Figures published this week by the Scottish Government reveal that nearly £61.8 million of a total £192m set aside for Area Based Schemes energy efficiency projects has not been spent over the last three years, with £10m of that unused in 2023/24 alone.

The Area Based Schemes (ABS) are designed by councils and delivered alongside delivery partners, to fund energy efficiency improvements for homeowners and private rented homes in Scotland’s most fuel poor areas.

EHA, a coalition of housing, environmental, fuel poverty, consumer and industry organisations, has argued that had it been spent, this funding could have supported the equivalent of nearly 5,000 households through home upgrades, such as external wall and loft insulation, as well as upgrading to clean heating systems – a direct investment in tackling fuel poverty and reducing the carbon emissions of Scottish homes.

Gillian Campbell, co-director of the EHA, said: “The ABS programme is an excellent scheme that has seen over £130m invested in upgrading homes in the last three years. That investment is transforming the lives of whole communities, cutting fuel poverty, creating jobs and improving health and wellbeing.

“However, over the last three years, nearly a third of the total Scottish ABS budget has gone unspent. This should not be happening when fuel poverty rates are rising. We also know that some councils that fully spent their allocations put forward additional ‘oven-ready’ projects, but these were knocked back by the Scottish Government.

“In August 2023, we published a report highlighting this issue and suggested changes to reduce underspends, making sure fuel-poor households are not left behind. However, we’re still seeing this vital fund underspending.” 

EHA’s report found that delivery of ABS was inconsistent across the country, with many councils able to fully spend their allocation and absorb underspend from elsewhere. However, some local authorities have consistently underspent their allocations.

One of the reasons for the underspend is that councils often don’t receive their grant allocation until several months into the financial year. This means they have limited time to procure and deliver the work before the winter weather kicks in.

Some of these underspending council areas have high levels of fuel poverty, but even those with lower levels of fuel poverty have pockets of hardship, where households could be benefiting from lower bills and warmer, healthier homes.

EHA is calling on the Scottish Government to work with councils and delivery partners to make sure this funding is fully spent in future. The group is specifically asking for the Scottish Government to:

• Advise councils of their grant allocation earlier in the year so they have more time to procure and deliver the programmes
• Reallocate any underspend early so fuel poor households receive the help they need
• Work with councils to develop improvement plans where they are consistently underspending.