Ministers have come under fire for failing to fulfil pledges to eradicate fuel poverty after it hit a 12-year high with over one in three now affected despite government moves to support the most vulnerable in the cost of living crisis.

Scottish Government modelling under the Ofgem energy price cap, seen by the Herald, estimates that from January to March, 2024 there will be around 840,000 households in Scotland suffering from fuel poverty. That's around 34% of households.

It comes as ministers set the seal on the cancellation of the £30 million Fuel Insecurity Fund, which was last year described by first minister Humza Yousaf MSP as a “vital lifeline” for thousands of struggling households.

The Scottish Government set a target that in the year 2040, no more than 5% of households would be in fuel poverty.

It came after a previous pledge was made to ensure that by November 2016, "so far as is reasonably practicable, people are not living in fuel poverty in Scotland".

The Herald: Humza Yousaf

Fuel poverty relates to households that must spend a high proportion of their household income to keep their home at a reasonable temperature. It is affected by three key factors - a household’s income, their fuel costs, and their energy consumption, which in turn is affected by the energy efficiency of the home.

In Scotland it means that after housing costs, the total fuel costs needed to maintain a satisfactory heating regime are more than 10% of the household’s total taxable income.

Official analysis shows that in the past 12 years only 2013 comes close to the current estimated levels with 31.7% at that point recorded as being in fuel poverty.

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented: "The targets to end fuel poverty in Scotland - and in the rest of the UK - have never looked so distant.

"One of the key solutions is for faster upgrades of homes to improve energy efficiency and move to heat pumps. But even while the Scottish Government can promise to upgrade more homes, unless we see structural reform in the energy markets, we're unlikely to see fuel poverty eradicated.

"What needs to happen is the decoupling of the price of electricity from the price of gas and reform of how energy firms buy and sell power. This will mean that the benefits of the cheaper renewables generated in Scotland can be passed on to the customers directly.

The Herald: Make elimination of fuel poverty a political priority

"The Fuel Insecurity Fund was a vital part of Scottish households' defence against surging energy bills."

Last week Ofgem said that the new price cap will be set at £1,690 from April, the lowest for two years.

It means a drop of £238 a year, or around £20 a month, for a household using a typical amount of energy since the winter.

But the cap remains 62% higher than three years ago when energy prices began to surge as the global economy recovered from Covid-19 lockdowns. The invasion of Ukraine in late February, 2022 then prompted a further jump in prices, as western allies sought to economically isolate Russia, a major gas and oil supplier.

This winter there is was no reintroduction of a £400 energy bills support scheme to help households as was the case last winter when the UK Government's Energy Price Guarantee set average dual fuel bills at £2500 per year.

"It is far too premature for politicians to think that the crisis is over," added Mr Francis.

"We would urge politicians from across political parties to call for reform to standing charges, better regulation of the energy industry and a proper windfall tax on those firms profiting from the misery households face."

The Scottish Fuel Poverty Advisory Panel has been raising concerns about the "particularly worrying" rising levels of fuel poverty in Scotland.

The panel which oversees the Scottish Government's progress in its strategy for tackling fuel poverty and acts as a statutory consultee told ministers that it was "hard to see" where the Scottish Government budget with the cut to the Fuel Insecurity Fund (FIF)  "leaves the statutory fuel poverty targets".

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Since it was set up in 2020, the fund has provided £9 million in heating grants to those struggling with bills, paid for 81,000 top-up vouchers for pre-payment meters and supported 55,000 tenants through a social landlords scheme.

In March, last year the first minister announced a commitment to double the FIF from £10m to £20m and triple it to £30m for 2023-24.

When he assumed office in March this year, the First Minister made a strong commitment to reducing fuel poverty, saying: “In a country as energy rich as Scotland, we should not have people living in fuel poverty.

“It is of course only as a result of the UK Government’s mismanagement of the economy and the cost of living crisis that we are having to take this action. This Scottish Government will always put the interests of the people of Scotland first.”

The panel have been urging ministers to provided even a slimmed down FIF in 2024/25 to avoid a "cliff edge for the people who currently rely on support".

It said the FIF has and does provide "vital support for fuel poor people, who are amongst the most vulnerable living in Scotland".

The panel had been concerned over the extreme fuel poverty rate from March which estimates there were 739,500 households in extreme fuel poverty - around 29% of homes. That's a rise from 12.4% in 2019.

The panel said there was a "stark contrast" in the current extreme fuel poverty rate and the targets that have been set.

It's pre-winter analysis stated that it is concerned that Ofgem’s price cap calculation does not adequately recognise costs either of heating a home with electricity, or the average costs for those who rely on unregulated fuels. It said it therefore "fails" to recognise the fuel cost consumption for those living off-gas grid.

A UK Government study shows the areas that have the highest concentrations of home owners that are off the gas grid are in Orkney (100% or 11,000 homes), Shetland (100% or 11,000 homes), Western Isles (88% or 13,000 homes), Highland (61% or 74,000 homes) and Argyll and Bute (56% or 27,000 homes).

Energy minister Gillian Martin said: “These findings highlight the real challenges facing by householders from increased energy prices, the most important factor behind fuel poverty.

"I welcome the continued improvement in the energy efficiency of our building stock, although we need to do more to meet our climate targets and eliminate energy efficiency as a driver of fuel poverty.

“It is the UK Government that has continually failed to take the necessary steps to support people now and make the necessary changes – which only it can take - to ensure households and businesses never experience an energy crisis like this again. This includes providing meaningful, targeted support to those who need it most – including the introduction of a social tariff on energy bills which would protect our most vulnerable from energy price shocks in future.”