Energy Performance of Buildings (Scotland) Regulations 2025: technical consultation analysis

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Introduction

The Scottish Government plans to lay new Energy Performance Certificate (EPC) regulations before the Scottish Parliament later in 2025, which (if passed) will come into force in 2026. To support the planned changes, the Scottish Government developed a range of proposals designed to cover the cost of delivering the new operational framework. In order to inform and finalise the changes, the Scottish Government conducted a technical consultation to seek feedback on their current proposals.

The public consultation ran for just over six weeks, between February and March 2025. It asked seven questions in total, and sought feedback on three broad issues:

•Lodgement fees

•The introduction of an on-site audit and inspection function

•Penalty charges

Three workshop events were also held to gather qualitative feedback. All attendees represented organisations working across the property and/or energy sectors.

Respondent Profile and Caveats

A total of 29 written responses were included in the final analysis. Of these, 16 responses were received from organisations and 13 from individuals. Organisational responses were received from a range of different sectors, including those focused on the built environment, local authorities, Approved Organisations (AO), those focused on real estate, and energy focused organisations.

In addition, 46 people attended the workshops, all of whom represented organisations. It should be noted, however, that there may be some overlap in workshop attendees and those who provided written responses. It was possible for respondents to take part in both ways.

Due to the small number of responses provided overall, elements of the reporting were often based on the feedback from just one or two respondents. The small numbers meant it was difficult to identify recurring topics or themes. As such, the report sets out a high level summary across the breadth of comments and feedback provided.

The findings reflect only the views of those who chose to respond to this consultation. It should be noted that respondents to a consultation are a self-selecting group, and only a small number of responses were received on this occasion. The findings should not, therefore, be considered as statistically robust or representative of the views of the wider population. The small number of responses do, nevertheless, reflect the fact that this was a focused, technical consultation, which was very much targeted at a specialist audience within the EPC assessor and enforcement communities of interest.

Key Findings

Overall, between half and two thirds of respondents who provided a rating at the closed questions supported each of the proposals:

•19 out of 28 respondents (68%) supported the use of a statutory fee levied on lodgement of EPCs to fund the new elements of the regulatory regime

•14 out of 28 respondents (50%) supported raising the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs

•17 out of 28 respondents (61%) supported a review of the lodgement fee level within two years of the new regulations coming into force

•16 out of 28 respondents (57%) supported reviewing the on-site audit and inspection function within two years of the new regulations coming into force

•16 out of 25 respondents (64%) supported reviewing the penalty charges issued to those who do not provide a valid EPC within two years of the new regulations coming into force

Across each of the proposals, most of the opposition came from individuals rather than organisations. At each question, most (although not always all) organisations were supportive or neutral, while individuals were more mixed between those who supported, opposed or were neutral about the proposals.

Beyond the specific proposals, respondents also raised a number of issues which they felt needed to be addressed. Those mentioned repeatedly throughout consultation responses, between different respondent groups, and across both the written and workshop event feedback included:

•The need to tackle the quality of EPC assessments and the resulting data/certificates

•The need for more effective monitoring, enforcement, and implementation of penalty charges to be issued to those who do not provide a valid EPC

•Consideration of the introduction of fees to access the data held on the EPC Register, particularly where this is utilised for commercial purposes

Lodgement Fees

Funding the EPC Regulatory Regime via a Statutory Fee on EPC Lodgement

Of the 28 respondents who answered the closed part of this question, 19 (68%) supported the proposal while seven (25%) opposed it. All opposition came from individuals.

Those who supported funding the EPC regulatory regime via the addition of a statutory fee levied on the lodgement fee typically suggested it was sensible, reasonable, and consistent with the current system. Respondents agreed that the system should be paid for by the customer or service user. A few (including organisations and an individual) also felt that the proposed fee would not adversely affect consumers. Respondents did stress, however, the need to ensure the fee remained reasonable in the future, that there needed to be transparency in how the fee is set and reviewed, and information on how the increased revenue and regulatory functions would enhance EPCs and boost consumer confidence. A few also suggested that consideration be given to charging for access to the EPC register data in order to more fairly share or distribute the costs between different service users. This was also a common point raised in the workshop events.

Of the individuals who opposed this proposal, three argued that it represented a tax, one felt it was an unnecessary cost, and one felt that the EPC function itself was not fit for purpose. Another argued that the EPC register was used by many different parties and so funding via the lodgement fee alone appeared unfair.

