Publication - Consultation paper

Scottish Energy Performance Certificate Register: consultation on funding

Published: 8 May 2017

Consultation on the Scottish Energy Performance Certificate Register (SEPCR), to advise on pending action to amend statutory fees.

28 page PDF

577.3 kB

28 page PDF

577.3 kB

Scottish Energy Performance Certificate Register: consultation on funding
Amendment of fees for lodgement of energy performance data

28 page PDF

577.3 kB

Amendment of fees for lodgement of energy performance data

2.1 Objective

To adjust the level of funding for the Scottish Energy Performance Register ( SEPCR) by increasing the statutory fee paid by users for lodging of data to the register.

2.2 Aims

1. To provide resources adequate to support effective operation and maintenance of register systems from lodgement fee revenue.

2. To support a limited annual programme of core register development to provide further enhancements to the register systems to improve access and use of data held on the register.

2.3 Analysis of costs to support change in lodgement fee.

Due to the level of development work undertaken to the SEPCR in support of a range of Scottish and UK Government policies over the years 2012-2015, a true picture of core operational costs for the register on a 'maintaining' basis only emerged last year.

The following table summarises key operating costs and lodgement income for the most recent three years of operation. An accrued operating fund, arising from direct funding of development work prior to 2014/15, was utilised over the past three years in meeting running costs, deferring the need to review lodgement fees.

Operational costs Income
Direct costs (staff, administration & IT charges) Release (update) & other recurring costs total operational costs Lodgement revenue Funds available from previous year Funding Shortfall met by the Scottish Government
2014/15 £468,082 £88,563 £556,645 £417,098 £239,319 - £50,746
2015/16 £495,710 £95,663 £591,373 £356,440 £150,518 - £137,089
2016/17* £509,827 £81,118 £590,945 £317,616 £52,674 - £229,109

* Income and expenditure for March 2017 is projected.

Operational costs for core register functions exclude separately funded development projects such as the 2015 programme that led to introduction of the facility for Action Plan and Display Energy Certificate data lodgement in 2016 [11] . These core costs have remained relatively constant in recent years, being in the region of £550,000 to £600,000.

However, lodgement revenue has reduced significantly from just under £420,000 in 2014/15 to around £310,000 in 2016/17. This has resulted in both expenditure of all residual funding from previous years' income and a need for direct finding from the Scottish Government.

2.4 Changes in profile of EPC lodgement numbers.

The reduction in overall number of EPC lodgements is illustrated in the graphs below.

Graph - Domestic EPC lodgements, March 2013 - February 2017

Graph - Domestic EPC lodgements, March 2013 - February 2017

Graph - Non-domestic EPC lodgements, March 2013 - February 2017

Graph - Non-domestic EPC lodgements, March 2013 - February 2017

Annual EPC lodgement for the past three years has fallen by approximately 27% for domestic buildings and 9% for non-domestic buildings:

  • 2014/15 - 326,126 domestic; 7,124 non-domestic
  • 2015/16 - 273,911 domestic; 6,932 non-domestic
  • 2016/17 - 236,881 domestic; 6,497 non-domestic

From the perspective of the EU Directive, which requires Energy Performance Certificates and sets a validity period for them of ten years, a reduction in certification activity is to be expected as a larger proportion of buildings receive certification. This trend is mitigated to some extent by the use of EPCs in support of domestic policy and, in particular, the production of 'before and after' EPCs as part of funded improvement measures.

On the basis of lodgement trends, it is projected that the annual number of EPC lodgements will continue to decline moderately in the short term. However, review of the lodgement fee as an annual exercise will enable further adjustment of the statutory fee to maintain lodgement revenue to the extent this is considered reasonable.

2.5 Overview of Proposals

1. Annual review - Elsewhere in the UK, lodgement fees have been subject to annual review since April 2012. SEPCR operations will continue to be monitored on a monthly basis to identify the efficacy of the current statutory fee in meeting operational costs. Any decision to make further amendment to the statutory fee, together with supporting evidence, would be agreed by Ministers at least three months before any planned implementation.

