Energy Performance Certificate reform – lodgement fees and penalty charges: technical consultation - partial BRIA

Section 4: Additional implementation considerations

Enforcement/ compliance

As highlighted earlier within this BRIA, under the existing legislation, local authorities are designated as the enforcement authority. The Scottish Government has no plans to change this under the new Regulations. The current penalty charges for failure to comply with the existing EPC legislation are set out within Section 17 of the Energy Performance of Buildings (Scotland) Regulations 2008:

(i)£500 for dwellings or buildings [(or building units)] that are ancillary to dwellings; or

(ii)£1000 in any other case.

This consultation is seeking views on the future level of penalty charge notices.

In order to support local authorities, the Scottish Government will develop further guidance, in the form of an enforcement 'toolkit,' to help the enforcement authorities in the discharge of their duties.

Longer-term, we will continue to engage with local authorities around whether additional resource would be required to support EPC enforcement activities should any mandatory standards around energy efficiency and / or clean heating be introduced.

UK, EU and International Regulatory Alignment and Obligations

Internal Market/ Intra-UK Trade

The EPC assessor market operates across the UK and is covered by relevant provisions in the UK Internal Market Act (IMA) relating to mutual recognition of both "services" and "professional qualifications and regulation"^[13]. However, legislative competence for EPC regulations is devolved to the Scottish Parliament. We do not anticipate the proposals set out within this consultation would have any IMA impacts, and as set out in the Government Response to the 2023 consultation^[14], the Scottish Government will work with the UK Government and other devolved administrations to agree a common approach to issues around skills and qualifications, given that these are covered by UK internal market legislation.

The proposals in this technical consultation ensure that the EPC regulatory regime in Scotland continues to, as far as possible, share technical and operational infrastructure with the UK Government and across the UK market. This will mean that the Scottish EPC Register will link to the UKG cloud calculation service, and the Scottish EPC Calculation Methodology will be based upon the UK Home Energy Model and SBEM. EPC assessors and Approved Organisations will continue to be able to operate across the Scottish market.

The difference in fees charged in Scotland reflects the higher operational costs of administering the EPC system in Scotland – however, the increase is lower than would have been the case had elements in Scotland (i.e. the Register and Calculation Methodology) been funded exclusively by Scottish fees (with no sharing of infrastructure across the UK). We estimate that this would have added an additional £0.6m per annum of running costs and would have resulted in higher fees.

It also reflects our commitment to maintaining EU alignment through the provision of the independent Audit & Inspection function, which we believe will enhance the quality of EPCs for consumers and result in greater confidence and trust that they are receiving an accurate Certificate that reflects the true energy performance of their property.

International Trade Implications

None.

EU Alignment consideration

The Scottish Government has made a commitment to maintain and advance the high standards that Scotland shares with the EU. The principal legal instrument by which the EU sets out its standards for EPCs is the Energy Performance of Buildings Directive (EPBD).

The EPBD was first adopted in 2002, introducing policies and measures needed to comply with the Kyoto Protocol. The objective of the Directive was to promote the improvement of the energy performance of buildings. Measures included the introduction of EPCs across the EU for all buildings sold, leased, or newly constructed.

The Directive was recast in 2010, updating its ambition and scope by enhanced requirements for EPCs, the accreditation of EPC assessors, and the introduction of independent control systems for quality assurance of EPCs.

Implementation of the EPC elements of the Directive in Scotland to date has been primarily the Energy Performance of Buildings (Scotland) Regulations 2008^[15], made through the European Communities Act 1972(a). Transposition of relevant EPC provisions in the 2018 recast of the Directive took place prior to EU Exit and it forms part of the body of 'assimilated' Law (the new name for retained EU law). Powers now exist under Part 10 of the Energy Act 2023^[16] to make new EPC regulations.

The EPBD has now been recast again in April 2024 and includes measures to help ensure consistent high quality EPC assessments and encourage energy efficiency improvements. Measures in the EPBD which relate to EPCs include increased reliability, quality, and digitalisation of EPCs to maintain high quality EPCs. The recast EPBD also introduces the need for enhanced independent verification of energy assessments, including through on-site audits. The EPBD also calls for digital data collection and sharing, to improve knowledge on the building stock and awareness on energy consumption in buildings

EPC Reform will enable the Scottish Government to maintain broad alignment with the main provisions and outcomes of the EPBD in relation to EPCs.

EPCs remain part of the body of EU law retained on EU exit day, where Scotland already aligned with the EPBD. The new legislation we are introducing will continue to maintain the body of EU law that we inherited, and will be enhanced with new requirements which aim to align with changes made to the Directive when it was recast in 2024.

Legal Aid

No part of these proposals will create a new procedure or right of appeal to a court or tribunal, or any change in such a procedure or right of appeal.

Digital impact

These changes would not have any impacts on the use of digital technology. EPCs are already accessed via a website. This website will be updated, modernised, and developed to meet the latest accessibility standards, in line with the Scottish Government's Response to the 2023 consultation on EPC Reform.

Business forms

It is not envisaged that these proposals will create any new business forms. As noted earlier within this BRIA, we will work with our AOs during the development of the on-site audit proposals to minimise any potential future administrative burden (including new business forms) placed on businesses.