Raising the Lodgement Fee by £3.40

Of the 28 respondents who answered the closed part of this question, 14 (50%) supported the proposal while 12 (42%) opposed it. Opposition was mostly (but not exclusively) noted by individuals.

A range of reasons were given for supporting the proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs. This included views that:

•The increase in the fee would cover the costs of the additional regulatory services which will require additional resources, and ensure the system is well supported and quality assured

•The increase would be broadly in line with inflation, which was considered reasonable

•The fact that the proposed costs would remain lower than some other European countries/the European average was welcomed

It was noted, however, by a range of organisational sectors across both the written responses and workshops (and by at least one individual) that the increase in the fee (especially when combined with the reduced lifespan of the EPC from 10 years to five years) would have significant financial impacts for social housing providers. There were also concerns that the increase could have a disproportionate impact on landlords and property agents operating in remote, rural and island locations. One individual also suggested that the fee should be implemented as a percentage of the total cost rather than a flat fee, and argued that there needed to be a direct mechanism for lodging an EPC with the register. Workshop attendees suggested that a mechanism should be included to accommodate inflationary increases.

The organisations that opposed this proposal tended to do so due to the use of a flat fee increase which would be applied to all sizes, types and values of property, as well as the scale of the increase. Individuals who opposed did so either because they viewed this as a tax or perceived there to be problems with the current quality of EPCs. Individuals were also concerned about the scale of any future price increases, and that the additional cost would be passed on to customers.

Review the Lodgement Fee within Two Years

Of the 28 respondents who answered the closed part of this question, 17 (61%) supported the proposal while eight respondents (29%) opposed it. Again, most of the opposition (but not all) came from individuals.

Those who supported the proposal to review the lodgement fee level within two years of the new regulations coming into force felt it was sensible to include a timely review in order to consider whether the fee amount was appropriate and allowed the regulatory functions to operate effectively. Such a review would also provide the opportunity to take account of inflation and other factors relevant to the economic and policy landscape. A few suggested that regular reviews should be undertaken on an ongoing basis, and that the review should consider the system more widely. Respondents caveated their support, however, that reviews should not automatically bring price increases, and any increases needed to be justified and necessary to cover the costs of the regulatory framework.

The reasons for opposing this proposal were generally split between those who opposed the lodgement fee in principle or opposed any increases to this, and those who felt that the timescale or approach to the review could be adjusted to be more efficient.

On-Site Inspection and Audit Function

Of the 28 respondents that answered the closed part of this question, 16 (57%) supported the proposal while just four respondents (14%) opposed it. All opposition came from individuals.

Those who supported the proposal to review the new on-site audit and inspection function within two years generally considered it a sensible approach. It was seen as important to consider the effectiveness of this process; to ensure it was working as intended; and to identify any potential improvements or amendments that were needed. Workshop attendees also considered the use of on-site audits and inspections helpful in tackling perceived poor quality and inaccuracies in assessments.

Practical considerations for on-site audits and inspections were highlighted by respondents, both in the written responses and in the workshops. This included challenges in gaining access to properties, supporting vulnerable tenants, and data sharing/data protection issues. Workshop attendees also stressed the need to consider deliverability in remote, rural and island areas, where the practicalities of distance, access, and the limited number of local assessors could present challenges. Clarity was also said to be required around who would carry out the audit and inspection function and be responsible for the competency of these workers. It was felt that a collaborative approach was needed with Approved Organisations (AOs) to avoid inconsistency.

The individuals who opposed a review of the on-site audit and inspection function did so because they opposed the introduction of this function itself. One was also concerned about duplication of effort between the audit function carried out by accreditation bodies and those proposed. Another felt that the on-site audit and inspection would not improve quality of EPCs, and argued enforcement action was required instead. Similarly, a range of additional monitoring, training and enforcement requirements were highlighted in the workshops to tackle quality and accuracy issues.

Penalty Charges

Appropriate Level of Penalty Charges

A range of views were expressed by respondents when asked about the appropriate level of penalty charges proposed under the new regulations. Some were strongly supportive of penalty charges and increasing these in some or all circumstances. Others were against or ambivalent about the prospect of increasing penalty charge levels. Some (mainly individuals) were against the use of penalty charges at all.

