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

2 Methodology

Background

Following the passage of the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019, the Scottish Government commissioned CRSP to:

• Carry out research in remote rural Scotland that consulted groups of citizens living in different areas about what is needed for a minimum, socially acceptable living standard in their communities, and how this varies from the research in urban UK.
• Use this research to establish a baseline of budgets for broad household types in remote mainland Scotland and in the islands, using these to calculate a percentage ‘uplift’ to be applied to the MIS benchmarks in the Scottish fuel poverty calculation.
• Update these calculations annually, based on price increases and (where appropriate) the changing composition of MIS budgets.

The plan within the initial project design was to uprate minimum budgets for remote rural Scotland based on CPI price indexation in odd-numbered years, and to carry out repricing of items and further analysis every time urban UK MIS budgets were rebased and reviewed, in even numbered years. A full refresh of the remote Scotland research is planned every eight years.

Disruptions arising from Covid-19 resulted in the first figures being published in 2021, relating to this year, rather than in 2020. As noted above, the update in 2022 incorporated price changes, re-pricing of items in remote rural locations in Scotland, and also took account of new urban UK MIS research undertaken in 2022 (Davis et al, 2022). This posed some challenges in updating minimum budgets, which were outlined in detail in the previous report (Bryan et al, 2024). In 2023, minimum budgets for remote rural Scotland have been updated based on changes in prices between April 2022 and April 2023, as captured through the Consumer Prices Index (CPI). For the most part, the point of comparison here – minimum budgets for urban UK – were also updated using inflation in 2023 (Padley and Stone, 2023). The categories within urban UK MIS budgets that were not uprated by inflation – but instead used data relating to 2023 – were rent (both private and social), council tax, domestic fuel, and childcare.

In 2024, urban UK MIS budgets for all household types have been ‘rebased’. This entails starting from ‘blank sheets’ with groups of members of the public, who are tasked with discussing, agreeing and describing what households need for a minimum socially acceptable standard of living in 2024. This is the first rebase of all households at one point in time since the initial MIS research, published in 2008 (Bradshaw et al, 2008). The update of minimum budgets for remote rural Scotland in 2024 will consequently take account of inflation, updated costings in remote rural Scotland and, significantly, changes made to the composition of minimum baskets of goods and services as a result of the UK-wide MIS rebase across all household types.