“Improving energy efficiency: a follow-up report”
I ask the Auditor General for Scotland to brief the committee on the section 23 report.
Good morning, convener. Barbara Hurst will introduce the report.
This follow-up report was published in early December. Members may recall that the committee considered the original report on “Improving energy efficiency” in December 2008. At that meeting we made a commitment to follow up that work. This report re-evaluates the performance of councils, national health service boards and central Government bodies in reducing their energy use.
Thank you. I want to clarify something in your comments in relation to buildings and energy performance certificate ratings. You said that the rating was based on the fabric of the building rather than the amount of energy that was used. Would it not be absurd if a building had a high rating because it had a good fabric but used two to three times as much energy as comparable buildings? Surely the key criterion should be the amount of energy that is used.
That is an interesting point. I will ask Mark Roberts to elaborate on it, because we had significant discussions about it in drafting the report.
As you say, convener, the Scottish energy performance certificate system requires only the performance of the fabric of the building to be rated, without any indication of its energy use being taken into account. That contrasts with the situation in England and Wales, where they have display energy certificates that take account of the energy used in the buildings.
Who decided that in Scotland we would take the approach that we do, rather than the approach that is taken in England and Wales?
The legislation originated from Europe, but the Scottish Government decided how it was to be transposed.
Forgive me—I feel as though as I am missing something here. It seems to be a no-brainer that we should be looking at the amount of energy that is consumed. You are saying that to do that would require a change in regulations.
That is right. The European Union is considering changes to the overarching legislation at present, and I understand that the Scottish Government will consult on potential changes in the course of 2011.
It seems farcical, but never mind.
I will follow up on that point, because it is interesting. The issues are familiar to me because, when we moved house this time last year, we had to get a certificate for our house and, because it was a stone-built Victorian house, no matter how much money we spent insulating it or putting in expensive new windows, it made very little difference to the energy rating and it still came out poorly.
On the basis of the certificate, we cannot tell how efficiently a building is being used. Clearly, public bodies have other ways of looking at the energy performance of their buildings, such as meter readings and monitoring systems, but the certificates do not give that information.
As part of the study, did you look at that other information as to how buildings are used?
We collated information on energy use across the 96 public bodies and councils that we covered in the three years to 2008-09. As the study was a follow-up one, we did not get into any more detail than the aggregate figures for individual public bodies and councils.
So you did not look at individual buildings. I am asking because I know that George Foulkes, who is not here, takes a keen interest in the energy efficiency of the Scottish Parliament building. However, you did not consider how energy efficient this building is, other than considering what is in the energy performance certificate.
We have data—the Scottish Parliament publishes an environmental report each year on its performance—but we did not look at individual buildings.
I want to follow up on the same point. Like my colleagues, I was a bit surprised to see what the EPC rating actually means. There is more than just the level of energy use—there has to be some kind of efficiency factor. If a building is using energy, it is not necessarily being used efficiently. For example, in the school estate, there are old boiler systems heating up rooms that no one is ever in and lights are on in rooms that no one is ever in. So the level of energy use is not necessarily a reflection of the efficiency of that use. Is there any movement towards trying to gauge that?
In the context of energy performance certificates, I am not sure that there is. However, councils, health boards and central Government bodies are trying significantly to improve their understanding of their energy costs and how well they use energy. A lot of the progress that we have seen since we last reported on the issue is indicative of that. However, in terms of the certificates, the answer is no.
Exhibit 2 shows that the amount of energy that is used was pretty much static in the period that you monitored, but that does not tell us whether that energy was required in a number of areas, particularly in the public sector, where there are some older buildings that we are all familiar with. At some stage, we need to look more closely at how energy is used. We have more efficient systems, such as those with sensors that mean that lights are automatically switched off if there is no movement in a room—that would never apply in here, of course. In some of the older school estate, a lot of energy is wasted. It would be to everyone’s advantage if some effort could be channelled towards that.
My question is for Mark Roberts. He mentioned that the energy performance certification comes from EU legislation. What is that particular legislation and when was it brought into being?
It was introduced in 2002. It is the directive on the energy performance of buildings, which is directive 2002/91/EC.
When was it transposed by the Scottish Government?
In 2008.
You say that the EU is reconsidering the measure. Do you know where that reconsideration process is at present?
I think that it is in the latter stages. My understanding is that there will be a consultation on how that would be transposed later in 2011, but I can confirm that and get back to the committee if that would be helpful.