Other key suggestions or issues discussed by respondents included:

•Penalty levels should be sector specific rather than flat rates

•Inflationary increases were considered sensible as a starting point, with the charge levels adjusted for inflation on an ongoing basis

•Retention of the current penalty levels because they are already above those proposed in England and Wales, and have rarely/never been imposed

•The need to strengthen the monitoring and enforcement of EPC regulations otherwise penalty charge levels are redundant

•Opposition to the use of penalty charges at all, or concern that the charges were set too high

Review of Penalty Charges within Two Years

Of the 25 respondents who provided a rating at the closed element of this question, 16 (64%) supported the proposal while five (20%) opposed it. Again, all opposition came from individuals.

Those who supported the proposal to review the level of penalty charges within two years felt this was appropriate and sensible. It was felt that a review would offer a useful opportunity to ensure penalty charges were set at a fair, appropriate, and effective level; that the correct balance had been stuck between lodgement fees and penalty charges; and to look at both penalty charges and the on-site audit and inspection functions to determine if any changes are required to support improvement. Again, a few advocated for more regular reviews to provide longer term monitoring and allow for inflationary adjustments.

However, it was stressed that enforcement would be critical, otherwise penalty charges would be ineffective. This was a key concern across the workshops in particular, with attendees in all three groups discussing a perceived lack of enforcement currently. Tackling enforcement was considered to be more important than penalty levels at this stage.

The individuals who expressed opposition to this proposal did so again because they opposed the use of penalty charges, they felt it was already difficult to stay abreast of legislation, and because penalty charges had never been applied in practice.

Other Comments

Both written respondents and workshop attendees were also invited to provide other feedback. Key issues included:

•The perceived low payments made to assessors and low charge rates for EPC lodgement and auditing

•EPC affordability and concerns about rising costs due to the combination of the current proposals, the need to renew EPCs every five years (rather than every 10 years), and other changes imposed on the sector

•The perceived value of EPCs or gaps in their capabilities due to assumptions used in the assessment process, the use of out of date information and a renewables lag, and lack of quality and accuracy

•The competency and integrity of assessors needing to be strengthened to ensure EPCs are accurate and consistent

•The need to consider using a map based navigator for EPCs

Finally, workshop attendees also highlighted issues for consideration in remote, rural and island areas. In particular, costs and workforce capacity, as well as ensuring the EPC itself reflected the differences relevant to the environment and the nature of the properties in these areas.

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Background

Energy Performance Certificates (EPCs) play a key role in Scotland’s property market. They ensure that current or potential owners and tenants have information on a property’s energy efficiency and emissions, and on potential improvements that could be made. Over 200,000 EPCs are issued every year, covering a range of households, workplaces, and community buildings across Scotland.

The Scottish Government has a long-standing commitment to improving EPCs, ensuring that they are of high quality and provide information that is aligned with net zero policy objectives.

To support such improvements, the Scottish Government has conducted various public consultations. An initial scoping consultation was undertaken in 2021. This was followed by a consultation in 2023 which sought views on a final package of proposed reforms to improve the quality of EPCs and make them more fit for purpose in supporting net zero. The Scottish Government’s response to the 2023 EPC Reform Consultation was published in January 2025, which detailed the reforms that would be taken forward and set out intentions to introduce new EPC regulation.

The new EPC regulations will be laid out in the Scottish Parliament later in 2025, and are expected to come into force in 2026. These regulations will enable the Scottish Government to introduce strengthened operational governance arrangements for the Approved Organisations (AOs) and EPC assessor market, and will enhance quality assurance for consumers. The level of EPC lodgement fees have not been revised since 2017. However, these will need to be updated to support the development and ongoing maintenance of the regulatory infrastructure, and to support the costs of delivering the new operational framework. In addition, the level of penalty charges have not been reviewed since 2009, and so revisions may also be needed to ensure these remain effective. To inform these changes, the Scottish Government conducted a further technical consultation to seek feedback on the proposals.

The Consultation

The technical consultation ran for just over six weeks, opening on 12 February and closing on 28 March 2025.

The consultation was available on Citizen Space, the Scottish Government’s online portal for public consultations. In addition, respondents could submit written responses via email or post. Three themed public workshop events were also conducted to gather qualitative feedback.