As is the case across the rest of the UK, such future amendments will not be subject to public consultation but, subject to Ministerial approval, will be implemented by amendment of regulation and supported by an Impact Assessment.

2. Amendment of current statutory fee - We consider that it remains appropriate and equitable for the register to be funded by a statutory lodgement fee, resulting in the cost of maintaining the service being borne only by those individuals who use the service. Fees will be increased or reduced to provide resources adequate to support effective operation and maintenance of register systems from lodgement fee revenue.

Where monitoring of expenditure identifies that adequate capacity exists, expenditure on core register development to improve access and use of data held on the register will be authorised by the SEPCR Steering Group, which comprises the keeper and representatives from Scottish Government policy areas that utilise register data.

2.6 Detail of Proposal

Operation & Maintenance of the register currently costs approximately £41,000 each month or £492,000 per annum. The remaining expenditure relates to periodic updates to register services and their interface with users (testing and release costs).

Over and above the cost of operating and maintaining the register, changes to implemented functions require testing and release of a new schema version and these arise on a regular basis. Such updates to existing systems to maintain or to enhance existing functionality are classified as 'core register development' and are intended to be funded from lodgement revenue. The costs arising from such releases vary depending on the level of change implemented and generally lie within a range of £10,000 (minor release to implement enhancements or correct known issues) to £75,000 (major data schema change, such as revision of the National Calculation Methodology).

Other work on register systems to support more effective processing of data, reducing operating costs, is also undertaken where needed.

Both 2015/16 and 2016/17 did not include significant project development work to the register and are considered a reasonable indicator of future costs. On that basis, calculation of fee increase is proposed based upon the following budget:

£500,000 Operation and maintenance
£100,000 Core register development (planned and emergency releases)
£ 50,000 Core register development (enhancing register systems)
£650,000 Total

A projection of likely levels of annual lodgement to the SEPCR suggests assessment of projected revenue be based upon 215,000 domestic EPCs, 6500 non-domestic EPCs and 1,500 Action Plans and Display Energy Certificates (the last element being subject to VAT at standard rate).

At present, no lodgement fee is levied by the UK Government for lodgement of Green Deal information to the register. If fees for lodgement of such data are introduced in the future, the impact of additional revenue will be considered within the annual review process identified in section 2.5.

2.7 Amended fees for lodgement of data

To meet the anticipated annual budget, the statutory fee would need to be increased to:

  • £2.60 for domestic EPCs (an increase of £1.45); and
  • £12.10 for non-domestic EPCs (an increase of £6.74).

This raises both fees by approximately 125% and would provide projected annual revenue of just over £650,000.

Whilst this represents a significant percentage increase from the original 2012 lodgement fees, it should be noted that:

  • The statutory fee remains a small component in the overall cost of an EPC assessment;
  • Scottish building owners were not charged a lodgement fee prior to October 2012, fees have remained the same or lower than the rest of the UK since that date; and
  • The current Keeper of the Scottish Register is a social enterprise and the register is run on a 'not for profit' basis.

2.8 Consultation questions

Consultation questions are noted here for reference. Please provide your input to the consultation on the separate Respondent Information Form ( RIF), published alongside this consultation paper.

Question 1

Do you support the continuation of the funding approach introduced in 2012 - that the operation of the SEPCR be self-financing, supported primarily by the statutory fee levied on each lodgement of energy performance data?

Yes / No

Please set out your reasons for this response.

Question 2

Do you support the intent to review the lodgement fee on an annual basis to ensure that charges are set at the minimum level needed to cover operational costs?

Yes / No

Please set out your reasons for this response.

Question 3

Please use this question to provide any other commentary or observations you have on the current funding of the Scottish Energy Performance Certificate Register. Where practical, please provide examples or evidence to support the issues you raise.


Email: Steven Scott

Phone: 0300 244 4000 – Central Enquiry Unit

The Scottish Government
St Andrew's House
Regent Road