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

On-Site Audit and Inspection Function

The consultation paper set out the rationale and purpose of including a new on-site audit and inspection function as one of the three new regulatory functions. It was argued that this would provide direct benefit to service users in enhancing verification procedures to ensure that their EPC and rating is accurate.

The Scottish Government propose strengthening the current desk-based audit of EPCs and conducting on-site inspections of a sample of properties in order to verify accuracy and give greater confidence to consumers regarding the reliability of their EPCs. These changes would be in line with the new European Union (EU) requirement for on-site verification of EPC assessment data in the Energy Performance of Buildings Directive. The additional audit function would be exercised independently of AOs, assessors, and property owners to ensure absolute objectivity over and above the current desk-based audits.

It was suggested that this regulatory function could be exercised on a time-limited basis until evidence was clear that a return could be made to desk-based-only oversight by the AOs. As such, the consultation proposed that the on-site audit and inspection function would be reviewed within two years of the regulations coming into force. It was suggested that this function may not be needed over a longer period if on-site inspections verify that EPCs are accurate and reliable, and that desk-based auditing is sufficient. The lodgement fees could then be reduced to reflect the removal of this function.

Review On-Site Audit and Inspection Function Within Two Years

Q4. To what extent do you support or oppose the Scottish Government’s intention to review the new on-site Audit and Inspection function within two years of the new regulations coming into force, to see if it remains appropriate?

Of the 28 respondents who answered this question, 16 (57%) supported the proposal to review the new on-site audit and inspection function within two years. A further eight (29%) neither supported nor opposed the proposal. Only four respondents (14%) strongly opposed this proposal, all of which were individuals.

Reasons for Support

Those who supported this proposal considered it a sensible approach. It was seen as important to consider the effectiveness of the audit and inspection process; to ensure it was working as intended, delivering the desired outcomes and meeting the intended objectives; and to identify any potential improvements or amendments required.

Specific elements that respondents felt the review should consider included (typically mentioned by one respondent each):

• EPC accuracy and confidence in ratings
• Operating costs and value for money
• Anomalies and the need for additional training and clarifications
• Whether the process provides proportionate support specific to the area
• Unexpected technical challenges
• Unintended consequences

Again, it was suggested that the two year timescale for the first review was sensible as the system would have time to bed-in and for data to be gathered to evidence the impact. One individual also noted that it would be important to review the changes once their effects can be assessed.

One organisation supported the use of an audit as they felt it could be difficult to conduct post-inspection on-site audits.

Another organisation again suggested that regular reviews should be undertaken.

Caveats to Support

Two organisations highlighted practical considerations for the on-site audit and inspection function and the potential challenges faced by auditors in gaining entry to properties. One questioned how compliance would be secured without infringing on property rights or creating tensions with occupiers. The other suggested there was a need for possible opt-out or alternative solutions in such circumstances.

Other challenges identified included (one respondent highlighted all three issues):

• The financial burden (both on auditing bodies and property owners), which would require careful consideration particularly due to the increase in lodgement fees
• That auditing EPCs after completion may be challenging where properties have been modified or circumstances have changed since the original assessment
• The consideration of practical solutions to address complications and avoid unintended consequences (e.g. unfairly increasing Professional Indemnity insurance cover for assessors undertaking EPCs)

One organisation cautioned that the audit and inspection function, and the review of this, needed to be well thought out to avoid any unnecessary changes in future, and that it should be designed in collaboration with AOs in order to avoid inconsistency.

Similarly, another organisation sought clarification around which body or organisation will be tasked with carrying out the audits and ensuring auditors have the necessary skills, qualifications and independence to perform the role. They also stressed that a consistent and transparent framework will be needed to guide the auditing process to ensure fairness and avoid inconsistency.

One organisation stressed that any changes or improvements identified as part of the review needed to be implemented in a timely manner. Meanwhile, another organisation suggested that any income generated via fines levied from inaccuracies in EPCs identified as part of the audit and inspection process should be reinvested into the system to support sustainability and improvement. As fines will be applied only for missing EPCs and not for inaccuracies, it is not clear whether this respondent misunderstood the proposals in this respect, or was recommending this as an additional area to be subject to fines.

Reasons for Opposing

One individual who opposed the proposal to review the on-site audit and inspection function sought clarity over the potential for overlap between the audit function carried out by accreditation bodies and the one being proposed as a new regulatory function to be carried out by the Scottish Government.

Two individuals appeared to oppose the on-site audit and inspection function more generally rather than the need to review it. One suggested this should be abolished and considered it to be “government overreach”. The other felt this was unnecessary, a waste of money and resources, and would not be impactful on climate change.

The fourth individual who opposed this proposal did not detail their reasons why.

Another individual who neither supported nor opposed the proposal to review the on-site audit and inspection function also provided negative comments on the perceived effectiveness of this function more generally. They felt that on-site audits would not make any difference to the quality of EPCs. Rather they suggested that the quality of assessors, potential conflicts of interest, and poor practice needed to be addressed with enforcement action and fines implemented by a central government team.

Feedback on On-Site Audits and Inspections from the Workshops

Again, feedback from the workshop events largely echoed the views expressed in the written consultation responses.

On-site audits were generally supported in order to tackle the perceived poor quality and inaccuracies in assessments, and to provide greater consistency and confidence in the system. Several attendees flagged problems with the quality and accuracy of some EPCs, which they perceived as being due to assessors spending too little time on-site, and ‘bad actors’ within the system. A few also suggested that quality suffered due to the desire or need to charge low prices for the service.

In order to tackle quality issues, questions were asked about the provision of additional training. This included whether remedial training could be introduced for those identified as delivering poor quality assessments and/or inaccuracies, or whether upskilling courses should be required at regular intervals. A few specific examples were outlined (by one attendee each), including:

• The potential for the introduction of a monitoring system similar to Ireland’s to address quality (where assessors start with a defined number of ‘points’ and have points deducted for quality infractions or are ‘red-carded’ for serious offences)
• That a clear process was needed for consumers to report poor performance and potential collusion, and to seek redress
• That the EPC Register could automatically flag issues of concern, for example, if one assessor submitted a large number of assessments in too short a time period

Again, practical challenges were highlighted. In particular, attendees flagged accessing properties as being an issue, both for landlords and assessors generally, and as a challenge for on-site audits and inspections. This was particularly problematic where there were vulnerable tenants. Other practicalities for consideration included coordinating joint site visits with other organisations which could significantly increase costs, and how to deal with cancellations on the day. It was also suggested by one attendee that on-site auditing would be much more expensive than the consultation paper suggested, and that monitoring at a distance through shared collaboration would be better.

Attendees also stressed the need to consider how deliverable on-site audits and inspections would be in remote, rural and island areas. They noted that distance, access, and the limited number of local assessors could make this challenging.

Other issues discussed by just a few attendees each included:

• That auditing should be a two-way process which identifies deficiencies in the current system and seeks to remedy them to ensure people get the proper recognition in their EPCs regarding their property’s energy efficiency
• A need to provide clarity and confirmation around how data sharing protocols might work in practice. However, data protection was also flagged as possibly presenting barriers or challenges for data sharing between organisations
• The ineffectiveness of the current system of monitoring and enforcement (by local authorities) was again highlighted, with attendees suggesting that a central body should be responsible for this