Warmer Homes Scotland programme: annual review 2018-2019

Part 1: Introduction and Background

Warmer Homes Scotland is the Scottish Government’s national fuel poverty scheme and is one of a range of schemes funded and delivered by the Scottish Government. It has a strong focus on heating and insulation measures to improve the energy efficiency of homes and make them more comfortable and affordable to heat. The scheme is at the forefront of the Scottish Government’s efforts to tackle fuel poverty and focuses on providing eligible households who are living in, or at risk of fuel poverty, with a range of energy efficiency measures suitable for their property. These include insulation, heating, renewables and micro-generation measures which also help in the process of decarbonisation of heating systems contributing to meeting the Scottish Government Climate Change targets.

Warmer Homes Scotland is now in its fourth year of operation having been launched by the First Minister in September 2015. Following an open procurement process, Warmworks Scotland LLP was appointed by the Scottish Government to manage the contract on its behalf.

Warmworks is a joint venture partnership that was formed in 2015 specifically to tender for and deliver the Warmer Homes Scotland contract. The joint venture partners are the Energy Saving Trust, Changeworks and Everwarm. Warmworks is responsible for the full Warmer Homes Scotland customer journey from the initial survey stage through to the after care service following the installation of measures available under the scheme.

During the period of this review, which details the progress and achievements of the scheme during the financial year from 1 April 2018 to 31 March 2019, Warmer Homes Scotland helped 3,818 customers, who benefited from the installation of 10,558 separate measures, giving them an average saving of £313 off their annual fuel bills.

The overall objectives and guiding principles for Warmer Homes Scotland were created as part of the design and implementation process for the scheme and these are an important part of how the success and achievements of the scheme are evaluated.

The stated objectives of Warmer Homes Scotland are to:

• reduce fuel poverty by reducing heating costs to vulnerable households;
• contribute to a reduction in the emissions of carbon dioxide from Scottish homes;
• improve Scotland’s housing stock;
• offer good value for money by leveraging additional funding into the scheme; and;
• provide benefits to the wider community through vocational training and employment opportunities.

The basic guiding principles of the scheme are that:

• It should be customer focussed and provide a first class service to customers regardless of where they live;
• It should set high standards in terms of quality and health and safety, even going beyond industry norms;
• It should encourage the involvement of local SMEs as far as possible; and
• Its impacts should be long term and sustainable.

Warmer Homes Scotland was also designed to contribute to the Scottish Government’s five National Objectives and the overarching purpose of sustainable economic growth. (See Figure 1). These National Objectives have since been updated and replaced by the National Performance Framework and National Outcomes which was launched in June 2018. Warmer Homes Scotland continues to contribute to the National Outcomes outlined in this National Performance Framework.

At the end of January 2019 Ministerial consent was given to extend the Warmer Homes Scotland contract to allow Warmworks to continue to deliver the scheme on behalf of the Scottish Government for a further 2 year period from 1 September 2020 to 31 August 2022. Extending the contract for a further 2 years will allow the Scottish Government to continue to offer a national fuel poverty scheme throughout the transition phase of Energy Efficient Scotland.

Energy efficiency is a priority of the Scottish Government and has been designated as a National Infrastructure Priority in recognition of its importance. The cornerstone of this is Energy Efficient Scotland which was launched in May 2018. It is a co-ordinated programme to improve the energy efficiency of homes and building in the commercial, public and industrial sectors.

Energy Efficient Scotland will provide funding through schemes such as Warmer Homes Scotland to vulnerable households to ensure that those who are living in or at risk of fuel poverty can access the assistance they need during the transition period while the programme is being developed. In addition, Energy Efficient Scotland will seek to leverage in private finance to help develop a loan scheme to help households and businesses spread the upfront cost of investing in energy efficiency.

During the course of the 2018/19 operating year the Scottish Government and Warmworks had to assess the potential implications of the UK leaving the European Union and the wider issues of the supply of measures to ensure that the delivery of Warmer Homes Scotland continued throughout any disruption to supply chains this has the potential to cause.

The supply of boilers and other materials installed under Warmer Homes Scotland was highlighted as a key concern as although they are assembled in the UK, many components are manufactured in Europe. Warmworks has had early and open dialogue with supply chain partners around any potential supply chain disruption to ensure that increased storage capacity is available for Warmer Homes Scotland measures to ensure that delivery of the scheme is not disrupted. The costs of the additional storage is acceptable to and being shared by the Scottish Government.

To mitigate against any potential disruption to the delivery of Warmer Homes Scotland, the main supply chain increased storage capacity to ensure a continuous supply of all measures offered under the scheme is available.

Scope

As set out in the Terms of Reference the scope of this review is linked to the overarching objectives of Warmer Homes Scotland.

The review determines if the scheme is on track to meet its stated objectives and establishes if there are any areas where progress is not being made or where the work being carried out is not aligned to the overarching national objectives. The review also includes recommendations to ensure the stated objectives are on track to be met. In addition, the review also establishes progress in implementing the recommendations made in the 2017/18 review. Where progress has not been made or is limited, the review should make further recommendations to ensure that the required improvements are on track to be met.

A copy of the Terms of Reference can be found at Appendix 1.

Methodology

Data and evidence was obtained from various sources including Warmworks, Home Energy Scotland, the results of the audits carried out by Pennington Choices, the Scottish Government’s appointed independent auditors for Warmer Homes Scotland, and the review team’s own investigations. This data was both quantitative and qualitative in nature. To ensure consistency of approach, the data was analysed following the same methods used in previous Annual Reviews of the scheme.

As Warmer Homes Scotland did not operate for the full 2015/16 year, it was decided at that time that more meaningful conclusions could be drawn from the data if comparisons were made in percentage terms rather than on a purely numerical basis. This convention has continued in all subsequent reviews.

Data Sources

Figure 2 - Qualitative data sources

Data

Information from Warmworks, Energy Saving Trust and Pennington Choices was analysed to establish scheme progress and achievements and make supporting recommendations for the 2018/19 review.

Inpections

Information gathered from the outcome of the audit process was used to establish the effectiveness of the Inspection process.

Customer Service

Information gathered from the outcome of the audit process was consolidated with the Key Performance Indicators, information from complaints and survey results to provide an overview of customer service levels being achieved in the delivery of Warmer Homes Scotland.