Local Government and Communities Committee

Meeting date: Wednesday, December 19, 2018

Official Report 711KB pdf

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Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill: Stage 1

Good morning and welcome to the 36th meeting in 2018 of the Local Government and Communities Committee. I remind everyone present to turn off their mobile phones. As meeting papers are provided in digital format, tablets may be used by members during the meeting. We have received apologies from Alex Rowley.

This is the fourth day of stage 1 evidence on the Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill, and it is our final evidence session before we consider our report to Parliament on the bill in the new year. I welcome from the Scottish Government Kevin Stewart, Minister for Local Government, Housing and Planning; Amanda Callaghan, head of the tackling fuel poverty unit; and Allie Clarkson, statistician. I also welcome Jackie Baillie and Liam McArthur, who are in attendance for this item.

I invite the minister to make a short opening statement.

As you know, the Fuel Poverty (Target, Definition and Strategy) (Scotland) Bill has three key aims: to set a target that, by 2040, no more than 5 per cent of Scottish households are in fuel poverty; to create a new definition that better aligns fuel poverty with relative income poverty; and to produce a long-term fuel poverty strategy. Scotland is one of only a handful of European countries to define fuel poverty, let alone set a goal to eradicate it. Achieving the target will place Scotland among the very best countries in the world in terms of tackling fuel poverty. Ahead of questions, I will say a few words on each of the three aims.

There is no doubt in my mind that our target is challenging but achievable and, importantly, deliverable. Of the four key drivers of fuel poverty, two are outwith our direct control: fuel prices and income. Therefore, we are concentrating on the two drivers that we can change: poor energy efficiency and how energy is used in the home. We must bear in mind that most Scottish homes are owner occupied. Bringing such households out of fuel poverty will involve an unprecedented level of intervention in private homes that relies on technology being affordable and in line with low-carbon technologies.

Bringing forward the target date would risk a rise in fuel poverty, due to higher installation or operating costs for households. The 2040 target gives us time to bring the public with us, and it aligns with the energy efficient Scotland programme’s target of all fuel-poor households reaching a band B energy performance certificate by 2040, if that is technically feasible, cost effective and affordable.

We want Scotland to continue as a world leader in tackling fuel poverty, so it is important that we create jobs and opportunities for new workforce skill sets and that we allow local supply chains to evolve to deliver low-cost and low-carbon heating solutions in their local communities, to ensure that local economies feel the benefit.

I make it clear that I expect considerable progress to have been made in our fight against fuel poverty well ahead of the 2040 target date. Our draft fuel poverty strategy, which was published alongside the bill, contains important interim milestones. The first of those is that, by 2030, the overall fuel poverty rate will be less than 15 per cent. The second is that the median fuel poverty gap, based on 2015 prices before adding inflation, will be no more than £350. I intend to lodge amendments at stage 2 that will enshrine those two ambitious interim targets into legislation.

Let me turn to our definition. By bringing the definition of fuel poverty closer to the definition of relative income poverty, we aim to achieve a fairer Scotland. We are determined to put right the situation whereby, under the current definition, some households with low incomes do not qualify as fuel poor. I hope that the committee has had the chance to read the briefing that I sent in advance of today’s session, which highlights that 76,000 more income-poor households would be considered fuel poor than are considered fuel poor under the definition in 2016.

We intend to use the minimum income standard that was produced by the centre for research in social policy at Loughborough University. Our standard will be set at 90 per cent of that standard, after the costs for fuel, housing, council tax, water rates and childcare are deducted. We want the new definition of fuel poverty to work for everyone, no matter where they live in Scotland.

We have listened to calls for the measurement of fuel poverty to include an uplift in the minimum income standard for remote rural areas. In his oral evidence, Alasdair Calder of Argyll and Bute Council suggested an increase to the minimum income standard threshold to over 100 per cent in those areas. In advance of stage 2, I can confirm to the committee that I will look seriously at that suggestion and consider how such an uplift can be best achieved for remote rural areas.

Finally, on our draft strategy, we are determined to continue to work with partners and stakeholders across Scotland to ensure that the final strategy addresses all drivers of fuel poverty. I have had many discussions on the strategy and I know that people want a focus on delivery and to ensure that no one has to live in a cold, damp home.

I look forward to answering your questions.

Given that the Government failed to meet the 2016 target, would it be appropriate for penalties of any kind to be put in place to ensure that minimum interim and final targets are in place for the Government?

The huge rise in energy costs in the decade after the target was set in 2002 was a major factor in the inability to meet that target. In that scenario, in which fuel prices rose dramatically, that failure could not have been reasonably foreseen when the target was announced. It would have been unfair to have penalties in such a context. If fuel prices had risen in line with inflation at that point, under the current definition we would have seen fuel poverty figures of 8.5 per cent, rather than 24.9 per cent. If penalties for failure to meet the target had been in place, I do not believe that the 2016 target would have been met.

