Energy Performance of Buildings (Scotland) Regulations 2025: technical consultation analysis

Executive Summary

Introduction

The Scottish Government plans to lay new Energy Performance Certificate (EPC) regulations before the Scottish Parliament later in 2025, which (if passed) will come into force in 2026. To support the planned changes, the Scottish Government developed a range of proposals designed to cover the cost of delivering the new operational framework. In order to inform and finalise the changes, the Scottish Government conducted a technical consultation to seek feedback on their current proposals.

The public consultation ran for just over six weeks, between February and March 2025. It asked seven questions in total, and sought feedback on three broad issues:

• Lodgement fees
• The introduction of an on-site audit and inspection function
• Penalty charges

Three workshop events were also held to gather qualitative feedback. All attendees represented organisations working across the property and/or energy sectors.

Respondent Profile and Caveats

A total of 29 written responses were included in the final analysis. Of these, 16 responses were received from organisations and 13 from individuals. Organisational responses were received from a range of different sectors, including those focused on the built environment, local authorities, Approved Organisations (AO), those focused on real estate, and energy focused organisations.

In addition, 46 people attended the workshops, all of whom represented organisations. It should be noted, however, that there may be some overlap in workshop attendees and those who provided written responses. It was possible for respondents to take part in both ways.

Due to the small number of responses provided overall, elements of the reporting were often based on the feedback from just one or two respondents. The small numbers meant it was difficult to identify recurring topics or themes. As such, the report sets out a high level summary across the breadth of comments and feedback provided.

The findings reflect only the views of those who chose to respond to this consultation. It should be noted that respondents to a consultation are a self-selecting group, and only a small number of responses were received on this occasion. The findings should not, therefore, be considered as statistically robust or representative of the views of the wider population. The small number of responses do, nevertheless, reflect the fact that this was a focused, technical consultation, which was very much targeted at a specialist audience within the EPC assessor and enforcement communities of interest.

Key Findings

Overall, between half and two thirds of respondents who provided a rating at the closed questions supported each of the proposals:

• 19 out of 28 respondents (68%) supported the use of a statutory fee levied on lodgement of EPCs to fund the new elements of the regulatory regime
• 14 out of 28 respondents (50%) supported raising the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs
• 17 out of 28 respondents (61%) supported a review of the lodgement fee level within two years of the new regulations coming into force
• 16 out of 28 respondents (57%) supported reviewing the on-site audit and inspection function within two years of the new regulations coming into force
• 16 out of 25 respondents (64%) supported reviewing the penalty charges issued to those who do not provide a valid EPC within two years of the new regulations coming into force

Across each of the proposals, most of the opposition came from individuals rather than organisations. At each question, most (although not always all) organisations were supportive or neutral, while individuals were more mixed between those who supported, opposed or were neutral about the proposals.

Beyond the specific proposals, respondents also raised a number of issues which they felt needed to be addressed. Those mentioned repeatedly throughout consultation responses, between different respondent groups, and across both the written and workshop event feedback included:

• The need to tackle the quality of EPC assessments and the resulting data/certificates
• The need for more effective monitoring, enforcement, and implementation of penalty charges to be issued to those who do not provide a valid EPC
• Consideration of the introduction of fees to access the data held on the EPC Register, particularly where this is utilised for commercial purposes

Lodgement Fees

Funding the EPC Regulatory Regime via a Statutory Fee on EPC Lodgement

Of the 28 respondents who answered the closed part of this question, 19 (68%) supported the proposal while seven (25%) opposed it. All opposition came from individuals.

Those who supported funding the EPC regulatory regime via the addition of a statutory fee levied on the lodgement fee typically suggested it was sensible, reasonable, and consistent with the current system. Respondents agreed that the system should be paid for by the customer or service user. A few (including organisations and an individual) also felt that the proposed fee would not adversely affect consumers. Respondents did stress, however, the need to ensure the fee remained reasonable in the future, that there needed to be transparency in how the fee is set and reviewed, and information on how the increased revenue and regulatory functions would enhance EPCs and boost consumer confidence. A few also suggested that consideration be given to charging for access to the EPC register data in order to more fairly share or distribute the costs between different service users. This was also a common point raised in the workshop events.

Of the individuals who opposed this proposal, three argued that it represented a tax, one felt it was an unnecessary cost, and one felt that the EPC function itself was not fit for purpose. Another argued that the EPC register was used by many different parties and so funding via the lodgement fee alone appeared unfair.

Raising the Lodgement Fee by £3.40

Of the 28 respondents who answered the closed part of this question, 14 (50%) supported the proposal while 12 (42%) opposed it. Opposition was mostly (but not exclusively) noted by individuals.

A range of reasons were given for supporting the proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs. This included views that:

• The increase in the fee would cover the costs of the additional regulatory services which will require additional resources, and ensure the system is well supported and quality assured
• The increase would be broadly in line with inflation, which was considered reasonable
• The fact that the proposed costs would remain lower than some other European countries/the European average was welcomed

It was noted, however, by a range of organisational sectors across both the written responses and workshops (and by at least one individual) that the increase in the fee (especially when combined with the reduced lifespan of the EPC from 10 years to five years) would have significant financial impacts for social housing providers. There were also concerns that the increase could have a disproportionate impact on landlords and property agents operating in remote, rural and island locations. One individual also suggested that the fee should be implemented as a percentage of the total cost rather than a flat fee, and argued that there needed to be a direct mechanism for lodging an EPC with the register. Workshop attendees suggested that a mechanism should be included to accommodate inflationary increases.

