Scottish Fuel Poverty Advisory Panel Advice to the Scottish Government

1. Advice Title: Initial Advice to the Scottish Government

Date: March 2023

Key Recommendations:

• Theme 1: Optimise Advice Agencies’ delivery to mitigate the impact of rising energy prices, and other cost of living challenges, on households. (Recs: 1-4). Advice agencies are a crucial part of frontline support to those in fuel poverty. Action is needed, both tactical and strategic, to enable them to tailor services according to local needs and to be supported in this by both government and commercial companies.
• Theme 2: Protect those suffering fuel poverty, and those at risk of entering fuel poverty, from its long-term effects (Recs 5-8). There are opportunities to leverage good practice (e.g. operation of the Fuel Insecurity Fund) to make access and distribution of funding simpler to households who need urgent support adopt a cross-sector approach to fuel poverty mitigation, such as the Warm Homes Prescription Model, laying the ground for more joined up and effective working step up funding for household energy efficiency and regulation, alongside a more nuanced understanding of fuel poverty effects on those who have enhanced needs, self-ration or self-disconnect.
• Theme 3: Continue to advocate for Government funding and policy change to mitigate the escalating disparity between incomes and energy prices (Recs 9 & 10). The Scottish Government should continue to urge the UK Government to uses its powers to support the financially vulnerable, as well as ensuring that it uses its own powers to optimum effect. It should also press the UK Government to reform the energy market, using its influence, to help secure freedom from future fuel poverty brought about by high energy prices. The Scottish Government should also consider what more it can do to simplify the funding landscape; support joined-up working; regulate, and promote research, in order to respond to immediate vulnerability and secure more energy efficient homes for the future.
• Theme 4: Monitor and evaluate the Fuel Poverty Strategy (Rec 11). The Scottish Government should develop a monitoring and evaluation framework for the Fuel Poverty Strategy and undertake renewed estimates of levels of fuel poverty.

2. Advice Title: Scottish Recommendations for a Social Tariff

Date: August 2023

Key Recommendations:

1. The Panel recommends that the UK Government should introduce a comprehensive and flexible social tariff to replace the Warm Homes Discount. This should form part of a new approach to provide financial support for energy bills for low income, vulnerable and disadvantaged households to ensure that they are able to sufficiently heat their homes and access required energy services. Such a social tariff should aim to reduce levels of fuel poverty and eradicate extreme fuel poverty; protect health and address inequalities by ensuring everyone has satisfactory levels of energy provision, comfort, and warmth.
2. To substantially reduce levels of fuel poverty the Panel recommends a flexible social tariff that reduces the energy costs of eligible households. Those in greatest need should receive a tariff that covers a significant unit rate discount and all of their standing charge.
3. The Panel recommends that anyone on means tested benefits should be automatically eligible to receive a social tariff. This will include households on Universal Credit, Housing Benefit, Pension Credit, income-related Employment and Support Allowance (ESA), income-based Jobseeker’s Allowance (JSA) and Income Support. We also recommend a second route where a household can apply and receive the social tariff even if they do not qualify for the means tested benefits above but nevertheless are likely to suffer some detriment if support is not available.
4. The value of the tariff’s discount should recognise different definitions of fuel poverty across the UK and ensure that the value of each household’s discount is determined by the price of energy and the household’s individual circumstances.
5. The Panel recommends that the tariff’s discount amounts are set by Ofgem or an independent body and are set with reference to closing the Scottish public’s fuel poverty gap.
6. The Panel recommends that the UK Government administer eligibility criteria for the social tariff to ensure consistency and appropriate accountability. The necessary assessment of eligibility can be achieved quickly by the UK Government through linking HMRC, Department of Work and Pensions, and energy usage data. The UK Government should also be responsible for maintaining a clear and transparent process where people who miss out on receiving the social tariff can understand why, and / or appeal. Energy suppliers could then be made responsible for delivering the scheme. In the longer term, the system should also include a home’s energy-efficiency information.
7. It is the Panel’s view that the level of meaningful financial assistance required to support households’ energy costs cannot be funded simply through levies on bills. The Panel recommends that the costs of a social tariff are covered through general taxation. We believe that the costs could be offset by: reviewing the non-targeted non-taxable status of the Winter Fuel Allowance; and ringfencing taxation from the energy sector.

Finally, the Panel recommends that the Scottish Government considers reforming the current Winter Weather Payments and considers developing a Scottish Energy Supplement on top of any social tariff to address any specific circumstances in Scotland not covered sufficiently by any successor to Warm Home Discount.