The purpose of this technical consultation was to:

•Set out the Scottish Government’s intended lodgement fee levels for reformed domestic and non-domestic EPCs when new regulations are brought into force during 2026, and to seek stakeholder views on this

•Seek stakeholder views on the level of penalty charges to be imposed for non-compliance with the new regulations

•Finalise consultation upon EPC Reform ahead of laying the new regulations during 2025

The Citizen Space consultation document asked seven questions in total, including:

•Five questions which included both a closed element (i.e. where respondents were asked to select an option from a list of options) and an open element (i.e. to provide further comments in free text format)

•Two questions which asked only an open element

At each of the three workshop events, Scottish Government staff delivered a presentation which set out the proposals and led discussion focused on the same consultation questions as the main Citizen Space questionnaire. Workshop attendees were also asked to consider the impact of the proposals, both in general and in relation to specific equality groups.

Respondent Profile

In total, 30 written responses were received to the technical consultation, however, one was identified as a duplicate. As this was an identical response from the same respondent it was removed from the data analysis. This resulted in 29 responses being included in the data analysis.

Most responses (n=25, 86%) were received via Citizen Space, although four (14%) were submitted by email and manually entered into the dataset. Overall, 16 responses (55%) were received from organisations, and 13 responses (45%) were from individuals. Among the individuals, five were identified (either from data provided in the Respondent Information Form (RIF) or from within their consultation feedback) as being professionals who worked in the sector. While these respondents were categorised in the data as being ‘professional individuals,’ it should be stressed that a specific question was not asked about this, and so it is not possible to determine with certainty whether other individuals also worked in the sector or not. The table below provides a breakdown of responses by respondent type.

¹ The local authorities included one mainland authority, one rural mainland authority, and one island authority.

Note: this table does not add up to 100% due to rounding.

In addition to the written responses, 46 people attended the workshops. While the workshops were advertised to all via Citizen Space, all of the attendees represented organisations working in relevant sectors. The table below outlines the number of attendees from each organisational sector.

¹ The housing associations included two from mainland Scotland and one island area.

² The local authorities included six mainland authorities and one island authority.

Note: this table does not add up to 100% due to rounding.

Caveats

Not all respondents answered all questions. In addition, some respondents answered the closed element at individual questions but did not provide free-text comments at the open question element (or vice versa). Respondents may also have participated in the consultation in multiple ways. For example, it was possible for people to attend more than one event and/or to submit both a written response and attend a workshop event. For completeness, all data provided was included in the analysis. Further, all responses were treated with equal weight within the analysis.

Due to the small number of responses received overall, elements of the following reporting (e.g. individual issues or topics) are often based on feedback from just one or two respondents. The small numbers meant it was difficult to identify recurring topics or themes. As such, the report sets out a high-level summary across the breadth of comments and feedback provided.

Similarly, while the total sample consisted of respondents from different organisational sectors, as well as individuals and those working within the sector (as outlined above), the following results are typically disaggregated at the individual versus organisational level only. The small numbers, both overall and within respondent groups, meant it was difficult to identify any differences in opinions between different sectors/groups, with some issues only raised by one respondent each.

Where respondents gave permission for their responses to be published, these can be read on the Scottish Government’s website.

In addition to considering the main issues covered by the consultation paper, the workshop events also involved broader discussion of other EPC issues. This included the introduction of RdSAP 10^[1] and the Home Energy Model (HEM). These events also provided stakeholders with the opportunity to ask questions of the Scottish Government team, both in relation to the current proposals as well as wider issues. The findings in this report focus on the parts of the workshop feedback which were directly related to the consultation topics and questions.

While the workshop events considered the same consultation questions as those included in the Citizen Space questionnaire, discussions tended to focus more generally on the higher-level topics rather than the specific questions asked. As such, the results have been presented under separate coverage at the relevant sections below. Similar issues were often highlighted between the written responses and the workshop feedback and, therefore, elements of repetition may be contained below.

No quotes have been extracted from the workshop events as permission and informed consent was not sought for this. As such, all quotes contained within this report are extracted from the written consultation responses. Quotes have only been used from responses where permission was provided to ‘publish the response’ in the RIF.

Finally, the findings here reflect only the views of those who chose to respond to this consultation. It should be noted that respondents to a consultation are a self-selecting group, and only a small number of responses were received for the current exercise. The findings should not, therefore, be considered as statistically robust or representative of the views of the wider population.

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The consultation paper set out three new regulatory functions, each to be exercised by the Scottish Government. These included:

•A new EPC Register

•An EPC Calculation Methodology

•A new on-site Audit and Inspection function

The Scottish Government expects to begin delivering these three new regulatory functions during financial years 2026-27 and 2027-28, to coincide with the new regulations coming into force. While the set-up cost would be borne initially by the Scottish Government, proposals were put forward for the ongoing running costs to be covered by lodgement fee income.

