Tackling Fuel Poverty in Scotland: periodic report 2021-2024

Section 3: Next steps in 2025-27 reporting period

Policy actions, legislation and investment

Over the next three-year reporting period, the Scottish Government will continue to take the important steps to support our tackling fuel poverty ambitions, including long-term improvement in raising the energy efficiency profile of Scottish homes. That is why, in continuing to tackle the poor energy efficiency of fuel poverty, we will:

• Continue to invest in our heat and energy efficiency delivery programmes, and have already committed to invest over £300m in our heat in buildings programmes in 2025/26.
• Lay new EPC regulations in Parliament during 2025 and aim to bring these into force during the second half of 2026. These regulations will legislate for the new EPC rating system outlined in Section 2 above.

We also know that that households in the lowest income bands have the highest rates of fuel poverty. Therefore, in line with tackling low household income as an important part of our child and fuel poverty ambitions:

• The Scottish Budget for 2025-26 continues to allocate over £3 billion a year to policies which tackle poverty and the cost of living. This includes providing free bus travel for 2.3 million people, including everyone aged over 60, offering free school meals to all pupils in primaries 1 to 5, and delivering five family payments, including our Scottish Child Payment, which provide unparalleled support to low-income families.
• We will continue to deliver progress on our national mission to eradicate child poverty, with action focused on increasing earned incomes, reducing the cost of living, and maximising incomes from social security and benefits in kind. An annual progress report on child poverty for the period 2024-25 will be published by the end of June 2025.
• We will consult with a wide range of stakeholders to develop our third Tackling Child Poverty Delivery Plan for the period 2026-31. This will build on the considerable evidence and action taken to date and will commit further action to deliver on the ambitious child poverty targets set for 2030.
• In addition to continued support through our Winter Heating Payment and Child Winter Heating Payment, ahead of this coming winter we plan to bring forward regulations to introduce a universal Pension Age Winter Heating Payment in winter 2025/26 for all pensioner households in Scotland. This universal payment will provide much needed support not available anywhere else in the UK and will support older people across Scotland as we had always intended to do before the UK Government’s decision to cut the payment. We are forecast to invest £101 million in our universal Pension Age Winter Heating Payment, supporting 812,000 pensioner households.

However, as this report highlights, we can only do so much within our devolved powers, with high energy prices being the greatest driver of fuel poverty in Scotland and disproportionately impacting fuel poverty rates. That is why we remain committed to working with the UK Government and continue to call for reform of the GB energy markets.

• We will continue to engage with UK Government Ofgem, suppliers and consumer organisations, to advocate for the delivery of a social tariff (targeted bill discount) across Great Britain.
• We will continue to work closely with National Energy System Operator, the UK and Welsh Governments on the Strategic Spatial Energy Plan for Great Britain as it develops, to ensure that it aligns with and respects devolved powers, planning mechanisms and ambitions, delivers real benefits for the people and communities of Scotland and supports our ongoing efforts for a just transition.
• We will continue to call for the rebalancing of gas and electricity prices, which must take cognizance of the necessity to tackle fuel poverty.
• We will continue to engage with the UK Government on their Review of Electricity Market Arrangements (REMA) to ensure the interests of Scottish consumers are represented, calling for any wholesale market reforms progressed to deliver reduced consumer costs.

Local and National partnership and influencing

To support local authorities to tackle fuel poverty, in line with our 2040 target, in addition to our continued investment in Area Based Schemes we will:

• Carry out an evaluation of the development of the first iteration of LHEES. This will consider the lessons learnt by local authorities, external contractors and key stakeholders and will inform the next iteration of LHEES due in 2028.
• Publish refreshed LHS guidance in 2025, ensuring appropriate links are made between fuel poverty, energy efficiency, achieving heat decarbonisation and climate change.
• Publish the next local authority estimates from the Scottish House Condition Survey in 2026, which will be based on a three-year average for 2022 to 2024.