Winter Heating Payment (Low Income) (Scotland): island communities impact assessment

Cost of Living

25. The cost of many amenities and activities are higher for people living in island communities than those living on the mainland. A lack of choice, greater distances, remoteness and accessibility means that shopping, energy bills, travel, postage, mobile phone services and broadband can be more expensive for people living in island communities compared to those on the mainland. A typical food basket can cost as much as 50% more on island communities in Scotland, while transport can be up to £40 a week more expensive due to longer distances for commuting and a higher price for petrol^[11].

26. Local authority Comhairle Nan Eilean Siar have previously stated in their written evidence to a fuel poverty strategy consultation undertaken by the Scottish Government, "it is essential to factor in higher living costs to an understanding of poverty in remote and rural areas. Poorer households in the islands are likely to be significantly worse off financially than an equivalent-earning mainland household because of the higher cost of living"^[12].

27. This sentiment was echoed by Stornoway stakeholders, who highlighted extreme fuel poverty levels as one of the main challenges of the islands^[13].

28. There are a higher proportion of dwellings off the gas grid in island communities: 50% in Argyll and Bute; 88% in Na h-Eileanan Siar; 100% in Orkney and Shetlands; and 61% in Highlands; compared to 17% Scottish average (2017-2020 figures)^[14]. Off-gas grid properties have a more limited set of alternative fuel suppliers, constraining the ability to deliver reduced heating costs.

29. A higher proportion of dwellings with 3 or more bedrooms in Na h-Eileanan Siar (69%), Highland (62%), Orkney (69%) and Shetland (68%) compared with the national average of 50%^[15], means higher fuel bills and potentially greater costs to improve the energy efficiency of these homes. Larger dwellings also necessitate higher fuel bills to reach requisite comfortable ambient temperatures^[16].

30. A range of work is being undertaken by the Scottish Government to address the challenges that people in island communities face. For example the Islands Strategic Group was established in August 2016. The group considers strategic issues affecting the island communities of Scotland, and to ensure greater involvement of the relevant councils in helping to identify and design solutions to the unique needs and challenges these communities face.

31. We recognise that fuel costs are on average higher for island communities and that this payment does not adjust for this factor. Nevertheless, we believe that the particular challenges for island communities are better addressed by this new policy. The introduction of the WHP will provide each eligible islander with an annual guaranteed payment of £50, which they can use towards their fuel costs.

32. We have made a commitment to explore the feasibility of bringing forward the payment date in future years which will help better support those living in islands communities but we are unable to do so for winter 2022-23.