Delivering net zero for Scotland's buildings - Heat in Buildings Bill: consultation analysis

7. Monitoring and Enforcement

This chapter examines the suggestions for monitoring and enforcing the standards proposed in the consultation paper. It covers different monitoring methods, such as EPCs or sampling, and asks about prospective penalties for not meeting transition deadlines. Questions also asked about eligibility for exemptions or extended timescales.

Chapter Summary

There was a preference for a nuanced approach to monitoring and enforcement with respondents more often supporting a combination of monitoring methods and a mix of ways to enforce the Standard. While high levels of support for exemptions and time extensions were recorded in closed questions, open questions allowed many respondents to articulate concerns, considerations and caveats to their support, in particular the need to provide financial support for the transition and for exemptions and extensions to be fair, flexible and pragmatic. A wide range of different types of buildings and groups of people were suggested as being eligible for modifications to the Standard, though this was opposed by some who believed the Standard should apply to everyone equally.

In terms of approaches to monitoring the Heat in Buildings standard, nearly half (47%) of those who answered Q18 preferred an approach which combines the two options outlined in the consultation paper i.e. submitting an EPC and sampling a percentage of buildings.

Differences between individuals and organisations were evident, with individuals more likely to indicate they did not agree with any type of monitoring (28% vs 4% of organisations) and organisations more likely to support either a combined approach (54% compared to 45% of individuals) or a different method to those suggested in the consultation paper (18% vs 6% of individuals).

It should be noted that qualitative comments suggest some individuals who disagreed with any of the proposed types of monitoring did so because they opposed the Standard in general; the same issue is evident in responses to Q19. Of the respondents who answered ‘None, there should be no monitoring’ at Q18, 93% were opposed to introducing a minimum energy efficiency standard in owner occupied homes by 2033, and 88% were opposed to prohibiting the use of polluting heating systems by 2045 at Q1.

Just under a third of respondents commented in Q18. The most prevalent theme was concern about the quality and accuracy of EPCs and their appropriateness for monitoring. This issue was raised regardless of respondent’s views; it was noted by some who supported a combination of the two methods and some who supported submitting EPCs, but was also cited by some as a reason to recommend sampling or an alternative approach. Respondents were concerned about the quality of the data collected in EPCs and whether it is comprehensive enough for monitoring the Standard. Some others suggested that EPCs were limited in their scope and would not provide enough flexibility to consider and compare across different building types. Others mentioned a wariness of inconsistent reporting methods among EPC assessors.

“EPCs methodology should be improved to make them more accurate. At present there is no robust way of dealing with complexity, such as more than one wall type and more than one floor type, each with differing amounts of insulation” - Individual

The next most prevalent theme, mentioned by many individuals and organisations, was support for a combined approach to monitoring. This theme was more prevalent in comments from environmental organisations and local authorities than other types of organisation. Support for a combined approach was often due to the above concerns about EPCs and the potential burden of a sampling only approach on public bodies.

“We recommend that the Scottish Government uses both EPCs and sampling to determine compliance with the Heat in Buildings Standard. This involves a requirement for the homeowner to submit a new EPC after completing energy efficiency and heating system work. As noted in the consultation, EPCs are a well-established tool for recording what heating technologies are installed at a property. The cost of the EPC relative to the other work carried out is small. The Scottish Government could then sample properties where no EPC has been submitted.” - Thermal Storage UK

Another common theme was that many respondents provided other suggestions for monitoring. However, these suggestions varied considerably and included, for example:

• Creating a national database.
• Using the Scottish House Condition Survey instead of EPCs.
• Introducing installation certificates.
• Combining EPC metrics with landlord registration.
• Monitoring the energy usage of homes, through gas monitoring or thermal maps.
• Reassessing buildings every set number of years, like MOTs are used cars.
• Campaigning to make noncompliance socially unacceptable.
• Introducing a carbon tax, which increases annually.

The overarching themes of concerns about government overreach and criticism of the Scottish Government’s approach were more prevalent Q18 and Q19 than most other questions, being noted by many individuals. These respondents typically noted a dislike or distrust of the government monitoring individual citizens and enforcing change.