The organisations that opposed this proposal tended to do so due to the use of a flat fee increase which would be applied to all sizes, types and values of property, as well as the scale of the increase. Individuals who opposed did so either because they viewed this as a tax or perceived there to be problems with the current quality of EPCs. Individuals were also concerned about the scale of any future price increases, and that the additional cost would be passed on to customers.

Review the Lodgement Fee within Two Years

Of the 28 respondents who answered the closed part of this question, 17 (61%) supported the proposal while eight respondents (29%) opposed it. Again, most of the opposition (but not all) came from individuals.

Those who supported the proposal to review the lodgement fee level within two years of the new regulations coming into force felt it was sensible to include a timely review in order to consider whether the fee amount was appropriate and allowed the regulatory functions to operate effectively. Such a review would also provide the opportunity to take account of inflation and other factors relevant to the economic and policy landscape. A few suggested that regular reviews should be undertaken on an ongoing basis, and that the review should consider the system more widely. Respondents caveated their support, however, that reviews should not automatically bring price increases, and any increases needed to be justified and necessary to cover the costs of the regulatory framework.

The reasons for opposing this proposal were generally split between those who opposed the lodgement fee in principle or opposed any increases to this, and those who felt that the timescale or approach to the review could be adjusted to be more efficient.

On-Site Inspection and Audit Function

Of the 28 respondents that answered the closed part of this question, 16 (57%) supported the proposal while just four respondents (14%) opposed it. All opposition came from individuals.

Those who supported the proposal to review the new on-site audit and inspection function within two years generally considered it a sensible approach. It was seen as important to consider the effectiveness of this process; to ensure it was working as intended; and to identify any potential improvements or amendments that were needed. Workshop attendees also considered the use of on-site audits and inspections helpful in tackling perceived poor quality and inaccuracies in assessments.

Practical considerations for on-site audits and inspections were highlighted by respondents, both in the written responses and in the workshops. This included challenges in gaining access to properties, supporting vulnerable tenants, and data sharing/data protection issues. Workshop attendees also stressed the need to consider deliverability in remote, rural and island areas, where the practicalities of distance, access, and the limited number of local assessors could present challenges. Clarity was also said to be required around who would carry out the audit and inspection function and be responsible for the competency of these workers. It was felt that a collaborative approach was needed with Approved Organisations (AOs) to avoid inconsistency.

The individuals who opposed a review of the on-site audit and inspection function did so because they opposed the introduction of this function itself. One was also concerned about duplication of effort between the audit function carried out by accreditation bodies and those proposed. Another felt that the on-site audit and inspection would not improve quality of EPCs, and argued enforcement action was required instead. Similarly, a range of additional monitoring, training and enforcement requirements were highlighted in the workshops to tackle quality and accuracy issues.

Penalty Charges

Appropriate Level of Penalty Charges

A range of views were expressed by respondents when asked about the appropriate level of penalty charges proposed under the new regulations. Some were strongly supportive of penalty charges and increasing these in some or all circumstances. Others were against or ambivalent about the prospect of increasing penalty charge levels. Some (mainly individuals) were against the use of penalty charges at all.

Other key suggestions or issues discussed by respondents included:

• Penalty levels should be sector specific rather than flat rates
• Inflationary increases were considered sensible as a starting point, with the charge levels adjusted for inflation on an ongoing basis
• Retention of the current penalty levels because they are already above those proposed in England and Wales, and have rarely/never been imposed
• The need to strengthen the monitoring and enforcement of EPC regulations otherwise penalty charge levels are redundant
• Opposition to the use of penalty charges at all, or concern that the charges were set too high

Review of Penalty Charges within Two Years

Of the 25 respondents who provided a rating at the closed element of this question, 16 (64%) supported the proposal while five (20%) opposed it. Again, all opposition came from individuals.

Those who supported the proposal to review the level of penalty charges within two years felt this was appropriate and sensible. It was felt that a review would offer a useful opportunity to ensure penalty charges were set at a fair, appropriate, and effective level; that the correct balance had been stuck between lodgement fees and penalty charges; and to look at both penalty charges and the on-site audit and inspection functions to determine if any changes are required to support improvement. Again, a few advocated for more regular reviews to provide longer term monitoring and allow for inflationary adjustments.

However, it was stressed that enforcement would be critical, otherwise penalty charges would be ineffective. This was a key concern across the workshops in particular, with attendees in all three groups discussing a perceived lack of enforcement currently. Tackling enforcement was considered to be more important than penalty levels at this stage.

The individuals who expressed opposition to this proposal did so again because they opposed the use of penalty charges, they felt it was already difficult to stay abreast of legislation, and because penalty charges had never been applied in practice.

Other Comments

Both written respondents and workshop attendees were also invited to provide other feedback. Key issues included:

• The perceived low payments made to assessors and low charge rates for EPC lodgement and auditing
• EPC affordability and concerns about rising costs due to the combination of the current proposals, the need to renew EPCs every five years (rather than every 10 years), and other changes imposed on the sector
• The perceived value of EPCs or gaps in their capabilities due to assumptions used in the assessment process, the use of out of date information and a renewables lag, and lack of quality and accuracy
• The competency and integrity of assessors needing to be strengthened to ensure EPCs are accurate and consistent
• The need to consider using a map based navigator for EPCs

Finally, workshop attendees also highlighted issues for consideration in remote, rural and island areas. In particular, costs and workforce capacity, as well as ensuring the EPC itself reflected the differences relevant to the environment and the nature of the properties in these areas.