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

1 Introduction

This report updates estimates, made for 2022, of specific additional costs which means it is more expensive to reach a minimum socially acceptable standard of living in remote rural Scotland (Bryan et al, 2024). The report providing estimates for 2022 was not based on research with groups of people living in remote areas of Scotland, as it was in 2021. Rather, in 2022, minimum budgets for remote rural Scotland were updated based on inflation (as measured through CPI), on updated costings in remote rural Scotland, and on adjustments to budgets to take account of UK-wide MIS research in urban areas published in 2022 (Davis et al, 2022).

The estimates set out for 2023 in this report are intended to inform the Scottish Government’s monitoring, from year to year, of the number of households in fuel poverty, for which targets have been set by the Fuel Poverty (Targets, Definitions and Strategy) (Scotland Act) 2019. This involves benchmarks for household spending requirements derived from the MIS, which take into account additional and/or different needs in remote rural areas, to be updated annually.

The Scottish Government legislation defines a household as being in fuel poverty if:

(i) in order to maintain a satisfactory heating regime, total fuel costs necessary for the home are more than 10% of the household's adjusted (i.e., after housing costs) net income; and

(ii) after deducting those fuel costs, benefits received for a care need or disability and childcare costs, the household's remaining adjusted net income is insufficient to maintain an acceptable standard of living. This remaining adjusted net income must be at least 90% of the UK MIS to be considered an acceptable standard of living, with an additional amount added to the MIS for households in remote rural, remote small town and island areas.

The report updates six numbers derived from the initial research in 2020/2021: the percentage uplift that should be applied to MIS budgets for pensioner households, families with children and working-age adults without children in remote rural parts of the Scottish mainland and the Scottish islands, respectively. It does not repeat analysis or discussion of the qualitative evidence presented in each of the two previous reports describing what aspects of life and costs in remote Scotland account for higher costs, and setting out how changes in urban UK MIS budgets have been incorporated into the minimum budgets for remote rural Scotland.