The consultation proposed increasing the current lodgement fees by £3.40 for both domestic and non-domestic properties, meaning the new fees would be as follows:

•£6.00 for domestic EPCs

•£15.50 for non-domestic EPCs

In order to ensure stable fee levels to provide certainty for AOs in projecting future costs, the consultation also proposed that a review of the fee level would be conducted within two years of the regulations coming into force to ensure they remain appropriate.

Funding the EPC Regulatory Regime via a Lodgement Fee

Q1. To what extent do you support the Scottish Government’s proposal that elements of the EPC regulatory regime which provide direct benefits to service users, should be funded through a statutory fee levied on lodgement of each EPC?

Of the 28 respondents who answered the question, 19 (68%) supported to some extent the use of a statutory fee levied on lodgement of each EPC in order to fund the new elements of the EPC regulatory regime. This included individuals and a wide range of organisations from different sectors. Conversely, seven respondents (25%) opposed this proposal, all of whom were individuals.

Reasons for Support

Those who supported the use of a statutory fee typically suggested it was sensible, reasonable, and consistent with the current system. A few felt that this provided standardisation. Meanwhile, several respondents agreed that the process should be paid for by the customer/service user, with a few (including organisations and an individual) noting that the proposed fee meant that it would only have a small impact on overall EPC costs and so should not adversely impact consumers:

“[Organisation] strongly supports the Scottish Government’s proposal that elements of the EPC regulatory regime which provide benefits to service users should be funded through a statutory fee levied on lodgement of each EPC. This funding model has been followed for several years now and it has enabled the system to be continuously developed and maintained with very little disruption or financial strain on service users.” (Energy Focused Organisation)

Caveats to Support

Support was offered by one individual on the condition that the fee remained reasonable. While they agreed that the current fee proposals were reasonable, it was stressed that any future increases needed to remain so.

One organisation noted that, while they generally supported the proposal, a statutory fee, combined with the reduced validity period of individual EPCs (from 10 years to five years) would result in increased costs for social housing provision. They also supported the proposal for a statutory fee in relation to non-domestic properties on the condition that the calculation methodology was improved and provides more accurate assessments that can be used for future investments. It was suggested that certain measures can currently have a greater impact than the software predicts, which can be misleading.

Another organisation also somewhat supported the proposal, but was concerned about inaccuracies in EPCs, particularly when they have been conducted by organisations with perceived vested interests. They advocated for the on-site audit and inspection function (discussed more in the following chapter) to be carried out proportionally across Scottish local authority areas.

One organisation stressed that there needed to be transparency in how the fee was set and reviewed, along with clear guidance on how the additional revenue would enhance the quality of EPCs and boost consumer confidence. Similarly, a few respondents stressed that the Scottish Government need to ensure the benefits to the customer and society are clear and known, particularly in relation to the audit function. One specifically highlighted that the consultation paper and question did not set out the measures of the range of benefits.

Two organisations urged the Scottish Government to also give consideration to charging for access to the EPC register data, as this holds significant value and is widely used within the property sector. This was considered to more fairly share or distribute the costs between the generation of EPCs and other users of the data. One of these organisations also suggested that additional or alternative funding could come from enforcement measures. For example, the use of fines against companies found to have issued inaccurate EPCs following an inspection.

One individual, while content with a statutory fee, argued that assessors should be able to lodge EPCs directly with the new register rather than using “middle men companies”. They were concerned that these companies would add a markup or multiplier to the fee:

“Happy for there to be a statutory fee, however, the middle men companies which assessors have to lodge through should be eliminated. They will just put a multiplier onto the statutory fee, as they currently do with lodgement fees (by ~250% I might add), which will have to be passed onto customers as there is already a race to the bottom in the industry. They do not provide any benefit to assessors or public bodies and can be done fully in house by the Scottish Government. Assessors should be able to directly lodge with the new Scottish EPC Register.” (Individual)

Reasons for Opposing

As noted above, all opposing views came from individuals. Three perceived the use of a statutory fee on the lodgement of EPCs as a tax, with one of these respondents noting that increased taxes meant less of their income would be available for essential living costs.

One individual felt that such a fee represented an unnecessary cost. Meanwhile, another argued that the EPC function itself was not fit for purpose, had no direct benefit to anyone, and therefore was not required.