3. Advice Title: Recommendations to the Scottish Government on its Fuel Poverty Strategy

Date: September 2023

Key Recommendations:

The SFPAP’s recommendations to the Scottish Government on its Strategy update:

• Recommendation 1 – The SFPAP recommends that the Scottish Government should complete its required 5-year review of the Strategy by the dissolution of this parliament in May 2026.
• Recommendation 2 – The SFPAP supports the Scottish Government’s intention to complete an interim
  update to the Strategy this year. The SFPAP advises the Scottish Government to include a strategic delivery plan in this update.
• Recommendation 3 – As part of the Strategy update, SFPAP recommends that the Scottish Government adopt an outcomes-centred approach which underpins the strategic vision of eradicating fuel poverty – enabling a clear line of sight between the vision and the actions needed to realise it.
• Recommendation 4 – As part of the Strategy update, SFPAP recommends that the Scottish Government map the high-level policy landscape for those policies directly supporting the delivery of fuel poverty targets – those which fall both within devolved competence and those which are reserved.
• Recommendation 5 – The SFPAP advises the Scottish Government to set out and test the relative impact of the drivers of fuel poverty in achieving both the interim – 2030 and 2035 – and the 2040 statutory fuel poverty targets in its Strategy update.
• Recommendation 6 – In updating the Strategy, the SFPAP advises that the Scottish Government maximise the potential to work with the SFPAP in 2023/24 to increase the understanding of fuel poverty through the creation of a joint research plan. This plan, with supporting funding, will facilitate the building of a holistic, national
  evidence base which will provide consistent and robust fuel poverty data over the lifetime of the targets.
• Recommendation 7 – The SFPAP advises that the Strategy update should review the investment needed to improve the energy efficiency of homes and develop an accelerated rolling 5-year programme with measurable outcomes.
• Recommendation 8 – The SFPAP advise that the Strategy update should consider a capability mapping and how sector-wide organisations and NGOs committed to tackling fuel poverty – across housing, energy, and advice sectors – can be leveraged to support the delivery of fuel poverty targets.
• Recommendation 9 – The SFPAP recommend that the Strategy update should explore the value in building on the Scottish Government’s Energy and Anti-Poverty Summits to create effective collaboration and a partnership approach to support delivery of the Fuel Poverty Strategy.
• Recommendation 10 – The SFPAP advises that the structural importance of advice and advocacy in tackling fuel poverty needs greater emphasis in the Strategy update. The Panel reiterates its October recommendations and suggests that these are built into the plan for delivering the Strategy to give the advice and advocacy sector stability.
• Recommendation 11 – The SFPAP advises that the Strategy update should bring a stronger focus to the opportunities which the Scottish Government has to influence the UK Government on energy market reform to protect low-income households.
• Recommendation 12 – The SFPAP recommends that the Strategy update should bring a stronger focus to the opportunities which the Scottish Government has to influence the UK Government on social tariffs.
• Recommendation 13 – The SFPAP recommend that the Strategy update should include a focus on analysis and identifying eligibility criteria when crisis support is provided. This would enable an assessment of the key Fuel Insecurity Fund, alongside other central and local funds, to identify potential gaps in the targeting of energy cost and managing energy debt financial support.
• Recommendation 14 – The SFPAP recommend that the Strategy update should set out an approach to improving health outcomes for those suffering fuel poverty, such as implementing the Warm Homes Prescription model.
• Recommendation 15 – The SFPAP advise the Scottish Government that, in consultation with the SFPAP, an outcomes-based monitoring and evaluation framework should be created in 2023/24 as part of the work to update the Strategy.

4. Advice Title: Initial response on Scottish Budget 2024-2025

Date: December 2023

Key Recommendations:

• The Panel highlighted its extreme disappointment to hear that the Scottish Government intends to close the Fuel Insecurity Fund (FIF) and make deep cuts to the Housing and Buildings Level 3 budget line from April 2024.
• The Panel urged SG to consider whether any headroom exists to provide support through a slimmed down FIF in 2024/25 to avoid a cliff edge for the people who currently rely on support delivered through the programmes currently sponsored through FIF.

5. Advice Title: Consultation on the Pension Age Winter Heating Payment

Date: January 2024

Key Recommendations:

The Panel’s view is that:

• WFP should be replaced with a well-designed automatically paid, and targeted benefit that supports those experiencing fuel poverty, regardless of their age.
• Energy suppliers should be obliged to use this payment to reduce present and future energy costs, rather than for debt repayment.
• All winter weather payments should be consolidated.
• If this reform is not possible then PAWHP should be targeted at those on Pension Credit, should be aligned with Winter Heating Payment, and should be treated as taxable income, the revenue to which should be used to increase levels of energy support funding in Scotland.

