Second homes-owning Scots in £2m energy crisis fund 'scandal'

There are concerns it does not take into account whether it was going to an absent second home owner or a holiday accommodation owner.

The support came after concerns arose that those living in 'off gas grid' areas as energy prices soared were suffering greater hardship because the price of alternative fuels was not regulated or capped -meaning they did not benefit from Government intervention on energy costs.

Most of Scotland who have access to gas have been partly shielded from the worst of bill rises by the government’s Energy Price Guarantee introduced last October – which limited bills to £2,500 for the average household.

From July that guarantee was replaced by a cap imposed by the energy regulator Ofgem, which will mean the typical household will now pay £2,074 a year on its gas and electricity bill.

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But that is still double what it was in 2020 leading to anti-poverty groups fearing more will continue to suffer while over a third of Scots households are already living in fuel poverty.

And there have been worries that lives could be lost if there is no financial support going forward to replace the £400 provided over winter by government.

Those who used alternative fuels have instead received a £200 blanket payment - including those with second homes.

Former justice secretary now East Lothian MP and Alba Party deputy leader Kenny MacAskill has described it as the "scandal of the second homes windfall".

Department for Business, Energy & Industrial Strategy (BEIS) figures show that 19% of properties in Scotland (512,000) were outside of the gas grid therefore relying on alternative fuels, such as heating oil, tank or bottled gas, wood, solid fuel and liquid petroleum gas (LPG) as heat sources.

Official estimates show that the number of second homes and long term empty properties has risen from 47,965 in 2013 to 51,979 in 2022. For council tax purposes, a long term property is a property which is no one’s sole or main residence, or a second home, that has been unoccupied for one year or more.

Official figures show that there are 24,287 second home owners in Scotland who pay council tax with a further 17,794 holiday let homes that are classed as businesses and pay non-domestic rates. There are thousands more second home properties that are rented out to other people for long-term residential use.

The highest concentrations of second homes are in some of Scotland's most popular holiday destinations.

According to official data around one in every 20 dwellings in Argyll and Bute and the Na h-Eileanan Siar (Outer Hebrides) council areas of Scotland are second homes. On Orkney 5.1% of properties were second homes while in the Highland Council area it is one in 32 that are second homes.

A UK Government study shows the areas 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).

Mr MacAskill discovered the anomaly over the alternative fuel payment when he put forward a written question to the energy secretary asking whether the guidance to suppliers of the fuel payment included directions on second homes and holiday accommodation.

Amanda Solloway, the parliamentary under-secretary of state for energy, consumers and affordability responded: "The guidance does not include any specific detail regarding second homes and holiday homes."

Eligibility was having a home in England, Scotland or Wales that used alternative fuels for most of their heating, and was connected to the electricity grid. Those with an electricity supplier received automatic payments.

Mr MacAskill said: "It’s another Tory fiasco. Those in most need received insufficient support to keep themselves warm.

"Meanwhile the wealthiest received support that they didn’t require. Lessons could have and should have been learned."

The fair energy prices campaigner added: "Being off the gas grid is an issue that’s worse in Scotland than in England and Wales and highest in those areas in Scotland furthest north and with the coldest climate. These areas also have the highest rates of second home ownership in the country.

"There had been time to devise a scheme to support those in most need. It was common knowledge that the areas of highest off gas grid were those with highest second home ownership."

He pointed out that areas where fuel poverty is highest is also where second home ownership is at its greatest.

According to Scottish Government modelling estimates, from October 2022, there were around 860,000 households in fuel poverty in Scotland - around 35% of homes.

That is 247,000 more than in 2019 when the last Scottish House Condition Survey (SHCS) showed 613,000 households were in fuel poverty - around 25% of homes.

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.

It is defined in Scotland, 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.

An analysis from February 2022 showed that levels of fuel poverty in Scotland range from 19% in East Renfrewshire, 26% in West Lothian and 27% in Midlothian to 57% in Comhairle nan Eilean Siar, 47% in Highland and 46% in Argyll and Bute.

"Those who need help most and could have done with much more than £200 to meet costs can hardly be comforted by knowing that second homeowners many of whom wouldn’t be using them at the time of year were getting a credit to their energy accounts," said Mr MacAskill.

Energy UK, the trade association for the energy industry including suppliers said: "We feel the Government would be better placed to comment on this."

A BEIS spoksman said: " It was essential that households started to receive support from October, any further delay on second homes could have risked the start date for delivering the scheme. This would have impacted many more households, including the most vulnerable.

"Amending our energy support scheme in this way could also stop people who are paying on behalf of elderly or disabled friends and relatives from receiving the discount.

"We have continually taken action to help households, providing £37 billion worth of support. We gave a £400 discount on energy bills this winter and eight million of the most vulnerable households received £1,200 extra support. "