The cost of remoteness: Reflecting higher living costs in remote rural Scotland when measuring fuel poverty - 2024 update

1 Introduction

This latest report updates estimates of the specific different and additional costs which make it more expensive to reach a minimum socially acceptable standard of living in remote rural Scotland (see Padley, 2025; Bryan et al, 2024). The previous two reports in this series, providing estimates for 2022 and 2023, were not based on new primary research with groups of people living in remote areas of Scotland. In each of these reports minimum budgets for remote rural Scotland were updated based on inflation (as measured through CPI), on updated costings in remote rural Scotland, and in 2022, on adjustments to budgets to take account of UK-wide MIS research in urban areas undertaken that year (Davis et al, 2022).

The estimates set out here for 2024 take as their starting point the new UK-wide MIS research across all household types, as well as drawing on previous research in remote rural Scotland identifying additional and/or different needs and costs, and updated costings in remote rural Scotland. For the first time since the initial UK MIS report was published in 2008, primary research in 2024, with groups of people living in urban areas of the UK, established afresh what was needed for a minimum standard of living for all household compositions -working-age households without children, working-age households with children and pensioner households. In the context of ongoing cost of living challenges and broader economic, political and social uncertainty and flux, ‘rebasing’ minimum budgets for all households helped to ensure that MIS captures and reflects the shared vision of minimum living standards at this time.

Much of what the public agree is needed for a minimum socially acceptable living standard in 2024 is broadly similar to what was agreed in 2008 – continuing economic uncertainty undoubtedly brings challenges to many households, but does not necessarily change shared views about, for example, the furniture people need in their homes, the food they need to be able to cook and eat, or the clothing they need (Davis et al, 2024). The prices of these items can and do change over time, often significantly, which is why re-costing UK MIS budgets for urban areas in remote rural Scotland is so important. But the majority of what comprises a minimum basket has remained relatively stable.

The 2024 UK MIS research did, however, identify some key changes in the what the public agree is needed for a minimum living standard which reflect changes in expectations, technology and public service provision. The 2024 UK MIS budgets also adopted a revised method for constructing household food baskets, reflecting changes in average weight and height since the MIS research was first published in 2008. These key changes, and how these have been built into this latest update, are explored in Section 3 of this report.

As in previous years, the estimates presented here 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 requires annual updates of the benchmarks for household spending requirements derived from the MIS, which take into account additional and/or different needs in remote rural areas.

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.

This report updates six numbers derived from the initial research in 2020/2021: the percentage uplift that should be applied to urban UK MIS budgets for working-age adults without children, working-age households with children, and pensioner households in remote rural parts of the Scottish mainland and the Scottish islands, respectively. It does not revisit analysis or discussion of the qualitative evidence presented in previous reports describing what aspects of life and costs in remote rural Scotland explain the higher cost of a minimum in these locations. However, as noted above, this year it does set out how changes in urban UK MIS budgets in 2024 have been incorporated into the minimum budgets for remote rural Scotland.