6. Advice Title: Consultation on Heat in Buildings Bill (HiBB)

Date: March 2024

Key Recommendations:

• The Panel urged the Scottish Government to seek directly the view of those with lived experience of fuel poverty. It is essential that fuel poverty is foregrounded in the HiBB. The Panel believe that to avoid unintended consequences, there should be more robust impact assessment undertaken, and mitigations provided where a measure leads to a household being pushed into fuel poverty, either at installation, or within a pre-defined period thereafter.
• The Panel also flagged that the list of energy efficiency measures proposed were too narrow, not fuel poverty focused and do not take account of housing type. The proposals view getting to EPC C as a success, but it is still possible to be in fuel poverty at EPC C.
• It is the Panel’s view that the proposed monitoring and evaluation framework is well thought out and comprehensive. It would, however, benefit from the development of milestones and targets against which progress can be assessed. In addition, the framework could make better use of the third sector as enablers.
• The Panel also asked for clarity on how HiBB proposals will be funded, and whether the proposals exists in the context of business as usual, or if, in fact, they are based on a number of assumptions around energy prices and technology, e.g., smooth network upgrade developments, smooth lifecycle and value chain developments for the technologies in question, decreases in energy prices, etc.
• The proposals are centered on tenure as a means of dividing up the approach and responsibilities, but other options could be considered, e.g. structuring the proposals according to technology, place or housing type.

7. Advice Title: The Scottish Fuel Poverty Advisory Panel Annual Report March 2023 – April 2024

Date: June 2024

Key Recommendations:

The Panel offered views on the Warmer Homes Eligibility Criteria for 2023–2024 – this led to the criteria being broadened to capture those experiencing fuel poverty but not necessarily in receipt of passport benefits.

8. Advice Title: Letter to the Cabinet Secretary for Social Justice on Winter Fuel Payment/Pension Age Winger Heating Payment

Date: September 2024

Key Recommendations:

The Panel suggested that SG should:

1. Take the opportunity of the deferral of PAWHP’s launch to conduct an impact assessment to find out a) What the fuel poverty impact of the proposed model for PAWHP devolution will be on those on low incomes who will no longer receive it, andb) what the fuel poverty impact of choosing a devolved model making PAWHP taxable would mean in terms of fuel poverty alleviation.

Take the opportunity to target the consequentials coming to Scotland (from the
extension of the Household Support Fund) at those living in fuel poverty.

9. Advice Title: Response to the consultation for the first Fuel Poverty Periodic Report

Date: November 2024

Key Recommendations:

It is the Panel’s opinion that to strategically assess progress in achieving Scotland’s fuel poverty ambition some principles are important to ground:

1. There needs to be transparency around the assumptions that were used in the development of the strategy, that details how the 55 actions would contribute to the targets enshrined in law. This would also include details of where the strategic actions were unknown – and for a strategy and vision that stretches over 20 years it would be expected that not all actions would be known from day one.
2. A monitoring and evaluation framework that details how progress is being made against the actions is essential – in both ensuring early sight of any issues or opportunities, but also to provide a foundation upon which an informed assessment of performance and inter-dependencies and likely outcomes can be made.
3. A robust governance structure is needed to drive progress and actions – in particular, when complex strategy cuts across many policy areas and or delivery units or functions, and stretches over many years, or indeed in areas of high levels of change, be it technological, societal or economic.

Without a monitoring and evaluation framework, that provides an objective commentary or assessment on progress, it is impossible to draw any hard conclusions on the impact of interventions and activities. As such, we, the Panel, can only make the following comments based on what we have seen and heard:

4. We see and appreciate the work today on the monitoring and evaluation framework and urge that this is used as an enabler to consider how enhanced governance protocols can be implemented that would in turn drive a greater cross-Governmental focus on fuel poverty. The near absence of any prioritisation or mention of fuel poverty in the Programme for Government appears to place fuel poverty in a secondary position to other poverty-related policies, such as child poverty. We have stated our view before that child poverty cannot be tackled without also tackling fuel poverty.
5. We worry about the increasing proportion of families who find themselves in extreme fuel poverty and how the interventions that are needed to lift them out of fuel poverty altogether will be complex and need to address multiple drivers. A decent quality home in itself does not necessarily mean that people are removed from fuel poverty, which in previous years was more of a certainty.
6. We note the progress being made to improve quality of housing stock across Scotland and note the increasing proportion of homes that are rates A-C from 45% in 2019 to 52% in 2022. We see the potential that can be realised from the Heat and Buildings Strategy and the contribution that this could make to helping achieve some of the statutory targets in the run up to 2040.
7. We recognise that the current Strategy has been overtaken by events, and that a full review is needed, but also that a mid-term prioritisation of some of the strategic actions might have provided increased clarity and focus on those actions that would have had the maximum impact.
8. We recognise the financial challenges around the current budgetary settlement and the tough decisions that can come from this. We also note that to fully address fuel poverty a number of tactical or crisis and strategic interventions are needed, and both should be recognised as important. An over-focus at either end of the scale can result in unintended consequences and it is important to ensure that both are given similar footing i.e. we will support people living in fuel poverty today whilst working on and then implementing the optimum strategic solution that will address some or all of the drivers of fuel poverty. The Warm Homes Prescription trial is a useful example of where a focus on longer term better health outcomes has provided immediate support to keep warm today, enabling those involved to embrace the energy efficiency measures which will help keep them warm tomorrow.
9. We note the focus of Scottish Ministers in influencing their UK counterparts on the importance of specific reserved interventions, for instance the introduction of a wider social tariff and would champion wider collaboration across all nations of the UK where there are areas of commonality or potential for them. It is critical that Scottish voices are heard and are visible when UK policy is being developed.
10. We are struck by the reality faced by many who live in remote rural or island communities who rely on unregulated fuels, or electricity (but not mains gas) for heat and hot water, and the associated costs that are incurred here, alongside at times the absence of decarbonisation solutions that would also reduce total home heating cost.
11. We recognise the real passion to address fuel poverty, across local and national government, the third sector and the wider sector too. All recognise that wider impact that being in fuel poverty has, and the opportunities that removing the risk of fuel poverty will present. Solving fuel poverty in itself isn’t a tough sell – hearts and minds are already there. A re-focussed Strategy that concentrates on the key enablers that address the drivers of fuel poverty in Scotland, will provide the leadership and vision needed as we move to within 15 years of the Statutory target.

On energy efficiency in particular the Panel have said:

• Some progress has been made in improving the energy efficiency of Scotland’s housing stock with 52% of Scottish homes having an EPC rating of C or above in 2022 compared with 45% in 2019. Tackling energy efficiency alone does not insulate households from fuel poverty.
• In 2022-2023, the Scottish Government spent in the region of £162 million on its main energy efficiency schemes for domestic building energy efficiency. A common theme across the literature reviewed and from stakeholders is that, even where funding schemes are well designed and effective, the money available is not enough to match the scale of fuel poverty. Funding programmes may be effective, but it is not necessarily possible to evidence their direct effect on fuel poor households since this is not necessarily measured.
• Develop a stronger focus on improving health outcomes for those suffering fuel poverty, embedding responses such as the implementation of the Warm Homes’ Prescription model to complement investment in the Hospital at Home intervention.
• Increase investment, including leveraging non-governmental investment, ensuring that there is a clear strategy and delivery plan to improve energy efficiency of homes, including a recognition of the structural disadvantage of rurality.
• Scale up the affordable housing programme to speed up improvements in the energy efficiency of Scotland’s housing stock, ensuring that investment in social housing takes a holistic approach to fuel poverty and net zero to ensure a fair transition for those in fuel poverty to net zero.
• Progress has been made around the legislative framework for improving energy efficiency, for example, The Local Heat and Energy Efficiency Strategies (Scotland) Order 202263 and the commitment to introduce a Heat in Buildings Bill in this year’s Programme for Government. However, it is not clear whether the Local Heat and Energy Efficiency Strategies are yet resulting in energy efficiency improvements.
• The Heat in Buildings Strategy is rooted in decarbonisation. Net zero interventions increase the risk of fuel poverty trade-offs.

On crisis funding in particular the Panel has said:

• Crisis funding has a key role to play in the temporary mitigation of fuel poverty and in preventing some households from falling into fuel poverty.
• Specific targeting at vulnerable groups such as households with a disabled child is very effective.
• Crisis funding is an enabler, creating the support network and capacity for those struggling to heat their homes to pursue energy efficiency measures, which has a more permanent effect in reducing and lifting people out of fuel poverty.
• The changes to the Winter Fuel Payment and the loss of the Fuel Insecurity Fund will both impact on fuel poverty levels.
• Ensure that crisis support to reduce energy costs is used for that purpose wherever possible, whilst respecting the dignity of those being supported (Scottish Government analysis has highlighted the tenfold value that is provided by reducing the cost of energy compared to providing an uplift in income to the same value).

