Executive Summary

Our Statutory Role

1. A statutory function of the Scottish Fuel Poverty Advisory Panel is to scrutinise Scottish Government progress made towards achieving Scotland’s fuel poverty targets, the likelihood of these being met and the extent to which the four drivers of fuel poverty are being addressed, as defined in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019. This report is in response to the Scottish Government’s first triennial Periodic Report, ‘Tackling Fuel Poverty in Scotland; Periodic Report 2021 – 2024.

Fuel Poverty Environment

2. Fuel poverty and extreme fuel poverty levels have increased significantly since the statutory targets were set. In 2019, an estimated 24.6% of households were in fuel poverty, in 2023 this was estimated to be 34%. In evaluating progress towards the fuel poverty targets and the extent to which the four drivers of fuel poverty are being addressed, we also recognise that some key policy, regulatory, fiscal and market levers sit outside the Scottish Government’s devolved powers. We also recognise the profound shift in the energy landscape since 2019. Given the current levels of fuel poverty, in the Panel’s opinion, tackling fuel poverty should be a greater priority now than it was when the Act was passed by the Scottish Parliament. Yet in comparison to other policy areas with statutory targets – child poverty and climate change – the Panel believes that fuel poverty has not seen the required level of strategic prioritisation.

Fuel Poverty Strategy

3. The Panel has previously offered advice on deficits in the current Fuel Poverty Strategy, which impact on periodic reporting, and how these might be addressed. Given the changing landscape, there is a pressing need to refocus and ramp up devolved government action commensurate with the increased scale of the fuel poverty challenge, and to bring the statutory targets back into view. The Panel strongly recommends that the Scottish Government should now take steps to deliver its commitment made in February 2024 to revise the Strategy by the end of 2026. The Periodic Report does not mention this Ministerial commitment and the underlying statutory requirement to review the Strategy. This updated Strategy needs to be in place to ensure a clear fuel poverty reduction plan prior to the 2030 interim target.

Monitoring and Evaluating progress

4. When the Strategy was published, there was a commitment to have a monitoring and evaluation framework in place by 2022. The failure to develop an appropriate monitoring and evaluation framework makes the efficacy of actions and progress hard to assess. It also makes it extremely challenging for the Panel to objectively assess the policy and funding impacts set out in the Periodic Report, and to fully scrutinise the Scottish Government’s progress towards delivering Scotland’s fuel poverty targets and the extent to which the four drivers of fuel poverty are being addressed. This has compromised the Panel’s ability to assess the Scottish Government’s progress.

Meeting the Targets

5. The Panel’s view is that given the escalation in fuel poverty rates and evidence presented in the Periodic Report, the legally-binding 2030 interim fuel poverty target – which is only just over 5 years away – is extremely unlikely to be met. The Panel notes that this lack of confidence in achieving the 2030 target also raises concern about meeting the subsequent 2035 and the final 2040 target. The 2040 target, although still in sight, will be a challenge requiring a new strategic approach and greater strategic prioritisation. We also advise that the Scottish Government should be open in its assessment of whether the statutory targets are achievable.

Addressing Fuel Poverty Drivers

6. The Panel finds that it is not possible to assess the extent to which the four drivers of fuel poverty are being addressed because the Strategy, and therefore Periodic Report, did not clearly define outcomes at the outset, there was insufficient assessment of weighting and prioritisation of the fuel poverty drivers, and a lack of assessment of the impact of interventions on fuel poverty levels and targets.

• The Panel acknowledges the investment in improving the energy efficiency of housing and that there is a measurable improvement in Scotland’s housing stock – with 56% of homes rated EPC band C or better in 2023 – an increase of around 3% from 2022. However, the Panel’s view is that the rate of energy efficiency improvement needs rapid acceleration and uplift to support the achievement of the fuel poverty targets.
• The Panel notes that there is significant Scottish Government financial support to increase the income of low-income households and to reduce household expenditure, with some interventions directly related to annual assistance with energy costs. However, the Panel questions whether many of these interventions, cited in the Periodic Report, do in fact contribute to addressing fuel poverty and therefore to meeting the fuel poverty targets.
• The Panel notes that high energy prices are the key driver of increases in fuel poverty, and most of the related levers are not in the Scottish Government’s control. The Panel’s view is that the Scottish Government should position its revised fuel poverty strategy and actions in the context of continuing high energy prices accompanied by dedicated evidence and advocacy positions to leverage its influence on the UK Government.
• The Panel is of the view that how energy is used in the home as a driver of fuel poverty is not well articulated. The Panel would encourage the Scottish Government to reflect on how this behavioural driver is framed, along with the use of research to better understand the factors that influence how energy is used in the home, and through this what action could be taken to support meeting the fuel poverty targets.

Progress on Strategy commitments

7. The Panel recognises that some progress has been made on the Strategic Priority Areas and Actions identified in the Fuel Poverty Strategy to mitigate fuel poverty. However, weaknesses in how the Actions were initially set out, the lack of the required monitoring and evaluation framework for the Strategy and, in the absence of a framework, the use of an inadequate classification of progress, makes their efficacy difficult to assess. The Panel has identified a lack of clear accountability or responsibility for delivery and monitoring and evaluation of the Strategy and that progress reporting on the 55 Strategy Actions is unable to link their contribution to progress on the fuel poverty targets.