We do not know which Government will be in power in 2040 and I do not consider it to be appropriate to set out the consequences for a future Administration’s failure to meet the target in the bill. The consequences of not doing so are political and reputational. I hope that, through the five-yearly reporting that is set out in the bill, this Government and future Governments will be scrutinised by this committee and its successors, and by the Parliament as a whole, to see whether we are on track.

There has been a lot of talk about bringing forward the timing of the target date to 2030 or 2032—you mentioned that in your opening statement. Can you expand on why 2040 is the optimum timing?

The Scottish Government wants to set a target that is both realistic and achievable. We believe that setting a target of not more than 5 per cent of households being in fuel poverty by 2040 does that.

The 2040 target aligns with the energy performance certificate targets that are in “Energy Efficient Scotland: route map”, and it lends itself to the achievement of the interim target in the Climate Change (Emissions Reduction Targets) (Scotland) Bill that by 2040 Scotland’s net emissions must be at least 78 per cent lower than the baseline. If we bring the fuel poverty target forward to an earlier year, that would mean utilising technologies to reduce fuel poverty that rely on existing high-carbon heating fuels. In some cases, that might lead to households needing two interventions in order to meet climate change objectives as well as everything else.

Another key thing, which I touched on briefly in my opening remarks, is ensuring that the country gets the ultimate amount of benefit from the programme. I have previously spoken to some of the members here about various aspects of delivery, so I am sorry if I bore them by repeating myself. When I was first appointed to this role, it was suggested that I take away some of the HEEPS ABS—home energy efficiency programmes for Scotland area-based schemes—money that Orkney had received, because it had not been used. However, we could see that it had not been used because, initially, the pipeline of work was not there to get the skill set up and allow folk to get on with the job.

In setting this target, we can set in place a pipeline that allows companies to boost the skill sets that are required in various parts of Scotland, rural and urban. They can then benefit in terms of employability in delivering the schemes. I think that 2040 is realistic; it is ambitious, but we can do it. As I outlined in my opening remarks, I am willing to put interim targets into legislation to ensure that we continue to move forward.

Are you suggesting that, if the target was brought in earlier, larger companies rather than local workforces would benefit?

It is likely that larger companies that could tool up more quickly would benefit. Beyond that, we would miss opportunities to allow small and medium-sized enterprises to carry out the work. However, one of the key things is that, if we brought it forward, we might need two sets of interventions in folk’s houses. We might need an intervention using existing technology that we would have to get rid of and replace with more carbon-efficient technologies in the future. There is a logic to the target date. It is realistic, ambitious and deliverable.

My last question concerns the 5 per cent target. Why are you setting the target at 5 per cent rather than 0 per cent, which will potentially leave 140,000 households in fuel poverty by 2040?

The Government is committed to tackling fuel poverty wherever it exists in Scotland. We have a long-term ambition to eradicate it and we will keep working towards that. At the same time, it is important to recognise that some households will without doubt move in and out of fuel poverty. We can deal with aspects such as the energy efficiency programme and changing people’s behaviours, but we have no control over people’s incomes or fuel prices. There will always be a small number of people who move in and out of fuel poverty due to a change in their income or the cost of energy.

It is also important to note that the target is for no more than 5 per cent of households to be in fuel poverty by 2040. If we manage to get the level down to 5 per cent, we will not just say, “Job done” and stop trying; our ambition is to ensure that as many folk as possible are out of fuel poverty.

09:45  

I was heartened to hear you talk about raising the minimum income standard in rural and island communities to 100 or even 110 per cent.

The evidence that we have received suggests that what is important is not just the extent of the problem but clarity on how we define such communities and address the issue. For example, Kirkwall, Lerwick, Rothesay and Stornoway do not meet the current definition of “remote rural”, because their populations are more than 3,000. Fuel poverty is an issue for island communities, as I am sure you agree. Liam McArthur will go into detail, but I know that in Orkney 59 per cent of people are in fuel poverty, which is the highest level in Scotland. How can the definitions be amended to cover all people on Scotland’s islands? Can you hone the approach to remote rural areas on the mainland, too?

As I said, I intend to ask my officials to look closely at all aspects of this. You represent islands—Arran and the Cumbraes—so you know full well about island life. You are right: Orkney is classified as remote rural, but Kirkwall is currently classified as a remote town and not as remote rural. We will consider such situations and see what we can do.

We are all very aware of the Islands (Scotland) Act 2018, many parts of which have not yet come into force. I have said that we will carry out an islands impact assessment for all aspects of the bill before stage 3.

Thank you. That is what it says in the final sentence of the briefing that you supplied to the committee, which I have in front of me.

Last week, I asked local authority representatives how we will tackle fuel poverty across Scotland at local level. We have 32 local authorities with differing fuel poverty rates, which vary from 20 per cent to the 59 per cent in Orkney that I mentioned. In looking to reduce fuel poverty, the Government might look for early wins by addressing the low-hanging fruit rather than areas of deep-seated fuel poverty. One approach to that might be to give each local authority a target, rather than have just a national target. Is the Scottish Government considering such an approach, to ensure that all areas of Scotland address fuel poverty in a proportionate way?

