4 August 2025
By email to: enquiries@fuelpovertypanel.scot
Dear Panel Members
Thank you for inviting Consumer Scotland to review the Scottish Government’s first Periodic Report of its Fuel Poverty Strategy, and to comment on the potential implications of the decision to delay the introduction of the Heat in Buildings Bill (HiBB). As the statutory advocate for energy and heat network consumers in Scotland, we welcome the opportunity to assist the Panel ahead of its response to Scottish Ministers, by assessing how this postponement may affect progress towards the statutory fuel poverty targets, as set out in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019.
Periodic Report 2021 – 2024
The overall fuel poverty rate in Scotland has increased by almost ten percent since the passage of the 2019 Act.[1] Fuel poverty is also more entrenched and therefore more difficult to tackle, with a greater proportion of households now living in extreme fuel poverty.[2] Consumer Scotland would highlight that these figures, and the trend of fuel poverty rates continuing to increase, makes meeting the first interim target in 2030 extremely challenging.[3] We therefore welcome Scottish Government’s recognition, as outlined in the Periodic Report, that it is currently some distance from achieving its statutory targets and that there is significant work to do if these targets are to be met.
We recognise that there are factors that are outwith the Scottish Government’s control driving the increase in fuel poverty, particularly in relation to energy prices and the pressures this places on household budgets. In order to get progress back on track towards meeting its fuel poverty targets, the Scottish Government should now review the actions in its 2021 Fuel Poverty Strategy, in line with section 6 (5) of the 2019 Act, to ensure these are fit for purpose. We would also reiterate the need, as highlighted in our previous submissions to the Panel, for the Scottish Government to outline its fuel poverty reduction plan towards 2045, which sets out how the Strategy’s actions will combine to tackle fuel poverty across its four drivers. This will help build to confidence in the process, and develop an enabling environment for stakeholders and communities invested in eradicating fuel poverty.
Impact of the delay to the Heat in Buildings Bill
Evidence suggests that policy uncertainty dampens demand for the earlier adoption of low carbon technologies. Consumer Scotland’s research into the consumer experience of such markets highlighting that consumers’ willingness to install new technologies is at least in part linked to their perception of stable and supportive policy frameworks, particularly around the availability and ease of access of support schemes.
In terms of market impact, uncertainty can discourage investment in new capacity, training and technology, which ultimately impacts consumers. The Green Heat Finance Taskforce has highlighted the need to foster market confidence by providing clear signals around the direction of policy development, whilst Audit Scotland has noted that many companies are reluctant to enter or expand in the sector without firmer regulatory signals and supportive incentives.
However, despite these downsides, our assessment is that the ultimate impact on statutory fuel poverty targets will depend less on timing, and more on the content, funding and sequencing of the HiBB – i.e., if the delay results in a better overall package of measures, then this is likely to be beneficial for consumers. For example, we understand that the HiBB will now include provisions to boost heat network development through requirements for large, non-domestic premises, including powers to require public sector buildings to connect to district heating where available. Providing an anchor load in this way should create demand assurance for further heat network development, in line with Local Heat and Energy Efficiency Strategies, thus expanding the availability of low-carbon alternative heating options for consumers. The delay in the HiBB also provides an opportunity to align policy with the future direction of electricity market arrangements – particularly around wholesale price signals and delivering cost-saving benefits from the electrification of heat – with the Secretary of State having recently confirmed the UK Government’s decision to retain a single national GB-wide wholesale market.
Converting Scotland’s Home Heating
In June Consumer Scotland published the findings of its investigation into the market for low-carbon technologies and energy efficiency measures. The report highlights that the forthcoming HiBB is an opportunity to align our climate ambitions with the need for greater fairness and accountability in the home retrofit sector. Reducing fuel poverty is one of the benefits that can be achieved by getting this right. The report provides clear, practical recommendations to help ensure that consumers are empowered, supported and protected through every stage of the home heating transition – from initial decisions to installation protections, to redress when things go wrong. Five of our report’s nine recommendations specifically highlight actions that the Scottish Government can take:
- The Scottish Government should make Energy Performance Certificates clearer and more action-focused, supported by robust quality and enforcement systems
- The Scottish Government should lead inclusive campaigns around benefits, choices, and support – to empower consumers around the home heating transition
- As demand increases, the Scottish Government should ensure that consumers have access to trusted, independent advice
- By the end of 2026, the Scottish Government should review consumer funding for impact, fairness, and effectiveness – and streamline processes to remove unnecessary barriers
- The Scottish Government, working with sector partners, should deliver a robust Quality Assurance and consumer protection policy to build confidence and protect consumers
The Panel may wish to consider how these recommendations can complement its response to Ministers on the Fuel Poverty Strategy Periodic Report. We would welcome further engagement with the Panel on our investigation report findings and recommendations.
Conclusion
With fuel poverty rates continuing to increase, we welcome Scottish Government’s recognition that that considerable work is required if its statutory fuel poverty targets are to be met and consumers in Scotland are to be lifted out of fuel poverty. The Scottish Government should act now to refresh the actions in the 2021 Fuel Poverty Strategy and outline a plan for fuel poverty reduction towards the overall target date in 2045. The delay to the HiBB may have resulted in a brief period of policy uncertainty, but ultimately the impact on fuel poverty rates will depend less on timing, and more on the content, funding and sequencing of the HiBB. There are reasons for cautious optimism in some of the new proposals for the Bill. To maximise the opportunity that the Bill presents, the Scottish Government should engage proactively with the relevant findings and recommendations of Consumer Scotland’s investigation into Scotland’s home heating market to ensure that consumers are empowered, supported and protected in every step of the energy transition.
Yours faithfully,
Alistair Hill
Head of Energy Transition