What can we learn from tackling fuel poverty in Scotland?

Scotland and England take different approaches to tackling fuel poverty with the most fundamental distinction being the definition of the term itself. Simon Kemp, Warmworks Growth and Innovation Director explains why.

It is estimated that 34% of households in Scotland live in fuel poverty, with 19.4% living in extreme fuel poverty according to the  2023 Scottish House Condition Survey. These figures, while strikingly high, are derived from the definition of fuel poverty set out in the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019, which is calculated by how much of a household’s income is spent on energy bills.

This differs from the English measurement, which uses the Low Income Low Energy Efficiency (LILEE) indicator. This states that a household is in fuel poverty if they live in a property with an energy efficiency rating of band D or below and are left with a residual income below the official poverty line after spending the amount required to heat the home.

The Energy Saving Trust’s Home Energy Scotland advice network has centres across the country that act as the single entry point for all the Scottish Government’s centrally managed schemes. These centres are managed by trusted third-sector organisations, specifically Changeworks, Scarf, The Wise Group and The Energy Agency, each of which provides independent, free and impartial energy advice to anyone that calls their freephone advice line and refers those eligible for additional support to the right scheme. The model also provides referrals for benefit entitlement and income-maximisation checks, primarily provided by Citizens Advice Scotland.

What’s currently lacking south of the border is a similar structured approach to deliver at scale and there is a clear need for a joined-up advice network and a demand-led scheme that operates on a regional or national level. Currently, schemes are delivered with short-term funding on a local scale and those delivered by authorities tend to be targeting specific postcodes. This means a household could be missing out on the support they need because they happen to live one street over.

Key to tacking fuel poverty north of the border is the delivery of the Scottish Government’s £728 million national fuel poverty scheme, Warmer Homes Scotland, alongside local authority-led, area-based schemes. Both schemes provide grants for insulation, efficient heating and renewable technologies in the homes of households struggling with high energy bills, making them more affordable to heat. They work in a complementary way to provide support on a demand-led basis as well as being able to focus on hyperlocal priorities.

Since the first phase of the Warmer Homes Scotland scheme launched in 2015, it has had a tremendous impact on the lives of tens of thousands of households across Scotland, helping them to manage their energy costs and live warmer, happier and healthier lives.

Warmworks has been the Managing Agent of the scheme since its launch and was re-reappointed in 2023. The second phase of the scheme, which could run to 2030, takes a whole-house approach to the installation of energy efficiency improvements, with a greater focus on zero emissions heating systems, like heat pumps and electric heating, with the Scottish Government committing up to £104 million each year across the seven-year programme.

After a customer receives an application to the scheme from Home Energy Scotland, Warmworks manages the whole end-to-end process, placing the customer at its heart – from an initial survey that looks at the energy efficiency improvements they could benefit from, through to the installation of these improvements and a final independent inspection that makes sure they meet rigorous quality and safety standards.

Warmworks has used the same end-to-end management process in England, giving the organisation first-hand experience and an understanding of the challenges that local authorities and government face when commissioning these types of schemes.

The one to two-year funding cycle used in centrally funded English schemes in recent years also makes it difficult for social value to be embedded into programmes. In Scotland, the Warmer Homes Scotland scheme is a long-term commitment from the Scottish Government to fund this activity for up to seven years, giving the organisations delivering the scheme and their supply chain the certainty needed to set social obligations on things like training and apprenticeships, ultimately meaning apprentices can be brought on and trained up to deliver successfully within the life of the scheme.

Founded in 2015 as a joint venture partnership between Energy Saving Trust, Changeworks and Sureserve Energy Services UK, Warmworks began as an organisation delivering a single contract for a single client, with a total of 41 people in a single location. Since then, the organisation has grown to a team of almost 200, with offices nationwide – from Kirkwall to Newcastle upon Tyne and Stornoway to London. It remains committed to its founding mission, which is centred on tacking fuel poverty and being an active enabler of a just transition to net zero.

Warmworks’ network of sub-contracted local SME companies across the UK has grown to more than 50 over the last year and has consistently stayed at the forefront of delivering a great customer experience. New companies have joined and thrived in Warmworks’ supply chain. At the same time, existing partners have continued to grow their businesses, develop their people, and ensure a high level of service, resulting in successful outcomes for fuel poor homes and communities.

Warmworks has integrated social value as a core element of its operations, ensuring that the programmes it runs create meaningful, long-lasting benefits for residents and communities. Since October 2023, the organisation has created over 750 new jobs across Scotland. Providing an inclusive service and understanding that customers often need extra support is key to successful delivery and Warmworks’ service has been specifically designed to try to provide that wherever possible. To date, Warmworks and its network of supply chain partners have helped tens of thousands of homes and families through schemes across the UK.

Warmworks published its first UK-wide Impact Report late last year, outlining the results and impact of its work in homes and communities across the UK in 2023/2024. During that period, it helped over 7,000 households become warmer, happier and healthier, with households that received assistance saving an average of £294.08 on their fuel bills. This is demonstrative of the financial savings that can be generated by installing high-quality energy efficiency technologies and the significant impact that this can have on local people and communities.

It’s important to acknowledge that England hasn’t had the same continuity of centrally managed schemes that Scotland has had in the past decade, so the model of delivery is naturally at a different stage of its maturation. The direction England is moving in is encouraging, and there are people and organisations doing great work for households in need. What the Scottish model does show is that positive outcomes are more likely to be achieved by having a long-term delivery framework in place, supported by trusted agencies taking specific responsibility for different elements of the process, and there is a great opportunity for a similar joined-up approach and demand-led scheme to be implemented south of the border. Warmworks is eager to play a part in England’s further success and help create a mutually supportive environment where those in or at risk of fuel poverty can receive the proper support.