Throughout stage 1, I have continued to have discussions with local authorities the length and breadth of the country and with the Convention of Scottish Local Authorities. That suggestion has not come on to the agenda, but I am willing to consider it in co-operation with local authorities.

Many local authorities have already grasped the low-hanging fruit, utilising the HEEPS ABS resources that were put in place. I recognise that, without a doubt, they need to look much more closely at how to deal with some of the more problematic areas. To their credit, many of them are already doing so; there are innovative schemes throughout the country.

We need to take into account the difficulties that exist in certain places. We as a Government have ensured that the allocation of resource reflects the needs of various places. For example, our island councils benefit from three times more spend per head of population on HEEPS ABS than those on the mainland, because we recognise the differences that exist in those communities.

Three or four weeks ago, I announced further flexibilities in delivery in island communities. We are looking at bringing new things into schemes, such as microgeneration, the removal of asbestos and the installation of oil tanks. We will continue to look at those flexibilities and I will consider having further discussions with local authorities about setting individual targets if that is deemed appropriate.

Will the targets address extreme fuel poverty, in which a household spends more than 20 per cent of its income on fuel? The annual Scottish house condition survey includes data on that, but it is not mentioned in the bill, the policy memorandum or the draft fuel poverty strategy. One would have thought that you would want to focus on people in extreme fuel poverty first.

In our draft strategy we proposed fuel poverty gap targets for 2030 and 2040, which consider the depth of fuel poverty. That, in effect, is a measurement of the size of the gap between the bill for the fuel that a household requires to stay warm and its spending 10 per cent of its income on fuel. The independent panel suggested such a measure in respect of the proposed new definition; it was suggested as a means by which the severity of fuel poverty can be better understood. The approach that we are proposing in all that we are doing is therefore in line with the panel’s view and is designed to tackle the situation of folks who are in extreme fuel poverty.

You can ask one last question, Mr Gibson.

Thank you, convener. I am grateful for your indulgence.

Energy UK, the trade association that represents energy suppliers, is concerned that

“the target’s ambitious focus on reducing fuel poverty outright will be a challenge … Some factors, such as the regulatory framework around energy prices for example, do not fall within Scotland’s devolved powers.”

Npower, which is one of the big six, said that it is concerned that the Scottish Government has overlooked some of the lessons that were learned from what it called the “poorly designed” 2002 to 2016 target. It says that

“targets can be stretching, but must be controllable”—

which alludes to the fact that fuel costs and incomes are largely outwith the control of the Scottish Government.

I think that our target is ambitious but deliverable. I wish that we had control over the other two levers: energy prices and income. That would make life much easier in terms of the formulation of the bill and its delivery.

We do not control those levers, but that is not to say that we are not making efforts to change some of the things that are going on out there. Colleagues and I have met the energy providers on a number of occasions to discuss the obligations that we feel they should have. For example, I have gone on record on a number of occasions saying that I find the use of prepayment meters in households that are the most fuel poor to be an awful situation. I wish that we had the ability to deal with that, but we do not have those powers—although that is not to say that we will not continue to argue with the energy providers about those issues.

On energy delivery, in 2019 the Scottish Government will consult on proposals for a public energy company for Scotland, which will have the twin objectives that were set out by the First Minister of addressing fuel poverty and supporting economic development. During the consultation, we will seek views on the outline business case that is currently being developed on the Government’s behalf. Although we do not have full control over this area, we will always try, where we can, to put other policies in place to deal with situations that are currently outwith this Parliament’s control.

You said that the Scottish Parliament has no control over people’s incomes. The definition of fuel poverty in the bill refers not to people’s gross incomes, but to their net incomes and their incomes after certain costs have been taken out. Would you agree that we have substantial control over people’s net incomes, on the basis that we control how much income tax and council tax they pay, that we control 15 per cent of the benefits system and that housing costs, rents and so on are all substantially under our control? Public sector workers form 20 per cent of the workforce and we control public sector pay. Therefore, in relation to assessing fuel poverty, the Parliament has a lot of control over people’s net incomes.

There are also a number of areas that we do not control. For example, we do not control the national minimum wage.

I will give an example of an area in which, if the Scottish Parliament had powers, we could make a difference. Universal credit is not controlled by the Parliament, and it has a huge impact. Due to the changes that have been brought in by the United Kingdom Government, there is very little the Scottish Parliament can do about that. Mr Wightman pointed out that we control some aspects of the social security system, but 85 per cent of the system remains under the control of the UK Government.

There are some things that we can do—at the moment, I have officials looking at housing costs and various other aspects of people’s lives and how they affect income—but large swathes of control still lie with the UK Government. Although we can tinker at the edges and sometimes do a little bit more than that, we have to take cognisance of the fact that control over a large number of areas still rests with the UK Government.

I do not want to get into a debate about how much control we have but, given that we control income tax, council tax, housing costs and all the rest of it, and given that the bill refers to a net figure, I think that we have more control than you are suggesting.