On Warm Homes Discount in particular the Panel has said:

• The Scottish Government should use its influence to improve the Warm Homes Discount offering in Scotland, which is less accessible than elsewhere in the UK.

 10. Advice Title: Fuel Poverty Funding Landscape in Scotland

Date: November 2024

Key Recommendations:

• Recommendation 1: Scottish Government should target winter support payments to those most in need and consider paying them to individuals through energy companies to reduce energy costs and to maximise the impact on fuel poverty levels.
• Recommendation 2: The Scottish Government should continue to advocate to the UK Government to introduce energy bill support in the form of an energy discount mechanism, often referred to as a social tariff.
• Recommendation 3: While an energy discount mechanism is being developed, the Scottish Government should urge the UK Government and Ofgem to reform the Warm Home Discount (WHD) by increasing the payment rate and introducing regional variation which also covers the needs of people using unregulated fuels.
• Recommendation 4: The Scottish Government should launch a feasibility study to understand how data could be shared to support automatic WHD payment in Scotland, coordinating this with the UK Government where practicable.
• Recommendation 5: The Scottish Government should ensure that there is always a pot of flexible crisis money targeted at energy costs available, recognising short-term crisis shocks, seasonal factors, and the long-term trajectory of increasing rates of fuel poverty. For example, a fund building upon the learning of the Fuel Insecurity Fund.
• Recommendation 6: The Scottish Government should lead on considering the feasibility of consolidating existing funding for energy efficiency measures in Scotland into a single scheme.
• Recommendation 7: In the interim, the Scottish Government should work with the UK Government to create a central mechanism to facilitate greater synergies between the various capital funding schemes and greater flexibility in their (co-) delivery.
• Recommendation 8: The Scottish Government should create a simple eligibility checker which looks across funding schemes, drawing on the expertise of energy advice agencies, coordinating this with the UK Government, Ofgem, local authorities, and energy companies.
• Recommendation 9: The Scottish Government should work with the UK Government and Ofgem to extend funding windows across all fuel poverty funds to facilitate long term planning and support delivery.
• Recommendation 10: The Scottish Government should ensure that there are consumer protections for anyone who has energy efficiency works undertaken, coordinating with the UK Government.

 11. Advice Title: Matt Cole, Scottish Fuel Poverty Advisory Panel Chair, discusses the Panel’s work on rural and remote fuel poverty

Date: March 2025

Key Recommendations:

• The Panel has concluded that a bespoke approach to the structural disadvantage suffered by rural and remote areas is needed to tackle the fuel poverty these communities experience – the highest in Scotland.
• This will require increased investment, including bringing in non-governmental funding. It will need a clear, focus-solutioned strategy and delivery plan to (at least):
• Improve the energy efficiency of homes as well as to build new energy efficient homes whilst recognising the higher infrastructure costs to achieve this.
• Core funding for, and expanded, locally-delivered energy advice services.
• Regulation of alternative fuel sources to manage price volatility.
• Scalable models for maximising local energy generation benefits.

12. Advice Title: Heat Networks Roundtable

Date: March 2025

Key Recommendations:

Key takeaways from the Roundtable included:

• Heat networks won’t and can’t be a solution everywhere.
• Pricing is a particular issue for heat networks from a fuel poverty perspective.
• Heat networks should not deepen fuel poverty – this is a challenge and improving fuel poverty rates, through heat network development, will be an even bigger one.
• There’s an accountability question when it comes to fuel poverty within the heat network landscape. How is fuel poverty statement compliance to be assured and what sanctions will apply if these are not delivered.
• The heat network policy foundations seem to be strong, but things become much harder as the move from policy to delivery happens.

13. Advice Title: The Scottish Fuel Poverty Advisory Panel – Annual Report 2024-2025

Date: June 2025

Key Recommendations:

The Panel offered their advice to policy leads on the Warmer Homes Scotland (WHS) eligibility criteria, setting out that:

• As we have identified more investment is needed to aid progress in meeting Scotland’s fuel poverty targets, containing the WHS funding demand through narrowing eligibility does not seem like the right approach. Even if the demand then outstrips the funding available: evidence of demand can only add weight to the business case for more budget to be allocated next year – setting a benchmark for future budget allocations.
• There seems to be a lack of alignment between the criteria and the (then) Heat in in Building Bill (HiBB) proposals around linking energy efficiency standards to a series of measures to the EPC rating in the criteria, and HiBB seems to be moving away from the “fabric first” principle while WHS seems to be remaining aligned to “fabric first”.