Introduction

In Scotland 34% of all households are estimated to be in fuel poverty. This equates to around 861,000 households. 19.4% (or 491,000 of the 861,000 households in fuel poverty) are recognised as being in extreme fuel poverty, and the median fuel poverty gap is £1,250^[1]. This is a rise from the fuel poverty figure in the previous Scottish House Condition Survey, which drew on 2022 data, where 31% were estimated to be in fuel poverty, the extreme fuel poverty figure was similar to the 2023 one. The disaggregation of the 2023 data shows the harsh reality of the increase in fuel poverty rates for those on below average incomes and certain household types. In 2023 fuel poverty amongst those with an annual income less than £15,000 and those earning between £15,000 and £24,999 increased compared with 2022. 96% of households with an annual income less than £15,000 were in fuel poverty in 2023 (89% in 2022), and 58% of households earning between £15,000 and £24,999 were in fuel poverty in 2023 (43% in 2022)[2]. It is clear that some household types are more likely to be in fuel poverty. In 2023, families (34%) have similar rates of fuel poverty to older households (37%), but older households have higher rates of fuel poverty than other households (32%). Alongside these rising fuel poverty rates, energy debt has also risen – with the latest figures reported by Citizens Advice Scotland, showing that the average energy debt of people they see is around £2,500 which rises to £3,130 in rural and remote rural areas. The total UK energy debt is approaching £4 billion[3].

High energy prices have been the primary driver of these increases in fuel poverty. Recent figures show that although prices have continued to fall from their peak in 2022, under the April to June 2025 price cap prices are still 52% higher than in winter 2021/22[4]. As we, among others, have noted elsewhere[5], the price cap can mask the true reality of energy bills for those using electric heating systems. Typical Domestic Consumption Values used in calculating the price cap are unrepresentative for those using electric heating as their main heat source[6]. And whereas 97% of those in urban areas are within coverage of the gas grid, only 55% of those living rurally can access the gas grid[7] and therefore must use electric heating or alternative fuels.

Furthermore, the price cap does not cover the costs of alternative (unregulated) fuels where volatile pricing is a challenge for those who depend on them for heat. The reality is then that the 52% increase in energy prices since winter 2021/22, based on the price cap, will be even higher for many households in Scotland. Since the energy crisis, fuel and extreme fuel poverty rates have risen from 24.6% of households, with 12.4% in extreme fuel poverty in 2019, to 34% in fuel poverty and 19.4% in extreme fuel poverty in 2023.

This increase in the number of households living in fuel poverty has happened against a backdrop of UK and Scottish governmental interventions to support consumers with their energy bills – including the Energy Price Guarantee (Oct. 2022- March 2024) Energy Bills Support Scheme and the Energy Bills Support Scheme Alternative Fund (winter 2022-23)[8], Cost of Living Payments (2022-2024)[9] and crisis support through the Fuel Insecurity Fund[10]. And, also through a raft of strategies and policies such as continued funding to improve the energy efficiency of the housing stock, policy development and initiatives to support the step change needed for net zero, as well as income measures to support those in poverty.

The fact that this this market intervention and unprecedented consumer energy support[11], did not come close to keeping fuel poverty levels at pre-energy crisis levels, and the ongoing range of policies – income and energy efficiency measures – has not managed to impact the headline fuel poverty figures shows how difficult and complex it is to resolve fuel poverty. Of the four key drivers of fuel poverty in Scotland, the relationship of household income and energy prices has proved the biggest obstacle in tackling fuel poverty, with energy prices increasing significantly while incomes are being squeezed.

It is in this context of the energy crisis and the related cost of living challenge, that the Scottish Government has published the first Tackling Fuel Poverty in Scotland: Periodic Report 2021-2024, covering progress since the publication of Tackling fuel poverty in Scotland: a strategic approach at the end of 2021.

The Scottish Government has recently stated its intention to take a different approach to its important Heat in Buildings Bill, signalling a desire to integrate the fuel poverty and net zero policy objectives more closely, and an acknowledgement of the real affordability challenge of installing and operating low carbon heating systems. It has also recently launched a consultation on mitigating the two child cap which the evidence suggests would be a significant step in reducing child poverty[12]. These policy shifts have implications for the approach to tackling fuel poverty in Scotland. There are also shifts happening in the wider UK with the UK Government’s efforts to speed up the energy transition through fast-tracking projects which contribute to the 2030 Clean Energy Target and its introduction of a Planning and Infrastructure Bill. At the same time there is a stronger focus on consumer affordability as Ofgem grapples with unprecedented consumer energy debt and the energy affordability challenge. The UK Government too is focussing in on affordability as it proposes a foundational pillar of energy affordability to underpin England’s new Fuel Poverty Strategy which would certainly have implications for Scottish households too. The Scottish Government, drawing on the recommendations made by this Panel and the findings of its Social Tariff Taskforce of which we are a member, is working to influence the consumer affordability debate and advocating for a flexible energy discount mechanism.