I will move on to the definition of fuel poverty in the bill. Most of the witnesses have described it—I think that we all recognise this—as a more complex definition than the current one. We have been out visiting local authorities in different parts of Scotland, looking at fuel poverty. In order to deliver the strategy and to implement measures that are designed to reduce fuel poverty, local authorities use proxies including council tax bands and take-up of benefits. Will those proxies have to change substantially as a result of the new definition, which is a more accurate, nuanced and targeted definition of fuel poverty, or are the proxies that are currently used in HEEPS area-based schemes still relevant?

10:00  

The new definition—much like the current one—is primarily a statistical tool for giving us a nationwide picture of fuel poverty. As Mr Wightman rightly points out, our fuel poverty schemes use various proxies including receipt of particular benefits. At present, we have no plans to change the use of proxies. However, we intend to review the proxies that are used for eligibility for our warmer homes Scotland scheme to see whether they could be more closely aligned with the proposed new definition.

We will continue to consider all of that. I am always keen to hear from local authorities about particular circumstances in their areas, where another proxy could be used. I have had discussions with members around this table about that.

Members will be aware that we are also considering a doorstep tool to deal with some of the issues. I know that some stakeholders look on that favourably, but others look on it not so favourably. We will continue to work with people in order to get that right.

You circulated a letter to the committee earlier this week and in annex B there is the example of Ann, who is a single parent with a six-year-old child at school. Under the current definition, she is not in fuel poverty, but your workings in annex B show that, under the proposed definition, she would be. Let us say that Ann lives in West Lothian. How does West Lothian Council find Ann, now that she is in fuel poverty?

I am trying to find Ann. Bear with me, convener.

I am unable to answer how West Lothian Council would find Ann, because I am unaware of the day-to-day workings of West Lothian Council in dealing with such things. However, in general terms, having made visits around the country in the course of discussions on the bill, I can tell you that it is fair to say that some councils would be more adept than others at finding Ann and dealing with her situation. We need to ensure that we have the ability everywhere to find the likes of Ann. In some places, Ann would be found easily. In some local authorities, there have been area-based schemes in which people have been spoken to and there are lots of Anns in a particular place. If Ann lived in an area where there is not so much poverty, it would be harder for the local authority to find her. We need to turn that around in co-operation with not only local authorities, but other partners, to ensure that we reach all those people.

Mr Gibson was right to point out that in some places we have already found all the low-hanging fruit and have helped folks—through area-based schemes in particular. We need to become a little more sophisticated in some areas; some local authorities are further advanced than others.

Do you agree that a new, more nuanced definition, which would include people like Ann, will be pointless for national statistical purposes unless we are able to locate the people who are in fuel poverty, so that we can take them out of it?

No, I do not agree with that, because that is only part of the picture. As I said, this is a national overview, but it also looks at proxy measures that are relevant to local authorities.

One of the most interesting things about the meetings that I have had over the piece is that we ended up talking about the bill for a very short time—local authorities and other stakeholders are far more interested in how we get better at targeting the folk who are in most need.

We have seen great work going on across the country, including schemes such as HEEPS ABS and through Warmworks Scotland, but we now need to up the level and reach the folk who fall into fuel poverty and who have not yet been covered by the schemes that we have in place. Local authorities, as delivery partners, are best placed to do that; they will put the proxies in place. I know that many local authorities are looking in depth at all this, and we will continue to encourage that.

I will jump back to Mr Gibson’s line of questioning. The evidence from the latest house condition survey is that the fuel poverty gap between rural and urban Scotland has widened in a very short time—in the past two years, in fact. I want to be clear about what you are committing to. The minimum income standard was mentioned. You know that we have heard evidence on and calls for a Scotland-specific or rural-specific minimum income standard. Are you committing to introducing either of those at stage 2?

I think that, in his evidence, Professor Hirsch said that a Scotland-wide minimum income standard would not be much different from the UK minimum income standard. I have committed to examining further the issue of remote rural areas, which will take into account what Mr Gibson said about the difference between remote rural and remote towns, because that is an important distinction to make, and to considering the minimum income standard threshold in those areas.

I will ask my officials to examine that issue in depth—I am more than happy to share information with the committee—and then we will decide what is required to move forward on that front.

Could that be in the form of an amendment to the bill?

I think that, first of all, we have to find out exactly what difference having that standard would make. Would it make any difference? Obviously, if it was thought that it would make a difference, the likelihood is that there would be amendments lodged recognising that those differences exist. I reiterate that there is a difference between the remote rural aspect and the Scotland aspect. From what I have read of Professor Hirsch’s evidence, there would be little difference between the UK MIS and a Scottish MIS.

You are absolutely right.

One key driver of fuel poverty is energy efficiency, which we can do something about in Scotland. That could be through retrofitting existing houses or by building new houses to the highest possible standard. As far as I know, the highest possible standard is passive housing, where you require very little heating indeed. In fact, it can eliminate fuel poverty. Do you have any plans to introduce passive housing as the standard for new housing? What plans do you have to ensure the highest possible standard of retrofitting?