Another individual argued that the EPC register was used by many different parties, and so funding this via the lodgement fee alone appeared unfair. This comment was consistent with the suggestion above from different respondents that charging for access to this could provide additional income.

Raising the Lodgement Fee by £3.40

Q2. To what extent do you support or oppose the Scottish Government’s proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs?

Note: this table does not add up to 100% due to rounding.

Of the 28 respondents who answered this question, 14 (50%) supported to some extent the proposal to raise the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs. This consisted of a wide range of organisations from different sectors and three individuals. Conversely, 12 respondents (42%) opposed this proposal, including most individuals (n=9) and three organisations.

Reasons for Support

Respondents gave a range of reasons for supporting this proposal. Some supported raising the fee in order to cover the costs of the additional regulatory services which will require additional resources, and to ensure the system is well supported and quality assured. Some suggested that the increase would be broadly in line with inflation, which they considered reasonable. A few also welcomed the fact that the proposed costs would remain lower than some other European countries/the European average.

A few other reasons were outlined, by one respondent each, including:

•The increase would be minor (particularly in the context of the entire EPC process), and affordable for most

•The increase was reasonable and appropriate to the costs of the new regulatory requirements

•The scale of the increase was fair and proportionate

Caveats to Support

One organisation noted that this increase would have significant financial impacts when applied to the full council housing stock, with increases potentially being passed on to tenants, both for the domestic and non-domestic estates. The reduced lifespan of the EPC from 10 years to five years was also highlighted as an issue that would increase costs, as the EPCs would need to be renewed more often. However, they were more positive regarding the non-domestic costs, suggesting the increase would be reasonable if the EPCs provide accurate and usable information.

Another organisation, while broadly supportive of the proposed increase, highlighted that it could have a disproportionate impact on some, particularly landlords and property agents operating in remote, rural and island locations. They stated this was because many properties require more frequent reassessment due to their type of heating systems (e.g. biomass, oil, electric heating) which may necessitate additional EPC lodgements (although it should be noted that there is, in fact, no requirement for more frequent reassessment due to heating system type, in the EPC regulations), and because rental yields are typically lower meaning increased fees represent a higher proportion of landlords’ operational costs. This respondent was also concerned about any future increases. They stressed that, should further increases be considered, the broader economic challenges faced by landlords and property agents would need to be reflected in the decision.

One individual suggested that a higher increase should be considered for non-domestic EPCs because the surveys are more expensive than those for domestic properties. They felt that the increase should be implemented as a percentage of the total cost, rather than a flat rate. This respondent also echoed their earlier comment against the use of “middle men companies”. They again argued that AOs should not be required and that there needed to be a direct mechanism for lodging an EPC with the register instead.

Reasons for Opposing

Only three organisations opposed the increase in lodgement fees. Across all three, the main concern was related to the scale of the increase. One highlighted the disproportionality between domestic and non-domestic properties. They felt that the increase as a proportion of the fee was significantly higher for domestic properties than non-domestic properties. Another felt that a flat rate increase across both domestic and non-domestic EPCs may have a disproportionate impact on smaller sized and valued properties. Instead, they argued that the fee should be linked to a property’s total floor area to ensure a fairer distribution of the costs. The third organisation felt the increase represented “a significant jump” (Approved Organisation), especially when taking into consideration the reduced validity period of the EPCs (and the need to renew more often). This respondent, along with one individual, was concerned that the EPC fees in Scotland could be higher than is charged in England, with the individual advocating for equality of pricing across the UK:

“…the increase will represent a big difference to current UK lodgement fees, and depending on the strand the EPC is lodged on could actually be more expensive than the lodgement fee applied by schemes^[2].” (Approved Organisation)

One organisation and one individual also echoed concerns raised above in relation to the increased frequency with which EPCs would need to be renewed. They suggested that the requirement to re-assess properties every five years would significantly increase (and potentially double) costs for local authorities and housing associations:

“The impact of the increase in lodgement fees and the decrease of validity period to 5 years will mean that RSLs [Registered Social Landlords] may need to spend almost 2x what they [are] spending at the moment.” (Approved Organisation)

One individual also suggested that increased costs would be passed on to customers rather than absorbed by AOs as they highlighted that the market price for EPCs was already very low and contained little room for assessors to absorb the increase to the fee. Further, they indicated that the increased cost to customers would be exacerbated by the implementation of the RdSAP 10, as the assessments would take longer to do.

