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Policy

Home energy and fuel poverty

From
Cabinet Secretary for Social Justice, Housing and Local Government, +2 more … Minister for Social Security and Local Government, Minister for Zero Carbon Buildings, Active Travel and Tenants' Rights
Directorate
Local Government and Housing Directorate, +1 more … Energy and Climate Change Directorate
Part of
Energy, Housing
Policy actions  1 of 4

Fuel poverty

Cost of living crisis: find out what help is available

Strategy

We published the final Fuel Poverty Strategy on 23 December 2021. It includes actions to tackle each of the four drivers of fuel poverty:

  • poor energy efficiency of the home
  • high energy costs
  • low household income
  • how energy is used in the home

The new independent statutory Scottish Fuel Poverty Advisory Panel was established from 1 January 2022, and members appointments were announced at the end of 2021. The appointments will be for four years and will run from 1 January 2022 until 31 December 2025. The panel will provide an important means of external scrutiny of our progress towards meeting the fuel poverty targets.

Fuel Insecurity Fund

In winter 2020, we established the first Fuel Insecurity Fund (FIF), working with trusted third sector partners to deliver direct emergency funds to people struggling to pay their energy bills who were at risk of self-disconnection or self-rationing their energy use as a result. Although developed as part of our Covid Winter support, the fund is now a critical plank in our support to people in the context of unprecedented increases to energy costs. The value and importance of our £20 million investment into the FIF in 2022/23 cannot be underestimated, as we know the real and tangible impact this is making on the ground now, through our delivery partners, towards helping the most vulnerable in society.

This Fund is there to support households on any fuel type who are at risk of self-disconnection or self-rationing their energy use. Anyone can be supported regardless of which home they live in or fuel type. 

Our current 2022/23 third sector delivery partners who directly support thousands of vulnerable customers and households across Scotland are:

Fuel Poverty Act

The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act was passed by Parliament with unanimous support in June 2019 and received Royal Assent on 18 July 2019. It sets statutory targets for reducing fuel poverty, introduces a new definition which aligns fuel poverty more closely with relative income poverty and requires Scottish ministers to produce a comprehensive strategy to show how they intend to meet the targets. 

The development of this legislation was informed by the recommendations put forward by the Fuel Poverty Strategic Working Group and the Scottish Rural Fuel Poverty Task Force, which both reported in October 2016, and by a consultation held between November 2017 and February 2018. The legislation was laid in Parliament in June 2018 together with an illustrative draft fuel poverty strategy and the following impact assessments:

Targets

The statutory targets set by the 2019 Act are that in 2040:

  • no more than 5% of households should be in fuel poverty
  • no more than 1% of households should be in extreme fuel poverty
  • the median fuel poverty gap of households in fuel poverty is no more than £250 in 2015 prices before adding inflation

Each of these 2040 targets must be achieved not only in Scotland as a whole, but also within each of the 32 local authority areas. This is to ensure that no part of the country is left behind. There are also interim targets set for the same metrics at 2030 and 2035. However, the interim targets only need to be met at a national level.

Definition

The 2019 Act establishes a new two-part definition whereby a household is considered fuel poor if:

  • after housing costs have been deducted, more than 10% (20% for extreme fuel poverty) of their net income is required to pay for their reasonable fuel needs
  • after further adjustments are made to deduct childcare costs and any benefits received for a disability or care need, their remaining income is insufficient to maintain an acceptable standard of living, defined as being at least 90% of the UK Minimum Income Standard (MIS)

To take account of the generally higher costs of living in Scotland’s remote, rural and island communities, the legislation provides for uplifts to be applied to the MIS for households in these areas.

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