As the committee will be well aware, the Government has opened up a discussion on housing beyond 2021. My colleagues and I have been asking people to act as ambassadors to get as many others as possible involved in that discussion and then respond to the consultation. Many things on the agenda have already been brought up by stakeholders, including consideration of standards. That is the place where we should have the discussion about how we make progress on affordable housing programmes and the delivery of social housing. The new social housing developments such as I visit regularly are all built to a very high standard.

Beyond that, when it comes to such issues, we also have to consider the owner-occupied sector. I have previously said to the committee that I will continue to examine building standards across the board. I had hoped that we would be much further advanced in the work on reviewing building standards but, unfortunately, as the committee well knows, a huge amount of effort on the part of my building standards officials has gone into dealing with the aftermath of the Grenfell tragedy, to ensure that our building standards regulations are absolutely spot on as regards safety. I will not say that we are coming to the end of that work, because we are not, but there is less going on there now, with the independent panels having reported, and we will move on with legislation and other aspects, so there is some free space to consider building standards as a whole. The committee can be assured that I will look to review what is required for all housing types—not just in the affordable and social sector—as we move forward.

As you know, committee members recently visited Stornoway. We heard some evidence, which was probably anecdotal, about work that was being carried out on houses not being up to scratch and about there being a lack of monitoring. In other words, the Government—whether it is the Scottish or the UK Government does not really matter—is paying for work to be done on housing, but nobody is following up and checking it. There are cowboys out there who are doing substandard work at public expense. Do you have any plans to sort that out?

On Mr Simpson’s comment about there being no difference between the UK Government and Scottish Government schemes, I say that there is a great difference. Quite a lot of complaints cross my desk about some of the work that has gone on, but a huge amount of those are about UK Government schemes. For example, if we look at the Warmworks Scotland scheme, we can see that the standard of work is high, that customer satisfaction rates are also high and that, where there are difficulties—I am not saying that it is perfect—they are dealt with quickly and efficiently. I wish that the situation were the same with the UK Government schemes.

10:15  

It is interesting that Mr Simpson has raised the point about checks being made, because during the course of visits across the country in the summer, some local authorities suggested to me that some of the people who had those HEEPS area-based schemes delivered to them felt that there was too much checking.

We have to strike a balance. We are getting it right with the schemes that we are delivering; I am not convinced by the UK Government-backed schemes, where there have been people—Mr Simpson describes them as “cowboys”, but I would not use that term—who have not been up to the job and who have left people in very difficult situations.

We have constantly been on to the UK Government to try to resolve these situations. Some steps have been taken at various points. However, a large number of people in Scotland have houses that have been, in some cases, severely damaged by the bad fitting of unsuitable energy efficiency measures.

If anyone, at any point, has anything to tell me about the Scottish schemes, including if they are not working, I will act appropriately and speedily to resolve those situations.

You are right—the evidence that we heard was really about the UK schemes, but the work is going on in Scotland. If it is not done properly—if it is a botched job—people can still be left with cold homes even though we have spent taxpayers’ money to get those jobs done.

The committee has to produce a report and I certainly would not be averse to highlighting that as an issue, whichever Government is involved—in this case, it is the UK Government. If you could provide us with some evidence, that would be very useful.

I am quite happy to do so and if the committee, in its report, wants to highlight to the UK Government that it needs to do much better in delivering the schemes that it is responsible for, I would be very happy. If the committee wants to go further and tell the UK Government that it should resolve the difficulties for householders in the east end of Glasgow, in Rutherglen and in many other parts of Scotland, I would welcome that too.

My colleagues and I have communicated with the UK Government about the matter on numerous occasions to try to get it to get its finger out and resolve the problems for folks who, in some cases, cannot sell their homes because they do not have the appropriate building warrants. That is absolutely unacceptable, so I would welcome any help that the committee could give in that regard.

In terms of some of the UK schemes, home energy Scotland won the best customer focus award at the best business awards this year, which is a huge achievement. Its customer service satisfaction rate is 97.7 per cent. I handed out certificates to some employees earlier this year who had achieved 100 per cent customer satisfaction levels, which is quite incredible.

I am being corrected by my officials, because I said “UK schemes” and I should have said “Scottish schemes”—home energy Scotland is a Scottish scheme. Warmworks Scotland won the Government Opportunities best service award for medium and large organisations. In Scotland, we have award-winning schemes, whereas some of the UK schemes, in my book, would not even get the wooden spoon.

Thank you very much for that advert for the Scottish schemes. Will you send us that information, which would be really useful?

I am more than happy to share that kind of information with the committee.

I want to ask about the consultation requirements as set out in the bill and how they compare with the previous consultation. Were any lessons learned from the previous consultation?

I cannot really talk about the consultation requirements for the previous bill, because that was well before my time.

I am one of those folk who believes that, as well as having the formal consultations, we should get out and about and find out exactly what is happening on the ground. We will continue to liaise with stakeholders who live or have lived in fuel poverty in order to develop not just the strategy but delivery. To get the strategy absolutely right, and for us to be able to direct support appropriately, we must take cognisance of those folks who are most in need, which we will continue to do.

