Fuel poverty measurement - reflecting higher living costs in remote rural Scotland: 2023 update

Executive summary

The Centre for Research in Social Policy (CRSP), Loughborough University, has pioneered research into publicly determined minimum living standards through its Minimum Income Standard (MIS) programme since 2008. MIS sets out what the public in the UK agree households need in for a minimum socially acceptable standard of living – that is, not what is needed just for survival, but to participate in society, to live with dignity. Ongoing MIS research produces annually updated income benchmarks for a range of household types in urban UK.

The Scottish Government commissioned CRSP to undertake research in remote rural Scotland to identify what is needed for a minimum socially acceptable standard of living in these areas, and to determine where there are different and/or additional needs and costs compared to urban UK. This ongoing research and analysis is needed as the MIS income benchmarks are key to the Scottish fuel poverty calculation detailed in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019.

The primary research – which provided the basis of the 2021 estimates (Davis et al, 2021) – in remote rural Scotland was based on discussions with groups of people from different sorts of households, living in remote rural mainland and island areas. Groups were tasked with reflecting on the needs of households in these locations and how these minimum needs – and therefore minimum household budgets – differ from those established through ongoing research in urban UK. The research established a baseline of minimum needs for these areas and used these to calculate a percentage ‘uplift’ to be applied to the MIS benchmarks in the Scottish fuel poverty calculation.

This latest report updates estimates made in 2022 of additional costs that make it more expensive to meet a minimum acceptable living standard in remote rural areas of Scotland. In 2022, minimum budgets were updated based on inflation, on updated costings in remote rural Scotland, and on adjustments to take account of new UK-wide MIS research in urban areas and the new minimum budgets that this produced. In 2023, updates to minimum budgets are based solely on changes in prices between April 2022 and April 2023, as captured through components of the Consumer Prices Index (CPI). In 2024, minimum budgets for remote rural Scotland will take account of increases in prices, updated costings in remote rural Scotland and changes made to the composition of minimum budgets as a result of new UK-wide MIS research across all household types.

The report sets out the impact of inflation on remote rural Scotland minimum budgets, and consequently on the minimum budget uplifts for 2023, set out below.