In contrast to the most prevalent theme, several other respondents supported EPCs as the most effective monitoring method. Respondents commented that EPCs offered fairness and equality and could possibly providing the most accurate picture of the current state energy efficient in most homes and of overall progress in the transition to clean heating. However, some noted that the cost of producing EPCs should be reduced if they are selected as the main monitoring method, to minimise the cost to households.

Some respondents expressed concerns with solely using a sampling approach. These included concerns about the costs and workload to administer the approach, as well as fears that it would be too subjective and not representative. In contrast, some supported sampling. Organisations who supported sampling often favoured the costs of monitoring being shifted from the property owner onto the government.

(1) relying on market and financial products

(2) extra Council Tax and Non-domestic Rates charges, in future

(3) civil penalties, in future

(4) mix of above options

(5) but have another suggestion

(6) any form of enforcement

One third (34%) of those answering Q19 did not support any enforcement; a larger proportion of individuals selected this option than organisations (37% vs 17%). A similar proportion (32%) supported a mixture of the three approaches to enforcement outlined in the consultation paper. However, there was very limited support for civil penalties (3%). As noted above, some opposed enforcement because of their overall opposition to the proposals. Among the respondents who answered ‘Do not support any form of enforcement’ at Q19, 83% were opposed to introducing a minimum energy efficiency standard in owner occupied homes by 2033, and 87% were opposed to prohibiting the use of polluting heating systems by 2045 at Q1.

Just over a quarter of respondents commented in Q19 and most prevalent in comments was the overarching theme of needing to incentivise rather than enforce compliance. This was more likely to be mentioned by environmental organisations and organisations managing a large building stock or estates. Respondents often noted the importance of clear communicating the benefits of transitioning to clean heating, for individual households, for financial reasons and for the environment. Others suggested financial incentives to entice owners away from polluting heating systems.

“We would note that another way to think about compliance could be financial incentives and case study examples (demonstrating full life-cycle costs etc) rather than penalties. For example, offering a council tax discount for properties that can evidence they comply (by allowing a visit to check), rather than penalties for non-compliance and seeking entry to properties to check. The former puts the onus on the property owner to claim, while the latter puts onus on the state or council to chase.” - South of Scotland Enterprise

The next most frequently mentioned theme was a general concern about how the proposed enforcement strategies would affect those who were struggling to afford the transition, such as those living on low incomes, or people who may find the transition difficult due to its impact on their day-to-day lives, such as the elderly or disabled. Others noted that a large number of households, including low-income and middle-income households, could experience financial difficulty depending on the type and costs of work needed. Several reiterated the overarching theme of the need for sufficient support, grants and funding for people who may struggle to afford the transition.

“We would also warn of the risk of creating a new class of “mortgage prisoners” who could be denied access to affordable refinancing options due to being unable to meet the Standard.” - Lloyds Banking Group

Many suggested alternatives to the proposed enforcement strategies. Several preferred to let the market drive change, including suggestions about making it more economically advantageous to switch to clean heating alternatives. Others thought the housing market could incentivise the transition by driving higher valuations for compliant properties. Some supported using private sector controls such as mortgages and insurance to drive change.

“Surely if the heating options available were cost effective to the householder and as a result more attractive than the status quo, this in itself would be result in strong buy-in” – Individual

Less commonly mentioned alternatives included: funding the transition through taxation and withholding of profits from fossil fuel companies; providing a scalable metric for households that permits revision throughout the transition and as different changes are made rather than a black and white assessment; Land and Building Transaction Tax (LBTT) waivers or rebates; greater monitoring of the transition by local authorities and mortgage providers; and expanded zero-interest loans. Several did express support for penalties, but only as a last resort, highlighting that the Standard would ultimately need some enforcement to be effective. Where possible, respondents suggested clear frameworks, advice and financial support before civil penalties. COSLA raised a concern about the suggestion that the Scottish Government could use devolved funding sources e.g. Council Tax, to incentivise or penalise households and businesses.

“While we appreciate that other alternatives are offered, it is not appropriate to use Local Government’s funding mechanisms in this punitive manner, nor to suggest how funds raised through this mechanism could be spent as this would be a matter for individual local authorities” – COSLA

Several respondents suggested that enforcement should be targeted at specific groups. Landlords were mentioned most often, as it was argued that their inaction could directly impact the housing quality for tenants who could not initiate the change independently.

