Minimum Energy Efficiency Standard: letter to Cabinet Secretary for Housing

To: Cabinet Secretary for Housing 
Cc/ Cabinet Secretary for Climate Action and Energy   

From: Professor Russel Griggs OBE, Chair, Regulatory Review Group
c/o RRG Secretariat     

Dear Mairi,

I am writing as Chair of the Regulatory Review Group (RRG) to provide independent advice on the proposed Private Rented Sector (PRS) Minimum Energy Efficiency Standard (MEES) which would require most PRS properties to reach Energy Performance Certificate (EPC) Heat Retention Rating (HRR) band C of the reformed EPC before they can be let to new tenants.

This note provides an overview of the RRG’s role and details recommendations on the pace of change, and enforcement and communications considerations.

Regulatory Review Group (RRG)

The independent RRG was re-established by the Scottish Government as part of the New Deal for Business to support Scottish Ministers in improving the regulatory environment for businesses and their involvement in that process. The RRG’s membership is detailed in the Annex. The RRG consider upcoming regulatory developments and as part of its work programme identified the PRS MEES as a scrutiny priority.

The RRG’s objectives are to:

1. Work constructively with the Scottish Government to ensure that policy officials and relevant Ministers are sighted on implementation challenges with regulations early in development.
2. Deliver purposeful and targeted written and verbal advice to the Scottish Government, drawing upon extensive expert insight from business and regulators across Scotland.
3. Support the delivery of the New Deal for Business by ensuring that the potential barriers to the success of Scottish Government policies are removed through an improved understanding of the practicalities of implementation.

The RRG’s remit is to examine and identify implementation challenges and appropriate mitigations of regulation. The RRG does not provide a view on the appropriateness of substantive policy or decisions to be taken on legislative priorities.

Private Rental Sector Minimum Energy Efficiency Standard

Along with RRG members, I met with your officials on Thursday 26 June 2025. Your officials provided an insightful presentation on the policy issue and provided detailed responses to our questions. The proposed regulations have the potential to improve energy efficiency in the Private Rented Sector - and as a result, lead to a reduction in both fuel poverty and carbon emissions. It is in the spirit of supporting this endeavour that this advice is provided.

The following recommendations have been made by the RRG for consideration as part of the policy development and legislative process:

1. The RRG notes its concern around the connection between the PRS MEES and the ongoing work on reform of the EPC, and recommends that careful thought is given to the sequencing of both policies, including the timing of any funding being made available. Currently, the EPC reform regulations are scheduled to be laid before parliament in autumn 2025, with the PRS MEES regulations to be laid by January 2026. The reformed EPC would come into force in autumn 2026, with the PRS MEES applying to all new tenancies from 2028. The group is concerned that the introduction of the PRS MEES may need to wait until EPC reform has been implemented, as the MEES relies on the new, reformed version of the EPC being in place to fully function. There is a risk that the timescales presented are beset by delays in implementation or funding for one or both policies, leading to a dysfunctional and confusing policy landscape, and potentially reducing the amount of time available for landlords to make the necessary improvements to their properties ahead of the implementation of the PRS MEES. I recently met with Ms McAllan and we discussed looking at the different policy strands ongoing strategically to ensure successful implementation and achievement of desired outcomes, I will write to you further on this shortly.  
2. Changes to the policy may incentivise property owners to operate their properties as short-term holiday lets, instead of longer residential leases which could be a cause for concern. Short-term holiday lets are currently set to be excluded from the scope of the regulations, as the fuel poverty implications do not apply, and energy bills are usually paid by the property owner. The RRG would like to seek assurances that this risk has been considered by the policy team and that widespread moves to change property tenure will not become an unintended consequence of the PRS MEES. 
3. It is important that the cost of enforcement of this policy is considered, with additional resources being allocated if required. Local authorities are set to be the enforcement authorities, which will require additional local government resources – alongside the cumulative impact of several concurrent policy initiatives which are also to rely on enforcement by local authorities. The RRG recommends that the resourcing of enforcement is given due consideration, as there is a risk that these regulations may go largely unenforced – or that they may draw local authority resources away from other areas of importance.

The RRG invites your policy officials to return once this work has progressed, to provide a further update.

A copy of this letter will be published on the RRG’s webpage and has been sent to your Ministerial colleagues with an interest in this area.

The RRG would be happy to discuss the above recommendations with you and would welcome an update on how the Scottish Government intends to take this forward during the policy development and legislative process.

Yours sincerely,

Prof. Russel Griggs OBE
Chair, Regulatory Review Group

Annex

Membership of RRG

• Chairman, Professor Russel Griggs OBE
• Fiona Richardson, Convention of Scottish Local Authorities (CoSLA)
• James Fowlie, Convention of Scottish Local Authorities (CoSLA)
• Craig Brown, Society of Chief Officers of Environmental Health in Scotland
• David MacKenzie, Trading Standards
• Ewan Macdonald-Russell, Scottish Retail Consortium (SRC)
• Susan Love, Association of Chartered Certified Accountants (ACCA)
• Douglas White, Consumer Scotland

Members are representatives of business, regulators and consumers, however, are acting independently in their RRG involvement.