8. The Panel notes that there is a lack of Scottish Government progress on research, particularly in relation to the weighting of the different fuel poverty drivers or impacts of new policy interventions on fuel poverty figures. There is a need for deeper ongoing lived experience research, including with households who are benefitting from energy efficiency or fuel poverty support schemes. A better understanding of interventions targeted at the low income, poor energy efficiency and energy use in the home fuel poverty drivers is particularly important.

Revised Fuel Poverty Strategy

9. The Panel recognises that the Periodic Report and our reflections on it represent a significant opportunity to influence the 2026 revisions to the fuel poverty strategy. The Panel advises the Scottish Government that there are key contextual challenges which form the background for this revised strategy, and which should be addressed to create an environment in which fuel poverty targets can be met, namely:

• Accelerating the rate of improvements to the energy efficiency of the housing stock is a prerequisite for meeting the statutory targets and will require increased investment and strong leadership.
• An increased awareness of challenges around how energy is used in the home and taking stock of advice models, their funding arrangements and what works best.
• A fuel poverty delivery plan should be developed to include increasing low household net income as related to the attainment of the fuel poverty targets.
• A clear vision is needed for how the GB energy market could operate. Collaborative working is needed, and the Scottish Government should advocate for the reforms which are not only in the best interests of consumers in Scotland – but will also benefit those in, and at risk of, fuel poverty.
• The Panel would also recommend that island and remote rural communities have a specific, more focused and co-ordinated, approach for tackling fuel poverty with clear leadership and enhanced resources.

10. The Panel offers 9 recommendations to the Scottish Government on developing a revised fuel poverty strategy and working towards achieving the fuel poverty targets. These include beginning work promptly to ensure a robust revised strategy, with a delivery and resource plan, produced in consultation with key stakeholders, is in place by December 2026. A clear governance structure to oversee the delivery plan, and a monitoring and evaluation framework to enable its impact on progress towards the fuel poverty targets to be measured, should also be put in place. The policy co-dependencies with other Scottish Government statutory targets – Child Poverty, Climate Change and Heat Networks’ output – will need to be included to show how and to what extent they are contributing to fuel poverty targets too. The strategic approach to influencing on reserved issues should form part of the delivery plan. A research approach should underpin the Strategy to support the weighting of the different fuel poverty drivers and to inform understanding of fuel poverty experience.

RECOMMENDATIONS TO THE SCOTTISH GOVERNMENT FOR DEVELOPING A REVISED FUEL POVERTY STRATEGY

Recommendation 1: The Scottish Government should be transparent on whether the current Strategy can make the necessary progress towards meeting the legislative targets. The revised strategy needs to build from this point.

Recommendation 2: Development of the revised strategy should not be delayed beyond 2026. Planning for a strategy review should commence immediately. The groundwork needs to start now with priority given to developing a programme for stakeholder consultation and reviewing the effectiveness of the current delivery frameworks and their ability to respond to the step change required. A commitment to a strategy review would mean that any further work on the monitoring and evaluation framework under development would include only the most impactful actions in the current strategy.  

Recommendation 3: A strategic governance model should be adopted including clear accountability and responsibilities for fuel poverty in Scotland, with one fuel poverty reduction delivery plan, everybody knowing what they are doing to deliver, and what gaps remain.

Recommendation 4: A revised strategy should make clear where policy dependencies exist across the fuel poverty landscape (e.g. child poverty, climate change, heat in buildings and health), that policy and strategy co-dependencies need to be aligned, and that a formal governance structure exists to facilitate co-delivery including oversight of the fuel poverty reduction plan.

Recommendation 5: A revised strategy should give equal attention to all fuel poverty drivers, making clear their relationship to the fuel poverty definition, relative weighting in terms of impact on fuel poverty outcomes, and key devolved powers available to address them.

Recommendation 6: A revised strategy should include a resource plan for the period of the strategy linked to outcomes, presenting an opportunity to bring a strong focus to the fiscal levers and policies. This includes (a) specifying clearly whether this funding is a fuel poverty measure (not related to another catch all policy action), (b) clearly stating spending targets, and (c) evidencing that the funding is sufficient.

Recommendation 7: A revised strategy should develop and embed a robust monitoring and evaluation framework at the outset learning from the experience of the current Strategy.

Recommendation 8: A revised strategy should set out a clear, evidence-led, strategic approach to influencing reserved issues as support and resource prioritisation by the UK Government will be key to delivery. This includes prioritising a strong, collaborative relationship with the UK Government.

Recommendation 9: A revised strategy should set out how the five yearly strategy revision timetable corresponds with the 2030, 2035 and 2040 fuel poverty targets, and the triennial periodic reporting of progress. This would bring coherence to strategic planning, delivery and reporting, and support governance of fuel poverty policy.