“CAS supports civil penalties for private rented sector landlords who do not install energy efficiency measures and a clean heat system because tenants have limited agency that tenants have to install energy efficiency themselves.” – Citizens Advice Scotland

Q20. To what extent do you support our proposals to modify the Standard or exempt certain people from the need to meet the Heat in Buildings Standard?

Q21. Which people, businesses, or types of buildings, if any, should be eligible for a modified standard or exemptions?

Q22. To what extent do you support our proposals to give certain people extra time to meet the Heat in Buildings Standard?

Q23. Which people, businesses or types of buildings, if any, should be eligible for extra time?

Questions Q20 to Q23 asked respondents whether they supported modifications to the Standard, exemptions, time extensions in certain circumstances, and asked which types of buildings or groups of people they thought should be eligible. There was a significant degree of overlap in the qualitative comments across these four questions with the advantages and disadvantages of these approaches and the groups who could be eligible being commented on regardless of the specific focus of the question. To avoid repetition, the qualitative analysis below combines responses to all four questions.

Approximately two thirds (64%) of those who answered Q20 supported proposals to modify the Standard or exempt certain people from meeting the Standard. Just over one third (35%) strongly supported and just under one third (29%) somewhat supported it. One in five (18%) opposed this measure. Organisations were more likely to express support than individuals (73% compared to 62%).

There was widespread support among those answering Q22, with three quarters (74%) supporting the proposal to give certain people extra time to meet the Standard; just under half (46%) expressed strong support. One in ten (11%) opposed this proposal, with individuals more likely to disagree than organisations (12% vs 5%).

Between one quarter and half of respondents commented at each of Q20 to Q23. While high levels of support were recorded at the closed question, the open questions allowed many respondents to articulate concerns, considerations and caveats to their support.

Caveats to support

In Q20 and Q22, the most prevalent theme was that building owners will require funding, grants or other financial support to make the changes required to meet the Standard. While some expressed support for exemptions and time extensions in addition to greater support and funding, others opposed any adjustments to the Standard by asserting that with the correct level of support and funding there should be no need for further modifications, exemptions or time extensions.

The second most common theme at both questions was that exemptions, modifications and extensions, if used, need to be well-considered, pragmatic, and enhance equality. Many disagreed with broad exemptions or extensions based on building type or personal characteristics, instead suggesting a flexible process or a set of standards which would consider each case individually. Some organisations supported flexibility with regard to building type but not personal characteristics or situation, as characteristics could change and materials, technology, and workforce costs should decrease over time.

“All exemptions should be assessed on a case-by-case basis and be time-limited with regular review points. Warmworks is not in favour of providing a list of exemptions but rather the option of an exemption is provided if people feel they cannot meet the standard. This will also allow for a greater understanding of the barriers and more robust support mechanisms to be developed and rolled out. If exemptions are in place as a blanket measure, this could dilute the effectiveness of the regulations by creating ‘get out of jail free cards’ to too wide a population.” – Warmworks

“Some exemptions may be required; however, we expect these to be needed in very limited circumstances. Overuse of exemptions will impact on the effectiveness of the regulations and potentially undermine the credibility, fairness, and certainty that they are meant to provide.” - E3G

“We agree with the proposals to give certain people extra time, with the caveat that this is proportionate and targeted at those who require it after assessment, so that people are not left behind.” - Age Scotland

The misuse of exemptions or extensions through loopholes was a concern for many. These respondents noted that flexibility could allow some owners to avoid transitioning to clean heating even if they were capable of doing so. Again, a solution proposed by several was to review applications on a case-by-case basis. Supporters of time extensions suggested keeping them time-limited to ensure that it did not slow the transition.

“It is important to give some homes extra time to comply, but use of such measures should be limited to avoid creating too many exemptions or loopholes.” - Transition Black Isle

Some supported limited exemptions if there are clear guidelines, a well-publicised application processes and a transparent decision process. A few specifically mentioned the need for an appeals process.

Some supported time-limited extensions over exemptions or modifications. They argued that rather than allowing exemptions, more time would allow technology to improve. Owners of hard to heat buildings could then invest in the best form of clean heating, rather than using a currently available but inefficient system.