Turning to the CRC energy efficiency scheme, I might not have picked up Barbara Hurst correctly, so she should correct me if I am wrong, but I think that she said that it used to be the case that moneys that were raised by allowances were recycled into the scheme and went back to the participants, but that that is no longer the case and they now go to Her Majesty’s Treasury. What is the reason for the change?
You would have to ask the UK Government about that. When it was first conceived, it was very much a carrot-and-stick approach with a big financial incentive for bodies to reduce their energy use. That would be less so now because some of that money would go back into the UK Treasury, although there would still be an incentive for a body to reduce its energy use.
I hear Murdo Fraser saying, “Now it’s just the stick.” I do not know whether there are any carrots going around, convener. Perhaps we should look into that.
On the issue of EU legislation, do we know why the Government decided not to adopt a similar approach to that which was adopted in England and Wales?
That question might be better answered by the Scottish Government.
It seems ridiculous that we are not looking at energy use. We can follow that up.
I want to look at energy use. Paragraph 12, on page 7 of the report, states:
The simple answer is that they are the largest ones in terms of the number of buildings and premises that they need. The highest energy user was NHS Greater Glasgow and Clyde. The second-highest energy user was Scottish Water, which has a large energy demand because of the water and waste treatment work that it carries out. Glasgow City Council, Fife Council, City of Edinburgh Council and South Lanarkshire Council are all large councils with a large number of premises. The NHS bodies were NHS Greater Glasgow and Clyde, NHS Lothian and NHS Tayside, which are the three largest. So, the answer to your question is mainly that it is a matter of size and the number of facilities. The specific requirements of Scottish Water make it a high energy user.
Obviously, there will be some correlation between size and energy usage, but are you finding any pattern other than that?
No.
Okay. That is good to know.
I accept what you say about the larger bodies having more facilities and, therefore, a higher energy demand. However, Aberdeen City Council accounted for 3 per cent of the energy usage. I do not know what the population of Aberdeen City Council area is, relative to the population of the City of Edinburgh Council area, which accounted for 4 per cent. Is there any reason why Aberdeen City Council is up there?
The level of detail in the data that we gathered was comparatively coarse, as it was the basis of a follow-up report.
The issue of energy efficiency has gained greater prominence in recent years. As the years have passed—even within this session of Parliament—it has been increasingly talked about. You note that from 2004-05 to 2006-07, energy usage was declining but that from 2006-07 to 2008-09 it stayed pretty much the same. Is there any reason why it stayed the same? The question that I am driving at is: given all the talk about the importance of energy efficiency in the Parliament, in councils and in public and private bodies, why has that not translated into lower energy use?
A number of pressures on public bodies are causing continual increases in demand. When we spoke to energy managers, they talked about the pressures of new technology, with greater demand for electricity, expansions in the scale of the estate and longer working hours. Buildings were open for longer than a standard 8.30 to 5.30 day, which was having an effect. Despite the progress that has been made in reducing energy use, it may be being offset by increased demand, which makes the overall task even harder.
I note what you say, but my experience before entering Parliament is that all the reasons that you gave, such as longer working hours, existed in the period 2004-05 to 2006-07. You noted that 70 per cent of large public buildings are rated in the poorest three levels. Do we have a comparison from before 2006-07? Is the trend improving?
Energy performance certificates only came into force in January 2009. As the certificate is one of the significant changes that has arisen since we last reported, we wanted to ask bodies about the state of their estate, as defined by their energy performance certificate. We cannot make a comparison.
As we have already noted, they are perhaps not fit for purpose in that way.
The interesting thing about the energy performance certificates, even with the caveats that the committee has raised, is that it is not just the older buildings that are sitting in the lower categories. We were keen to ensure that there was a recommendation on building energy efficiency into new-build properties because we were quite surprised at the ratings for some of the newer public sector buildings.
Can you give us an example?
Yes. We thought that more attention would be paid to sustainability. It may be unfair to pick out examples, but they are quite interesting. The City of Edinburgh headquarters at Waverley Court, which is a relatively new building, has a C rating; Victoria Quay has a D rating; and Edinburgh royal infirmary has an E rating. Those are not old buildings. Although you would expect that to be the picture with our fantastic Victorian municipal buildings, they are not the only ones involved.
You have covered many of the points in your responses. There are two big difficulties here. One is that the incentive that was there before is no longer there because of the spending review. That is a genuinely retrograde step, and the committee should explore it with the UK Government. The second issue that we have identified is that of the assessment of buildings and their energy use. We should explore that with both Governments.
