulation on private householders to reach energy efficiency levels – there is in the social housing sector… Regulations are coming in the private housing sector, but it still remains to be seen.

The first recommendation called for by stakeholders was to make LHEES a statutory duty, and for the Scottish Government providing support and resources to enable the effective delivery of LHEES by local councils and key stakeholders. Stakeholders noted that the duty should be replicable across Scotland's 32 councils, but at the same time be flexible and adaptable to different geographical and socio-economic contexts and local priorities.

The second high level recommendation was a call to enact and strengthen regulations around the decarbonisation of buildings. For example, one interviewee noted that without policies mandating commercial sector premises to improve their energy performance or connect to heat networks, they would struggle to engage with and act in this sector. Another area of concern was the cheapness of natural gas, and how the taxation regime should be shifted to promote decarbonisation whilst at the same time protecting low income and vulnerable households from falling into fuel poverty.

4.6.3 Stakeholder engagement

One interviewee had concerns over the level of stakeholder engagement required in the future should LHEES be taken forward as a statutory duty. While agreeing that stakeholder engagement is key to the delivery of LHEES at the local level, they had concerns that the activity would be a large draw on resources.

One council noted how the production of the LHEES report and other associated documents would be useful in engagement of elected members and senior officials, influencing them to take up the cause and facilitate action in the local area, as well as engagement with the wider local community.

4.6.4 Support required from the Scottish Government

Stakeholders gave mixed messages in terms of the support given and required from the Scottish Government:

Some authorities were very positive about the involvement of officers from the Scottish Government, noting that they had been helpful and supportive, whereas others noted that there had not been enough support or that support wasn't required at all. One interviewee commented that they were unaware of the Scottish Government's vision around LHEES.

One council stakeholder called for the Scottish Government to consider communications and interactions, as well as general support, aimed at senior council officials in the future. They felt that this has been lacking within the pilot activities.

Funding allocations, both for LHEES activities within councils and for associated consultancy support, were a hot topic of discussion with council officers across departments. One interviewee noted that while their council was struggling financially, the funding for the pilot had enabled decarbonisation activity to be taken forward. In addition, the need for capital funding support to enable the projects to get off the ground – taking LHEES plans to implementation stage - was emphasised by a wide range of stakeholders.

One council called for more workshops between local authorities and other LHEES stakeholders to promote and share best practice, emphasising the benefits of these forms of engagement:

"The Scottish Government workshops also offered support because periodically getting feedback from others - case studies and experiences from people in different authorities - that has helped us understand the pitfalls, the challenges we've all had. Each of these learnings are absolutely vital and it stops you from replicating something that hasn't worked"

4.6.5 Support from consultants

In comparison to previous LHEES phases, there was much more positive feedback from local authorities in Phase 3 about the experience of working with external consultants. This includes how they were procured all the way through to how they have worked closely with councils during the pilot.

Most, if not all, stakeholders wanted this activity to continue, noting how consultants were keen to educate, share knowledge and findings about local building stock, and guide council stakeholders through data and technical elements of the pilot. The benefits of working with external consultants is demonstrated in the following quote:

"The power of having great people working together, communicating, makes us able to take advantage of these opportunities". (Local authority officer, 2021)

If consultant support is not part of LHEES in the future, local councils would be concerned as to how they would be expected to achieve the same outcomes without being technically as well versed as contractors.

One council interviewee commented that there had been some uncertainty around the ownership of LHEES. They noted that they relied heavily on their contractor to lead the LHEES process, but at the same time there was the expectation from Scottish Government that LHEES should be council driven and locally owned. On a similar note, another local authority interviewee noted that their delivery partner had a slightly different vision of LHEES for the local building stock, resulting in some confusion.

There were some issues with miscommunication between consultants and councilsthat, in the opinion of one council interviewee, had led to the council not being able to make the most of the relationship.

The support provided by Scottish Government for procurement of contractors with relevant experience in LHEES pilots was welcome., However, one local authority was pleased to be able to procure the services of a regional consultant with vast amount of experience in the local area. It is important that experts bring together technical know-how and an understanding the geographical and socio-economic constraints and challenges of each individual local authority.

4.6.6 Skills

A long list of skills and knowledge areas have been identified as core to the implementation of LHEES (as outlined in section 4.3.5). This includes technical knowledge of energy demand in buildings and the decarbonisation of heat, policies, and project management and interpersonal skills in stakeholder engagement and negotiation.

With the anticipated roll out of LHEES, the Scottish Government will need to consider the capability and capacity within local councils, as well as across the wider stakeholder group who are vital to the implementation of local activities. The extent to which individual pilots felt capable of delivering LHEES in-house varied significantly from council to council. The majority of interviewees identified data analysis, and GIS in particular, as an area where they had limited capability and capacity.

4.6.7 Strategic positioning within councils

Numerous council interviewees expected that, upon completion of the pilots, LHEES will be fed into wider strategies, including housing, local energy plans and climate change strategies, as demonstrated by the following quote:

"Once the LHEES pilot is finished, the council will integrate that into an upcoming Climate Change Strategy which is being developed. It is expected that whoever becomes the lead on the climate change strategy will take on the lead on LHEES going forward -- while LHEES will remain inherently cross-departmental in nature". (Local authority officer, 2021)

Such integration of LHEES in council wide strategies, plans and activities is central to driving progress towards decarbonisation targets. Scottish Government could develop guidelines for LHEES integration across local authority activities.

4.6.8 Comparison between Phases 1, 2 and 3

Table 6: Evolution of findings: Theme 5 'Future implementation of LHEES' comparison between Phases 1, 2 and 3.

Key findings

Key findings from one or more of the pilot phases

Statutory Duty - Local authority officers and consultants interviewed were in favour of LHEES becoming a statutory duty.^[fn]

Changes in response

Councils from all LHEES Pilot Phases agree that statutory duty status would be beneficial for the future roll out of LHEES.

Key findings from one or more of the pilot phases

Incentives for Large Businesses - It would be helpful if Scottish Government created or reinforced mechanisms to encourage large businesses to engage with LHEES.

Changes in response

Phase 2 and 3 councils also agree that further regulation and/or mechanisms to incentivise large businesses are going to be necessary in order to support future implementation and incentivise LHEES programmes.