Tackling Fuel Poverty in Scotland: periodic report 2021-2024

Ministerial Foreword – Acting Minister for Climate Action

Everyone should have a warm, safe and affordable home that meets their needs in a place where they want to live. Tackling the four drivers of fuel poverty is essential to achieving this vision and plays an important contribution to the Scottish Government’s overarching priorities to eradicate child poverty and tackle the climate emergency.

Since the publication of our first Fuel Poverty Strategy in 2021, we have continued to progress action to tackle fuel poverty in line with our statutory targets - which remain the most ambitious in the UK and as demonstrated through the energy and cost crisis, they are also now the most challenging to achieve unless fundamental changes are made to the GB energy market. To ensure the external scrutiny of the Scottish Government’s approach for tackling fuel poverty and as required under the 2019 Act, an independent statutory advisory non-departmental public body; the Scottish Fuel Poverty Advisory Panel was established in 2022 which supports the ethos of an evidence-based approach to fuel poverty policy and monitors progress towards meeting the targets.

This first periodic report is an important milestone in demonstrating the progress made over the last three years through the actions that were set out in the Strategy, but equally from taking actions not contained within the Strategy, which illustrates the cross-cutting nature of fuel poverty and the changing context to which the Scottish Government has had to respond to since publication in 2021.

We have faced unprecedented times with a cost-of-living crisis and the significant rise in energy bills, alongside other essentials, impacting all households across the country, particularly those on the lowest income; specifically, the global events we have witnessed in the last three years have had a substantial negative impact upon the progress that was being made in tackling fuel poverty. The Scottish Government has tried to respond and mitigate the effects of high energy prices and continued to improve the energy efficiency of our housing stock, which stands at 56% of homes rated as EPC band C or better^[1], but we are at present a considerable way from our statutory targets. There is undoubtedly still more work to do.

Whilst energy prices are beginning to fall, they are still significantly higher than pre-pandemic levels and are continuing to drive high fuel poverty rates^[2]. The latest Scottish Household Condition Survey (SHCS) suggests that despite improvements to the energy efficiency of the housing stock and increases in median household income between 2022 and 2023^[3], fuel poverty has risen from 31% to 34%. The rate of fuel poverty is inseparable from wider factors such as the cost-of-living crisis, and with energy markets remaining reserved, we will continue to work with the UK Government to ensure that decisions consider the needs of Scotland and the potential impact on fuel poor households.

As Acting Minister for Climate Action, I hosted an energy consumers roundtable in Autumn 2024 to work with stakeholders and partner organisations on how to protect and represent the interests of priority, rural and island, and business energy consumers as we inform and strengthen our engagement with the UK Government. This includes continuing to call for the introduction of a social tariff mechanism to provide the right and fair support for some of the most vulnerable people in society, which has received support from across industry and the third sector.

In November 2024, I established a social tariff working group bringing together stakeholders, including suppliers and third sector organisations, to co-design a deliverable social tariff policy. The working group’s final report and recommendations were sent to the UK Government in March 2025, demonstrating cross-sector consensus on the way forward: targeted support in the form of a discount on energy bills, applied automatically and proportionate to need. I remain committed to working with the UK Government, Ofgem, suppliers and consumer organisations, to advocate for the delivery of this crucial policy across Great Britain.

Tackling fuel poverty requires a long-term sustained effort – I am clear that no Government can do this alone – this requires a whole sector approach with suppliers, consumers, the regulator and most importantly, the UK Government to use the necessary and fundamental policy and fiscal levers towards reducing fuel poverty.

The Scottish Government remains committed to tackling fuel poverty in Scotland, especially when our country has an enormous potential for renewable energy, which can and should benefit households and communities across the country through lower energy bills. I look forward to receipt of the Scottish Fuel Poverty Advisory Panel’s upcoming statutory report, which will consider the progress made by the Scottish Government over the past 3 years and help to inform our next steps.

Dr Alasdair Allan

Acting Minister for Climate Action