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

3 Minimum budgets for remote rural Scotland in 2024

The first report in this series (Davis et al, 2021) identified five key areas of additional and/or different needs and costs in remote rural Scotland: food, clothing, household goods, travel and social and cultural participation. Of these five, additional and/or different needs in relation to travel accounted for by far the greatest additional costs, and this remains the case in 2024.

The remote rural Scotland minimum budgets in 2024 assume that differences within these five areas remain, and accordingly, decisions made by groups in 2021 have been included in the calculation of minimum budgets for remote rural Scotland. What this means in practice is that, for example, the additional and different clothing and footwear needed as a consequence of living in remote rural Scotland rather than urban UK, has been re-priced in 2024 and added to the updated clothing budgets for urban UK. In budget areas such as food and household goods, urban UK minimum budgets have been re-priced to take account of the different retailers available in remote rural Scotland, as well as the different patterns of food shopping. All of this results in an ‘uplift’ for these elements of a minimum budget, which contributes to the total difference between what is needed for a minimum in remote rural Scotland compared to the UK. This re-pricing was undertaken for all elements of the budget where differences in needs, retailers, shopping patterns were identified in 2021.

Crucially however, the starting point for re-pricing different and additional needs was the rebased urban UK MIS budgets from 2024. In the second report in this series (Bryan et al, 2024), the calculation of the 2022 minimum budgets for remote rural Scotland was founded on the principle that where changes in minimum needs in urban UK (for working-age households without children and pensioner households) resulted in a budget significantly above the equivalent in remote rural Scotland, we would report remote rural Scotland budgets to be the same as for urban UK. In the absence of new research with individuals living in remote rural Scotland, or clear evidence of different patterns of social participation, it was not reasonable to assume that individuals living in remote rural Scotland needed less than their counterparts in urban UK.

In 2024, we have continued with this principle, except where different and additional needs were identified in 2021, and where policy differences in Scotland result in different costs, for example, in relation to prescriptions. It is therefore worthwhile briefly setting out the key changes in urban UK MIS in 2024, and how these have fed through into the calculation of minimum budgets for remote rural Scotland for 2024.

Key changes in UK MIS 2024

In 2024 all the MIS budgets for households in urban UK were rebased. This means that groups started ‘from scratch’ in discussing and compiling minimum budgets, rather than reviewing and amending lists of goods and services that comprise a minimum living standard put together in previous years (Davis et al, 2024). This was the first time budgets for all households had been rebased at one point in time since MIS was first published in 2008 (Bradshaw et al., 2008). For selected households these new lists of goods and services were repriced in different mainland and island locations in Scotland in 2024 as part of the updating process.

Over time most budget areas have remained similar in composition – what people agree is needed in terms of household goods, clothing, footwear, furniture and toiletries does not change significantly from update to update. However, there are changes in some categories which reflect changing norms, new patterns of consumption and responses to perceptions around the availability of some services. The impact of these changes on minimum budgets varies, depending on the nature of the change

Food and drink

Groups agree that as a minimum people should be able to do their whole shop under one roof. While shopping at discount stores such as Aldi and Lidl has become much more common, and more branches have opened, there is widespread acknowledgement that they do not have the comprehensive range of food, drink and household goods that a major supermarket stocks. Since 2008 food and drink for consumption in the home in MIS UK has always been priced at Tesco, which is the most prevalent supermarket in the UK. There is a national pricing policy for Tesco’s online groceries, which is the same in larger branches (Tesco Extra), which means that people in urban locations should be able to buy the same things at the same price, wherever they live.

Across remote rural Scotland Tesco generally has branches in many mid-sized towns. Depending on where they live, people are likely to access one of three types of stores; Tesco Extra (largest), Tesco Superstores (mid-size) and Tesco Metro (smaller, convenience-type stores). Groups held in rural Scotland in 2020/21 said that most people would do a regular weekly ‘big’ shop to get the majority of supplies, but that some perishable items (such as bread, milk, eggs and fresh fruit) would need to be ‘topped up’ more locally. In places where this was less accessible people would shop at the largest available supermarket less frequently (monthly, rather than weekly) and would be more reliant on local or community shops to get the majority of their shopping in between. Without new research we cannot be sure that this pattern has remained the same, but it is reasonable to assume that it continues to be the case. Consequently, food baskets were re-costed at relevant stores in Scotland.

The composition of a minimum food basket – and therefore the minimum nutritional requirements – changed in 2024, taking into account that the height and weight of the UK population has increased over time, and in particular since MIS was first published in 2008. This change in the contents of baskets resulted in an increase in the number of items in the basket, as well as increasing the quantity of some items. This increased the cost of the weekly food and drink budget across households in 2024. The re-pricing of this element of a minimum budget in remote rural Scotland used these updated lists, as there is no good reason to assume that increases in height and weight in the UK have not been mirrored in these areas. This also helps to ensure that any differences in the cost of the weekly food and drink budget between urban UK and remote rural Scotland are a product of different prices and patterns of shopping, rather than being a product of comparing different baskets.

