Chamber and committees

Again, those are important issues. I mentioned earlier that almost two thirds of social housing in Scotland is in EPC band C or better, but we appreciate the scale of the task ahead. That is why the social housing net zero consultation proposed the prohibition of polluting systems by 2045.

I understand that social landlords have made representations and I am aware of the cost burden. The Scottish Government is committed to delivering vital support through the social housing net zero heat fund and we have been using that fund for some time to support social landlords to retrofit houses.

The budget proposals offer £300 million in funding for the heat in buildings programme more generally across sectors.

I do not have detailed knowledge of that area of housing policy, but I know anecdotally that, when local authorities have had empty homes officers, they have taken a fabric-first and heating-first approach to ensure that houses are sustainably insulated and heated before they are let out. I think that that is integrated in the efforts that are made by the Government and local authorities, but I am afraid that I cannot offer much detail on it.

We are working with local authorities to ensure that the aims are met, and we continue to support them in delivering their strategies. For instance, we have funded Zero Waste Scotland to help it to provide support for capacity building. We are working to align what we do as a Government with local authorities’ delivery plans through, for example, our heat network support unit, which works with local authorities. In the future, we look forward to local authorities being entirely decarbonised, but we realise that we have to work with them to achieve that.

I thank the committee for the invitation. In advance of the meeting, I sent you a letter setting out our recent progress on heat in buildings, and I hope that it has been useful.

Last year, we consulted on proposals for a heat in buildings bill and, as I set out in my letter, we are still considering the responses to our consultation. The proposals would directly affect the lives of many people across Scotland, and we must take the time that is necessary to consider all the issues that have been raised.

That is especially important because, although heat and energy efficiency are, as you know, devolved, progress on making clean heating systems more affordable, and actions in that respect, are reserved to the United Kingdom Government. We need more certainty from the UK Government about its plans to prohibit polluting heating systems, the potential role of hydrogen in providing heat, and proposals to make clean heating systems more affordable by, for example, rebalancing gas and electricity prices.

Our thinking on the bill means that we are also still considering how to take forward related proposals for a new social housing net zero standard. We plan to reconvene our stakeholder review group as soon as is practicable before publishing our response.

I will turn briefly to reform of energy performance certificates—or EPCs. The Climate Change Committee has rightly said that the information in those certificates must be reformed, and that reform will be a critical step in the decarbonisation of our buildings. I am therefore pleased to confirm that the Scottish Government has today published its response to the EPC reform consultation and will, during 2025, lay before Parliament new EPC regulations introducing a new rating system that will come into force in 2026.

The system will ensure better information for consumers on how well a property retains heat and on the emissions and efficiency of its heating system, as well as redesignated and more accessible certificates. Consumers need to be able to trust the EPC assessment process, so the new regulations will be accompanied by tighter governance requirements to improve quality assurance.

EPCs operate across the United Kingdom internal market, so we will continue to work with the UK Government and other devolved Administrations on building new shared technical infrastructure. We will consult further on necessary adjustments to EPC lodgement fees to cover the costs of those changes before laying the revised regulations. I appreciate that EPC reform is technically complex, and I am therefore happy for officials to meet committee members to provide them with an informal factual briefing following the publication of our response.

Our delivery schemes continue to provide funding through grants and loans to homes and businesses for the installation of energy efficiency measures and clean heating systems. The schemes include targeted support for those in or at risk of fuel poverty. So far in the current parliamentary session, excluding 2025-26, we have allocated £1.3 billion of funding through our heat in buildings schemes, and I am delighted that our 2025-26 budget commitment is to invest an additional £300 million in our heat in buildings programmes. That will support more than 20,000 households to save up to £500 on their energy bills each year, helping to make their homes warmer and more comfortable.

I hope that those remarks provide helpful context for members, and I am happy to respond to questions.

On the point about the weather, I am—as are, I am sure, other members who represent the west coast of Scotland—very conscious of the fact that wind chill, as well as degrees below zero, are factors, and they have sometimes been overlooked in, for instance, the UK benefits system.

The estimate of £33 billion comes from our heat in buildings strategy. Updating that to reflect inflation and increased costs means that the cost is £45 billion in 2023 prices.

The other figure that you refer to, from the Just Transition Commission, does not reflect our proposed approach to decarbonising heating, particularly with regard to the role of heat networks, which do not seem to be factored into that figure. However, Scottish Government officials have met the Just Transition Commission to discuss the basis for its figures, and although it is fair to say that the cost of heat transition will be substantial, we do not accept that it would be £130 billion for Scotland, which is what the commission quoted.

I will refer you to the people who are ploughing their way through the consultation responses as we speak. A lot of the people who have been in touch are keen to ensure that what we do has flexibility and takes account of fuel poverty. I will bring in others to talk about some examples of the issues that have been brought to our attention.

I point to the fact that we are now in a position where new builds will not have gas or oil boilers in them—indeed, we are ahead of the rest of the UK on that point; that we have, as I have said, intervened in area-based schemes and elsewhere in order to reduce acute situations and, in addition, fuel poverty; and that we are producing an EPC system that, for the first time, will give people a clear idea not only of the cost of heating their house but of the environmental impact thereof. Those are good places to start, and they are good ways of engaging the public, too. As I, and many others, have said, no Government can do that work on its own. After all, we are looking at transforming the way in which we heat our houses in Scotland.

You make a lot of important points.

Many of the responses to the consultation have come from private landlords. As a Government, we acknowledge the importance of that sector, and you are right to point to the fact that work would need to be done in that sector, as well as others, in the future.

It is important to say that the revised EPCs do not of themselves mandate that people do things—making it possible or impossible to sell properties. It is important for the private rented sector that we get EPCs right, from the point of view of both the landlord and the tenant. One of the reasons why we are proposing to move from a 10-year EPC to a five-year EPC is to introduce a bit of equality for people in that sector, so that the consumer has more up-to-date information. We are also keen to ensure that there is a conversation with the private rented sector in the context of another bill, for which I am not directly responsible, about investment in housing.

The EPC issue highlights the fact that 50 per cent of the private rented sector will need to improve in the future if the targets that we have set on energy efficiency are to be met, whereas 65 per cent of the social rented sector already meets those targets.

We are conscious of that issue. As I have said, we are trying to avoid the scenario that you have set out while, at the same time, addressing fuel poverty and ensuring that the heating of houses is made more sustainable.

The Government recognises that the sector is under increasing pressure, not least due to the cost of living crisis and the additional costs of building and retrofitting houses. That is why the social housing net zero heat fund is there.

It is important that we keep rents affordable in the sector. All landlords, be they private or social, have a responsibility to ensure that that is the case, and the Scottish Government is working with them on that. I will bring in others to say more about our engagement with the social landlord sector.