Yesterday, I met a group of tenants from the Wheatley Group housing associations’ welfare reform and social security panel to hear first hand where they think difficulties remain and what they think we should do to move forward. A large part of yesterday’s conversation was on capping the prices that are charged by energy companies, the way that energy companies treat people at certain points, and incomes and benefits—universal credit, in particular. I will continue to listen to folk such as those whom I met yesterday. I am grateful for having spoken to them. You can be assured that we will continue to do that.

We touched on the draft fuel poverty strategy. It would be interesting to get your comments on the criticism of the strategy that the Government has received. It has been said that the strategy lacks detail on specific policies and programmes and focuses too much on energy efficiency. Further, stakeholders have said that they want the opportunity to suggest changes to the strategy. What is your view on that?

There is obviously an emphasis on energy efficiency in the draft fuel poverty strategy, as that is one of the drivers of fuel poverty that we control. However, it provides detail on all four drivers and the support that is available to those who are in need. That includes our national fuel poverty programme, which is the award-winning warmer homes Scotland programme, and the Scottish Government-funded energy Scotland scheme—also award winning—which provides free and impartial energy advice to callers on a freephone hotline. In addition, HES is the only referral route for households experiencing fuel poverty to our national energy efficiency schemes.

It should be noted that, as Alexander Stewart rightly pointed out, what we have is a draft strategy. Our stakeholders at national and local levels have a critical role to play in helping us to develop the final fuel poverty strategy—there is nothing better than a critical friend. This is not all done and dusted. Folk can continue to have their say, and we will listen to them and develop the fuel poverty strategy accordingly.

You have said that it is still a draft strategy, and that there are still options and room for improvement across the piece. That will give local authorities the chance to continue to engage. As we have heard, some authorities seem to be much more attuned because of the level of fuel poverty in their area. Given that there is not the same expertise across local authorities, how will you ensure that all councils get the same opportunity to suggest improvements?

We need to highlight best practice in order to help others. I give the example of what we have done recently to tackle homelessness. As Alexander Stewart is well aware, many local authorities have visited Perth and Kinross Council to look at its rapid rehousing plan, in order to help them as they formulate their rapid rehousing plans. We need to look at the best of the best, and to point local authorities in the direction of the current exemplars.

We need to highlight to people schemes that local authorities have undertaken that might be a little bit different. For example, one of the beneficial schemes from Aberdeen City Council dealt with Victorian tenements. Lessons could be learned from that scheme and exported to other local authorities that have similar housing types. Aside from local authorities, there are third sector organisations that are doing extremely well and pinpointing folk who are in most need. We should take the best of the best and export it.

From my discussions with COSLA, I know that it is happy to help us in that regard. Like us, it wants to get the strategy absolutely right. We need to celebrate the good work that is going on, use the exemplars and spread the message of what can be done.

On reporting provisions, you will have noted from the evidence that the committee has received that there are different views about the frequency of such a reporting requirement. Although the bill provides for a five-year period, others have suggested that that would be too infrequent. Could you share your views on that issue, given the evidence that the committee has received?

I have talked about the alignment with other aspects of policy, including the Climate Change (Emissions Reduction Targets) (Scotland) Bill, the bill about district heating regimes and other issues that Paul Wheelhouse will introduce at a later point and the energy efficient Scotland programme. We have proposed a five-year reporting cycle in order to align with the development of the reporting for the energy efficient Scotland programme. The report every five years will be a stocktake of progress over the past five years, and it will look forward to the next five years.

In addition, we will continue to publish the Scottish house condition survey, which includes the fuel poverty annual statistics, and our annual programme delivery reports. Therefore, there will still be the annual report in the Scottish house condition survey and the report every five years.

Those who advocated more frequent reporting—perhaps every two or three years—felt that it would be beneficial and would enable us to take stock of where we are on the journey to the targets that have been set out. Has the minister weighed the benefits of more frequent reporting against any particular challenges he might anticipate in setting a more frequent reporting requirement?

10:30  

There is a logic to aligning the reporting with the energy efficient Scotland reporting. However, if others have said that it should follow a different timescale, I am more than willing to consider that—I am pragmatic. I want to be logical in what we do, which is why we suggested the five-year cycle to align with the energy efficient Scotland work.

It is always important to avoid duplication and unnecessary bureaucracy. We also want to avoid creating a situation in which the burden of reporting becomes greater than the burden of delivering the service—in this case, delivering energy efficiency measures in folk’s homes. I will consider that proposal, but I emphasise that there is a logic to what we have proposed.

I am pleased that the minister will consider that proposal. The minister will be aware that Citizens Advice Scotland, among other organisations, has suggested that the substance of the reporting should cover the four drivers of fuel poverty. As has been discussed in every evidence session, including this morning, two of those four drivers are not within the direct control of the Scottish Government as the powers currently stand. Notwithstanding that fact, would the minister support the CAS recommendation that the four drivers be included in the substantive reporting?

I absolutely support CAS’s suggestion on that point. Although we do not control two of the drivers, it is imperative that we report on all four of them. That is what CAS has suggested, and people out there would expect us to cover all aspects of fuel poverty, whether or not the Parliament has control of them.