That issue was raised by energy managers when we spoke to them. Every individual contract for a hospital or school is different. Trying to determine who ultimately had responsibility for buying allowances under the CRC scheme came down to debates and arguments about who was responsible for paying the bill, which varied according to the contract. In some cases it was the council or the health board; in other cases it was the contractor.
I do not think that there was ever a golden age. I have taught in older secondary schools in which you could feel the chill in the air for the whole day—in fact, you got warmer when you stepped outside some of the classrooms. That is not always the case with PPP, but there have been some difficulties around specifications—a number of us have had concerns raised with us about the conditions inside the schools because of overheating. How do we sort that out? One of the key criteria for PPP was meant to be the ability to set specifications. That might have happened in some contracts that were signed, perhaps not in the early stages but certainly in the later stages. The Scottish Government has now adapted a PPP model for future procurement, so it will set specifications. How do we get to the level at which the public sector, the private sector or a hybrid model takes responsibility? Perhaps you are not the right people to answer that, but it would be helpful if you could speculate a wee bit, because that could help us a bit more.
I am always willing to speculate, provided that we understand—
Leave the facts to the others, Robert, and you can speculate.
Absolutely. You have got it in one, Mr McAveety.
I want to ask about the national contracts for procuring energy, which are referred to in paragraphs 16 and 17 on page 8 of the follow-up report, and how their costs work out. I notice a reference at the start of paragraph 17 to the fact that
I am afraid that I do not immediately know the answer to that—I will get back to you about it in writing, if that is all right.
Thank you.
Again, I suspect that it is a question that the Scottish Government could answer more effectively than we could.
I wish to ask something on the record that I have mentioned elsewhere, regarding renewable energy and wind power in particular. Wind power has been underpinned by significant public investment, and is highly controversial. Following up Murdo Fraser’s point, I note that there have been critical periods during this very severe winter when the wind turbines have not been generating the energy that has been required, which has meant that we have had to rely on alternatives. Has there been any audit of the value of the investment that has been put in? Has there been any audit of whether the money has been used efficiently, whether we are getting the anticipated return from the investment and whether continued investment at the same level will be sensible in the future?
Is Mark Roberts aware of the Government undertaking any work in that area?
No, not in terms of audit work. That is not something that Audit Scotland has looked into.
The question is clearly important, and we should reflect on it when we are thinking about future work programmes. This is perhaps the sort of area where a conversation with the National Audit Office might be useful.
Yes. We are refreshing our programme, so we will put that into the mix.
That would be helpful. It would also be worth our inquiring of the Government what work it is doing to justify the levels of expenditure that are being allocated. There is a huge commitment in this area. If it can be justified, we should support it, but we need to work on the basis of knowledge and facts.
On the costs of energy, exhibit 2 on page 7 of the follow-up report seems to show that, between 2007-08 and 2008-09, although the energy use of “Central Government”, which I presume refers to the Scottish Government, has remained fairly constant—it has gone up slightly—it managed a 10 per cent reduction in cost, even against the backdrop of increasing costs to both the NHS and local authorities. At first, I thought that that was perhaps due to the role of procurement Scotland, but I note that the figures predate that development. How did the Government manage to achieve a 10 per cent reduction in cost?
“Central Government” refers to both the Scottish Government and bodies such as executive agencies and non-departmental public bodies—it is broader than just the Scottish Government itself. The Scottish Government publishes an annual environmental report on the core Scottish Government, which did not show a marked decrease in energy consumption up to 2008-09. Energy consumption must have been reduced across the broader spread of NDPBs and executive agencies.
But that is not reflected in the report. Consumption actually goes up slightly, yet the costs came down between 2007-08 and 2008-09.
Potentially, there are factors concerning the contracts that were negotiated by individual bodies before the procurement Scotland national contract came into play.
So it could be as simple as that: the Government could just have got a better deal—perhaps using uSwitch.com or something. [Laughter.]
When did the procurement Scotland initiative kick in?
In autumn 2009.
It is too early for that be reflected in the figures to which Jamie Hepburn referred.
Yes.
In the case of councils, it seems as if a decrease in energy use has resulted in a significant increase in cost. I accept that there could be general market increases. There is a similar situation for the NHS. For what you describe as “Central Government”, however, the opposite is the case. It is worth asking why there was relative inefficiency in those two areas.
There are some strong, positive messages in the follow-up report. In my view, paragraph 20, which is the last paragraph of part 1, is encouraging. It says:
Presumably it is the Government, if anybody.
Who does it?
We do not know, to be honest. We do not know whether such information is collated anywhere.
It is worth flagging up, I think.
I draw this agenda item to a close, and I thank the witnesses very much for their contribution.
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Section 22 Report