Opposition to exemptions or time extensions

At both Q21 and Q23, many individuals expressed apparently contradictory views but which ultimately reflected their opposition to the Standard in its entirety. Several argued that everyone should be exempt from the standard and others supported universal eligibility for an extension, but on the basis that there should be no Standard. Conversely, some others said no one should be exempt or offered extensions as there should be no Standard in the first place, but again because there should be no standard.

Many comments in Q21 argued there should be no exemptions at all. Several did not provide any further justification why, but others noted a preference for extensions over exemptions. A few suggested that those most in need of better heating and insulation would be most likely to be exempt, which could potentially worsen existing inequalities.

Some respondents argued there should be no adjustments as they believed the Standard should be applied to everyone equally. A few pointed out that making adjustments for certain buildings may exempt or provide extensions for second or luxury homes, and others thought that making adjustments for certain groups without considering the fabric of their home or energy needs lacked nuance. Others suggested that half measures will not work and therefore exemptions or extensions risked diluting the standards.

More clarification required

Several respondents requested further information before being able to comment. Some wanted to know for whom or what type of building the Scottish Government was proposing exemptions and modifications before commenting. Others asked for a plan with greater detail, including an outline of costs, technological developments, and feasibility for certain building types and areas.

“Significant further development is needed on cost (what is included) and feasibility for many property owners.” - The Architectural Heritage Society of Scotland (AHSS)

“The RSE suggests that specific reasons for exemptions should be explicitly articulated. The current proposal to “exempt those who can’t, or perhaps should not have to, meet the Heat in Buildings Standard” is vague. This increases ambiguity about who will be granted exemptions and on what basis. It allows for considerable ‘special pleading’ which risks feeding public cynicism and detachment, and hampering progress” Royal Society of Edinburgh

Suggested eligibility for exemptions or time extensions

The most prevalent theme at both Q21 and Q23 was support for providing traditional buildings with exemptions, a modified standard, or time extensions. The definition varied among respondents but included historic or listed buildings, buildings in conservation areas, and anything build before certain dates e.g. 1920. Respondents suggested traditional buildings will have unique material needs which may make the transition less practical or more expensive. Others worried about the effect the transition would have on the fabric of traditional buildings, particularly if listed. In Q23, some respondents noted that where they had previously supported exemptions or modified standards for traditional buildings at Q21, they actually preferred more time as it would ensure a transition at some point but at a time when clean heating technology was better suited to older buildings.

Many respondents at Q23 mentioned that anyone in need of more time should be eligible. This view was expressed almost entirely by individuals. Costs were highlighted as the biggest concern and the reason that anyone should be allowed extra time. Similarly, many, of which several were organisations, supported time extensions on a flexible basis. These respondents supported flexible eligibility criteria, allowing people more time if they needed it, rather than automatically receiving it due to certain characteristics of their property.

“[We] consider it is pragmatic to allow for extra time in some cases. The cases for these will emerge over time; there should be a commitment to coming to a reasonable / proportionate provision which would act as precedent.” - City of Edinburgh Council

Many supported exemptions, modified standards and extended time for reasons of affordability for groups that might find it more challenging to fund the transition to clean heating. Those highlighted, from most to least prevalent, were, low-income households, rural or off-grid properties, elderly people, and households with disabled members.

Other groups mentioned by several or fewer respondents also due to affordability, listed from most to least prevalent, included:

• First-time buyers. as it was felt it could impact a generation from accessing the housing market.
• Small businesses.
• Care homes and hospitals.
• Buildings housing public services such as schools, libraries and community centres.
• Non-profit organisations.
• Community owned buildings.
• Private landlords and private landlords with tenants in situ.
• Young families.
• Families living with a carer.
• People who have inherited a property but are not in a financial position to upgrade.

Finance providers and organisations were more likely than other organisation types to mention the elderly, those on low incomes and first-time buyers.

Some organisations explicitly opposed a blanket exemption, although not extensions, for first-time buyers, for two reasons. A few stated that first-time buyers were not a homogenous group and should not be considered as such. A small number of other respondents highlighted that exempting first-time buyers could lead to situations where certain properties were never transitioned as they were always bought by first-time buyers.

Several suggested tenement and multi-occupancy flats could require greater flexibility due to both costs and the difficulty in managing communal works. Other reasons for exemptions and extensions each raised by some included:

• Buildings due for demolition in the near future.
• Those with newly installed heating systems using bioenergy.
• Exempting all homes and applying the standard only to new homes.