Foreword from the Chair

This is the second annual report of the statutory Scottish Fuel Poverty Advisory Panel (SFPAP) and is produced and shared so all stakeholders can see the Panel’s priorities, to provide opportunity for comment or feedback, and to identify areas of potential opportunity to collaborate. Fuel poverty can only be addressed through collective action and collaboration, and we continue to raise the profile and impacts of fuel poverty to help build the consensus for change.

The Panel’s view is that fuel poverty is not inevitable, and policy choices can be made which would mitigate and ultimately eradicate fuel poverty. We also recognise, however, the continued impact of global political and economic uncertainty and the consequences that this has had for energy affordability, and for fiscal and policy levers, as well as the potential longer-term impacts at both a micro and macro level.

In Scotland today, 34% of households are estimated to be in fuel poverty of which 19.4%[1] meet the extreme fuel poverty definition. But behind every percentage figure there is a household, a family, or an individual and so in real terms, around 861,000 households in Scotland are in fuel poverty, with 491,000 of these being in extreme fuel poverty. This is an increase of 3% of households living in fuel poverty in Scotland since our annual report last year and means that over a third of Scotland’s households today are struggling to heat and power their homes.

The Panel has heard some of their stories during the course of our work over the last year. Including the person in the Western Isles with hypothermia induced by self-disconnection their heating because they do not have the money they need at hand to pay their latest electricity bill. And from families living in tenements who only heat when their children are at home. And those, on low incomes, living in temporary accommodation and stuck paying the highest energy tariff which they have no power to change. It is all too easy, however, for a disconnect to develop between the macro environment and policy development and the day-to-day reality of living in fuel poverty, and so we have and will continue to live our principle of listening to the voice of lived experience of fuel poverty.

The last year has been one of change with a new First Minister here in Scotland and a new government at Westminster. Sustained high energy prices, the scale of energy debt and a slower than expected drop in inflation, along with the First Minister’s principal priority of tackling child poverty and the UK Government manifesto commitments on energy, has kept the cost of energy in the headlines. There has been a UK-wide conversation over the last year about energy affordability in both the current and future energy landscape, and we have sought to influence this in our work during this year. We have engaged in Ofgem and UK Government consultations with implications for energy affordability. We have consistently advocated for the introduction of an energy discount mechanism and have supported the Scottish Government in its work on this too – I participated on behalf of the Panel in the Ministerial Social Tariff Working Group.

Our April 2024-March 2025 workplan was our first formal workplan since our appointment:

During this year we explored aspects of the fuel poverty experience in rural and remote communities, concluding that a unique approach is needed to address the structural disadvantage suffered by rural and remote areas.
We also looked at health vulnerabilities exacerbated by cold and damp homes. We were very interested to learn about the wellbeing social value (a £5.10 return on investment to society for every £1 spent[2]) of the Warm Homes Prescription approach. It presents a model for how preventative spend to prevent negative outcomes – a foundational principle of The Christie Commission[3] and crucial to public service reform – can improve the lives of those in fuel poverty while also, offering the promise of long-terms savings to the public purse.
We have considered some of the implications of energy system reform – how heat networks as a decarbonising heat source will not be beneficial for those in fuel poverty unless pricing and support for vulnerable consumers is built into business models at the outset.
We have also looked at the fuel poverty funding landscape and made recommendations to the Scottish Government on both tactical and strategic improvements which they could make and or influence.
Our reflections on what we have heard and learned have also informed our response to the Scottish Government’s invitation to provide feedback to aid the production of its first Periodic Report. This details their progress in achieving the statutory fuel poverty targets and was published at the close of the 2024-25 year. The Panel will now spend some time reviewing the Report and engaging with stakeholders and will formally provide a response by the end of the summer.

Our driving aim is to bring value through our work to the complex question of how to address fuel poverty. We remain determined to continue this and to suggest and support changes to protect those in, and on the edge of fuel poverty, both now and in the future from the “new normal” of high energy prices and income erosion, and ensuring that our housing stock does not deepen fuel poverty, but is rather an enabler to help move people out of fuel poverty.

I would like to take the opportunity to also recognise the often unsung work that happens day in, day out, and across Scotland, by fuel poverty practitioners, professionals, and volunteers who are striving to alleviate the immediate impacts of fuel poverty whilst identifying any strategic levers that may address any longer-term drivers. They see first-hand the need that remains and the potential that is lost when people continue to live in fuel poverty and can articulate clearly the level of change that is needed and the benefits that this will bring.

As ever, I welcome any feedback or perspective that you might want to share and can be contacted at enquiries@fuelpovertypanel.scot.

Matthew Cole

Scottish Fuel Poverty Advisory Panel – Chair