From the re-pricing process in 2024, it was clear that some of the prices for the food baskets re-priced at Tesco Superstores were in lower than in urban UK MIS: it seems likely that this is a consequence of different offers in remote rural stores, as more generally the prices of individual items were the same. For example, in Tesco superstores in remote rural stores, Robinsons Squash was on offer at £1.25, while in urban UK stores the price of an individual litre bottle was £2. The prices in smaller, more local stores – in this case, Co-operative convenience stores – are higher but there is less price variation between large and small Co-op stores on the mainland, particularly in relation to food, as there has been considerable investment in small Co-ops on the mainland in recent years which means they are bigger and can stock a wider range of items, as well as larger pack sizes. As in 2021, the largest factor in price differences between urban UK, the mainland and islands is a result of smaller pack sizes, a lack of multi-packs and more limited choice – often it is a substantial difference in a small number of items that has an impact on the overall cost of food baskets.

Household goods

In urban UK MIS in 2024 participants agreed that working-age adult households without children should be able to take advantage of the economic and health benefits of using an air fryer to cook, an item that has only relatively recently begun to be commonplace. Single and partnered pensioner households also included this item, which seems to have replaced the slow cooker as a more cost effective way of preparing meals, particularly for single adult households. Parents said that air fryers might not be able to cook enough food for larger households and instead opted for a slow cooker.

Discussions about laundry and clothes drying led to the inclusion of a heat pump tumble dryer, which while more expensive than standard condenser dryers, were seen as more economical in terms of energy efficiency and cheaper to run, representing a saving over time. In urban UK, the dryer is included for households where there were more than two children. In previous research in remote rural Scotland, groups were clear that all households, not just those with children, needed a tumble dryer, particularly for use during colder months, with bad weather more likely than in urban UK with the associated difficulties of getting washing dry indoors when it can’t be hung outside. In calculating the 2024 minimum budgets for remote rural Scotland, the heat pump tumble dryer has been included, as without new research it is not possible to assume that a different appliance would meet the need for drying clothes in these areas.

More generally, for remote rural mainland households in 2024 it is assumed that the shopping ‘model’ (i.e. assumptions about where and how items would be purchased) is the same as for urban UK MIS, as most households have cars and regularly travel to larger towns. This additional travel has been accounted for in increased mileage and also in additional delivery costs for online shopping. Items priced in Asda in urban UK MIS were repriced in Nickel & Dime, Argos or Tescos. For remote rural island households, it is assumed that the majority of household goods would be purchased on island, with some ordered/delivered via Argos). Consequently, smaller items were priced at Argos, Tesco and Nickel & Dime, with items matched to those in urban UK minimum budgets. Electrical goods on islands were priced at suppliers in Lerwick, Kirkwall and Stornoway with the average price of the three included in the basket. Differences in this element of the budget are then a consequence of the inclusion of the tumble dryer for all households, alongside the re-pricing of items in appropriate retailers.

Personal care

In urban UK MIS, groups have continued to report an increase in the cost of hairdressing, citing higher overhead costs (rent, wages, utilities) as the likely reason for this. In addition, they have agreed that it is important for budgets to take account of a wider range of needs – for example, people with different hair textures and types often have different haircare needs. Accordingly, minimum budgets have increased for all working-age households in 2024 and in the absence of new research in remote rural Scotland, it is reasonable to assume that this would also be needed by people in these areas.

Health

One of the most significant changes to the urban UK MIS budgets in 2024 was the inclusion of £200 per year, per working-age adult for accessing health-related services, such as physiotherapy or counselling. Groups of parents and working-age adults without children said that while these services were still available via the NHS, it could be difficult to get an appointment when this was needed, with long waiting lists for treatment in many locations. Including an annual amount to cover the cost of interim treatment while waiting for an appointment to become available would enable people to manage and maintain their health. As in other areas of a minimum budget, there is no good reason to assume that this would not also be needed in remote rural Scotland.

The minimum budgets for health in remote rural Scotland do, however, reflect the different policies in Scotland relating to prescriptions. As these are free for everyone in Scotland, the amount included to cover this cost in urban UK has been removed.

Clothing

While there were no significant changes in what was included in clothing budgets in urban UK MIS in 2024, it is worth noting how this budget are has been approached in updating minimum budgets for remote rural Scotland. As with household goods, for remote rural mainland households, it is assumed that the shopping model is the same as for urban UK MIS. However, additional clothing and footwear was included by groups in 2021 to take account of the weather and this has been added to the urban MIS UK clothing and footwear budgets. Generally, this was costed at Go Outdoors, The Original Factory Shop or Tescos (for thermals), in line with what groups said in 2021. For remote rural island households, an element of local clothes shopping (and pricing) was included as these households do not travel as regularly to larger towns or the mainland. A subset of clothing was re-priced locally with a higher percentage from local shops for pensioner households. Differences in this budget area are a result of the additional items included to take account of the weather, as well as the re-pricing of selected items in different retailers.