It is in this context of what, increasingly looks like an entrenched fuel poverty figure of around a third of Scotland’s households in fuel poverty (with around half of these in extreme fuel poverty) and evolving policies on net zero and how to achieve it while maintaining energy affordability, that we are setting out our workplan for this year. We look back to the first three years covered by the Periodic Report and forward to the challenges which will shape the revised Fuel Poverty Strategy from the end of 2026 onwards.

Out priority is to fulfil our statutory duty of responding to the Scottish Government’s Tackling Fuel Poverty in Scotland: Periodic Report 2021-2024 which was published on the 1 April this year (2025). As stipulated in The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019, we will scrutinise the Scottish Government’s progress – looking back on progress to date as well as forward to where next in terms of Scotland’s ambition to eradicate fuel poverty by 2040.

When we have completed our response on the Periodic Report, we will review what we have planned for the remainder of the April 2025 – March 2026 year, amending the plan for the remainder of the year should this prove necessary. Our intention at this point is to continue our work to understand the reality for those living in fuel poverty in rural and remote rural parts of Scotland (including of course island communities) and importantly the interventions and policy choices that will deliver the best outcomes. We will follow this by laying the foundations for an in-depth focus on fuel poverty through a public health lens in the following workplan year – April 2026 – March 2027 – taking the opportunity at the same time for a forward look at the 2026-2027 workplan. We will also continue our work to advocate for the introduction of a flexible energy discount mechanism (or social tariff) and for the need to ensure that fuel poverty mitigation features as a measurable objective within wider net zero policies, and to influence policy developments on energy consumer affordability through responding to consultations, where we have the capacity to do so.

We are also mindful that the Scottish Government may initiate the work to revise their Fuel Poverty Strategy, which must be completed by December 2026[13], during the lifetime of this workplan. The funding landscape may also change over this workplan year with the next iteration of the Energy Company Obligation (ECO5) and the scheduled end of the Warm Home Discount in 2026 in its current form.

Who we are

The Panel is an independent advisory Non-Departmental Public Body, established under The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019, set up to support Scottish Ministers and others to help eradicate fuel poverty in Scotland.

We currently have five panel members. Four members are contracted to work around 12 days a year with the chairing member working around 18 days a year, collectively working a maximum of 90 days. We are supported by a Secretariat of three.

What we do

The Panel provides an independent voice for Scottish Ministers on fuel poverty matters, fostering co-operation across the fuel poverty landscape, and fulfilling its statutory duty of monitoring Scottish Ministers’ progress towards meeting Scotland’s statutory fuel poverty targets. This includes assessing the likelihood of the Scottish Government meeting those targets, how the four drivers of fuel poverty are being addressed, and how effectively the implementation of Scotland’s Tackling Fuel Poverty Strategy is working to deliver Scotland’s fuel poverty targets and address the fuel poverty drivers.

Our March 2024 to April 2027 Strategic Plan sets out our strategic goals which underpin our vision and mission for this three-year period.

The Panel’s vision is for a Scotland where everyone lives in an energy efficient home and has access to affordable clean energy – a Scotland where no one lives in fuel poverty.

The Panel’s work is driven by its mission to:

• Strengthen fuel poverty policy, legislation and practice
  in Scotland and the UK.
• Eradicate fuel poverty and increase resilience by engaging with people with lived experience and those who support them.
• By advising Scottish Ministers, scrutinising progress, and advocating for action.

In working to realise our vision and achieve our mission, the Panel aims to foster
an ethos supported by these principles:

• Independent – undertake work that is independent and objective.
• Transparent – be open and transparent, bringing our Code of Conduct principles to all that we do.
• Collaborative – work in an inquisitive, consultative, and collaborative way, including in the development, delivery and sharing of our thinking and advice.
• Dynamic – provide visionary and dynamic advice and input to both long term challenges and the response needed to immediate need.
• Understanding – be respectful and supportive listeners to all, particularly offering a safe space for those with lived experience of fuel poverty to share their insights, understanding and views.

Our workplan is also shaped by our seven strategic goals:

1. We will advocate for the eradication of fuel poverty by relationship building, and through evidence-based policy development and delivery in Scotland, and in the UK where appropriate.
2. We will be informed by evidence from a wide range of sources and stakeholders, including those with lived experience and the organisations that support them.
3. We will offer insights and reflections to support Scottish Government to improve short-term and long-term responses to Scotland’s shifting fuel poverty landscape.
4. We will provide an independent view of Scottish Government’s progress towards and likelihood of achieving Scotland’s statutory fuel poverty targets.
5. We will advocate for actions and solutions to address the drivers of fuel poverty across, and in line with, all the relevant policy areas which contribute to National Performance Framework outcomes.
6. We will champion and foster a collaborative approach to challenging fuel poverty drivers and other structural causes, identifying and encouraging actions to address fuel poverty with stakeholders across the public, private and third sectors.
7. We will establish and maintain a strong values-led governance framework to ensure the effectiveness of the Panel.

Annex A shows how the work we have planned maps to our strategic goals.