That is an interesting response. Finally on this suite of issues, there had been a suggestion that the bill include provision for an independent oversight body. What does the minister think about the efficacy of that suggestion?

I believe that the current provisions are robust enough, and I will expect the committee and the Parliament to act as the scrutineers of all of them. We have just talked about reporting periods and, as I said, I am quite pragmatic and am happy to consider those. However, as I said, I do not want duplication or unnecessary additional bureaucracy. The Local Government and Communities Committee has been quite good at carrying out scrutiny over the piece. The scrutiny of the outcomes should be carried out by the committee and the Parliament.

Okay. Thank you, minister.

This is a slightly different area of questioning that relates to the Delegated Powers and Law Reform Committee’s report. I am sorry minister, but it gets a bit technical here. The committee’s report highlighted one of the powers in the bill that would allow the Scottish Government to change the definition of the minimum income standard and to appoint

“another person as the Scottish Government may from time to time determine”

—in other words, someone other than Loughborough University or the Joseph Rowntree Foundation. The committee suggested that that person should be independent of the Scottish Government. What is your take on that, minister?

I came prepared for some DPLRC questions, as they always come up. I think that you are talking about concerns about the number and scope of powers to alter the definition of fuel poverty—

That is my next question. You are too well prepared.

I am too well prepared; I thank these folks here—my officials—for that. You are asking about the power in section 2(6)(e)(ii)—see how well prepared I am, Mr Simpson—to use another person to determine the MIS.

As my officials explained to the DPLRC, the intention is that ministers would use that administrative power if they had to react quickly to designate someone other than the academic institution and charitable body that are referred to in section 2(6)(e)(i)—that is, Loughborough University and the Joseph Rowntree Foundation. The power would be used only if those bodies stopped determining the minimum income standard, changed their names or ceased to exist in their current forms.

The difficulty is that, as far as we are aware, Loughborough University is the only body that produces the UK MIS. Having said that, I will have the Scottish Government’s legal team look into the DPLRC’s concerns in more detail. As you know, Loughborough University and the Joseph Rowntree Foundation are the biz when it comes to MIS. [Laughter.]

Oh dear. Was that pre-prepared?

It really was not. I am ashamed of myself now.

This reminds me of the conference session that we were talking about before the meeting opened. I think that Graham Simpson has another question to ask.

I do, and I will ask it with some trepidation.

It is the question that I tried to answer first.

There are some wide powers in the bill, one of which is the power to alter the definition of “fuel poverty”. A Government—I am not talking about the current Government—could alter the definition to take people out of fuel poverty. A cynical Government could do that, and the DPLRC was concerned about that. Will you respond to that concern?

I will. In both cases, the regulations would be subject to the affirmative parliamentary procedure. Moreover, under section 11, ministers would be required to consult

“such persons as they consider appropriate”,

who would have to include

“individuals who are living, or have lived, in fuel poverty.”

Thus, regulations that would alter the definition of fuel poverty in the bill would come under a high degree of scrutiny.

I welcome the DPLRC’s questions, because I think that such a level of scrutiny is required. I hope that my response gives you the comfort that you are looking for.

Thank you. I appreciate your not throwing in another joke there.

That appreciation is unanimous.

I thank Liam McArthur and Jackie Baillie for their patience in sitting through the meeting. Do you have questions for the minister?

Yes please, convener. It is panto season, given the minister’s jokes.

I declare an interest as the honorary vice-president of Energy Action Scotland and refer members to my entry in the register of members’ interests.

I will stick with definitions for a moment, minister, because I am interested in understanding the thinking behind some of the changes that you have made.

People tell me that pensioners and people living in rural areas suffer most from fuel poverty. I am sure that Liam McArthur will explore one aspect of that. For pensioners, you have moved the definition from age 60, where it currently is, to 75. I am sure you accept that many people in Scotland do not reach the age of 75 but live in acute fuel poverty. Why have you removed them from the definition?

Many people suffer from fuel poverty, and Ms Baillie has highlighted those who live in remote rural areas and older folk. However, in recent reports—including one from Citizens Advice Scotland, if I remember rightly—we have seen that many younger people are now caught in the fuel poverty trap. We have to take cognisance of all parts of society, all demographics and folks who live in urban and rural areas; it is not about just one group of people.

On the situation for older folk, the households that are eligible for enhanced heating will be defined in regulations, and we have said that we will consult on that issue. Many more older people are now living healthy, active and independent lives well into their retirement, and the independent panel that reviewed the definition of fuel poverty recommended that, if an age threshold were to be used to identify one category of households that would be eligible for an enhanced heating regime, it should be in the region of 75 to 80.

In the draft strategy, we propose to adopt the lowest age suggested by the panel, so that a household that has

“at least one member ... aged 75 or over”

would be covered by the enhanced heating regime. However, the strategy does not suggest that being over 75 is the only criterion. It also states that the regime

“is likely to cover those households where: ... at least one member has self-reported as having a physical or mental health condition or illness lasting or expected to last 12 months or more”.

I am sorry that I caused a scramble among your civil servants, who were looking for sticky notes to hand to you.

They want to make sure that I get it absolutely right.

Indeed, but it is very simple. You will acknowledge that, in some parts of Scotland, people do not reach the age of 75 and that, by making that change to the definition, you will cause a 3 per cent drop in who is covered. A substantial number of people will no longer be included. Will you review that? It is not about competing interests; it is about making sure that we catch everybody who is in fuel poverty. For younger people, the definition starts at age five and over. However, surely, the age at which a child is potentially most vulnerable is between 0 and five. Again, will you review that threshold to make sure that the definition is all encompassing?

As I said, we will consult on those issues, and I am sure that folk will put forward their views at that time. When we prepared those aspects of the bill, we looked carefully at what the independent panel had suggested.

I have a final small question that relates to finance, which is, of course, important for the bill. There have been some accusations that this is a bit like business as usual. Back in 2006, Energy Action Scotland said that the Government needed £200 million a year if it was to hit its target. You have just over £100 million in the budget now, £30 million of which is in financial transactions, so it is repayable. Is that enough? Have you done modelling for your target of 2040—which may or may not be the one that we end up with—to see whether that amount is sufficient to deliver on your vision?

10:45  

I might write to the committee in more depth about the modelling that has been done, rather than have Ms Clarkson go through all the work that she and her colleagues have done. As the committee is well aware, the Government committed to £0.5 billion of funding in the years during the run-up to 2021, and we will honour that commitment. As Ms Baillie and committee members know, Mr Mackay is willing to have budget discussions with every party. However, as he has clearly stated, if more spend in one area is suggested, there will have to be identification of where that money will come from.

You can be assured that I do everything possible to make sure that we get the best value for our current spend and that we have the most interventions that we can have in people’s homes to get them out of fuel poverty. We will send the committee the modelling stuff, and I am sure that Mr Mackay will be open to discussions with colleagues in the run-up to the budget, if that is what they want.

I am not sure how much more progress we will make, because you have already stated that you are prepared to keep under review any issues around definitions. Particular concerns are being raised about the failure to include in the bill a remote rural MIS. Given that context, I will try to reinforce the argument about the MIS, which is a recommendation from the rural fuel poverty task force and the independent expert panel, whose view is shared by every organisation across the Highlands and Islands that has any involvement in seeking to address fuel poverty in that region, as well as by similar bodies in other parts of rural Scotland.

From what I have heard and read in the evidence that the committee has received, it is the overwhelming view of the witnesses who have given evidence that the bill needs to include a remote rural MIS. The concerns that you raised previously, minister, about the potential increases in cost and delay that would result from the inclusion of a remote rural MIS have been laid to rest by that evidence. On top of that, the concern that you have raised today about the potential exclusion of places such as Kirkwall, Stornoway and Lerwick has been addressed by Professor Hirsch, who told the committee that there is no reason why the bill should not include category 4 remote rural towns as well as category 6 remote rural settlements. His view is that the difference between disposable income in category 4 areas and disposable income in the rural communities surrounding those towns is marginal.

We are building up a picture that, in order to achieve its objectives and to ensure that it does not artificially affect levels of fuel poverty in rural and island areas, the bill must include a remote rural MIS. I do not expect you to accede to that argument just now. However, with all due respect, I ask you to reconsider your position on that issue ahead of stage 2 and, ideally, to lodge an amendment on it at stage 2.

Convener, as Mr McArthur knows very well, I have had discussions with a huge number of folk about a lot of issues that affect remote rural and island communities. Indeed, I have seen Mr McArthur himself on a number of occasions. My door is always open. We took a view at the beginning that it would be too costly to develop a regional MIS and that it would take several years to do so. Frankly, like many others, I would rather spend money on interventions where that is at all possible.

Minister, that argument was put directly to the first panel that came before the committee and they refuted it. The cost would be marginal and the Government has already committed to changing its own definition, which will incur a cost.

As I said in my opening remarks, the Argyll and Bute option deals with some of our cost concerns and also looks at other aspects. We will look at the proposal, and I will be more than willing to continue to talk to members about all issues that arise during the scrutiny of the bill. Mr McArthur knows that my door is open. We will do the work and will come back and let the committee know its outcome.

I welcome the islands impact assessment that you have committed to carrying out, but it will need to be as detailed as possible. It cannot be a desk-based exercise but will need to engage local authorities, housing associations and a range of stakeholders who have offered their views on the issue.

As I said, that part of the Islands (Scotland) Act 2018 is not yet commenced, but, in the spirit of all of this, we agreed that we would undertake an islands impact assessment. Mr McArthur knows that I listen to the folk of Orkney, Shetland, the Western Isles and the other islands, including Arran and the Cumbraes—Mr Gibson would not have forgiven me if I had not mentioned them—in all that I do. We will ensure that the assessment is the right one.

I thank everybody for their attendance today. I suspend the meeting briefly to allow our witnesses to change over for the next agenda item.

10:51 Meeting suspended.  

11:00 On resuming—