Another individual was concerned that there would be duplication in the audit process, with both AOs/accredited bodies and the Scottish Government undertaking these.

Consistent with feedback at Q1, a few individuals again opposed the increase in lodgement fees on the basis that it represented another tax. One individual was concerned about the scale of any future increases in the fee amount. Another individual complained about the quality of current EPCs, suggesting that they were inconsistent and did not reflect the true nature of the building.

Review the Lodgement Fee Within Two Years

Q3. To what extent do you support or oppose the Scottish Government’s intention to review the lodgement fee level within two years of the new regulations coming into force, to ensure they remain appropriate?

Note: this table does not add up to 100% due to rounding.

Of the 28 respondents who answered the question, 17 (61%) supported the proposal to review the lodgement fee level within two years of the new regulations coming into force. Conversely, eight (29%) opposed this approach, consisting mainly of individuals (n=6).

Reasons for Support

Those who supported this proposal felt it was sensible to include a timely review in order to consider whether the fee amount was appropriate and allowed the regulatory functions to operate effectively. In particular, respondents felt it was important to understand and cover the actual cost of undertaking the regulatory functions, and provide the opportunity to take account of inflation as well as other factors relevant to the economic and policy landscape:

“Time-limited review processes would add valuable flexibility, enabling the Scottish Government to compare income generation expectations against results, to analyse the actual costs of undertaking the various regulatory functions in practice, and to consider inflationary pressures and the wider built environment context, prior to making any decisions to maintain or change the fee structure.” (Built Environment Focused Organisation)

The two year time period was also considered to be appropriate as it would allow sufficient time for the system to become established before conducting a review.

A few respondents advocated for regular reviews to be conducted, i.e. for this not to simply be a one-time only consideration. It was argued that regular reviews can avoid the need for large fee increases, and that reviews need not always result in a fee increase if it is not necessary:

“The lodgement fee should also be reviewed at least every two years thereafter. This would ensure that any required increases to fees, to account for increased costs, are made incrementally as required avoiding the need for large fee increases at any one point in time.” (Energy Focused Organisation)

A few also suggested that the review should consider the system more widely, looking at penalties for non-compliance, addressing bad practice, and identifying and rewarding good practice.

Caveats to Support

While somewhat supporting the review proposal, one organisation argued that there should be no further fee increases unless the situation radically changed.

Similarly, one individual was concerned that introducing regular reviews of the fee could lead to repeated increases which may not be reasonable. They stressed that all increases would need to be justified and necessary to cover the costs. For example, they were against any model which adopted annual fee increases determined by inflation plus a fixed amount or percentage.

One organisation questioned whether there would be any consultation on revisions to the lodgement fee following the initial two year review. They also suggested that it may be more sensible to review non-domestic lodgement fees after five years, as this would cover the lifetime of the new EPC certificate.

Another organisation questioned whether lodgement fees should be increased across the board, or whether revenue from penalty charges could be used to subsidise increases in the fees paid to AOs (which were considered to be too low currently). They stressed that any changes should incentivise good practice and compliance and address bad practice and non-compliance, rather than raising costs for all regardless of compliance levels.

Reasons for Opposing

The reasons given against this proposal were generally split between those who opposed the lodgement fee in principle or opposed any increases to this, and those who felt that the timescale or approach to the review could be adjusted to be more efficient.

The two organisations who somewhat opposed the proposal did not disagree with its aims, but rather they offered alternative options which they considered more effective. One argued that the review should be undertaken annually to highlight the value for money that was being achieved for stakeholders. The other suggested that, rather than a review, annual adjustments should be applied in line with CPIH^[3] inflation. They argued that this would allow price increases to keep pace with rising costs without the need for resource intensive reviews, although a review of fees/funding could be undertaken when significant changes in the services provided or structure of the EPC regime occur.

Again, the individuals who opposed this proposal were largely against the use of the fee to fund the regulatory functions. Consistent with previous responses, this was referred to as a tax, and was seen as escalating costs and burdens on property owners. One noted that the fee model included no real link to inflation, while another objected to increasing fees without any tangible benefits. Two individuals who strongly opposed the proposal provided more general feedback, with one objecting to penalty charges (discussed elsewhere in the consultation) and the other indicating distrust of the Scottish Government.

Feedback on Lodgement Fees from the Workshops

Views expressed in the workshops were largely consistent across the three events. It was also similar to feedback in the written responses (outlined above).

While there was some general agreement that the proposals in relation to lodgement fees and the increases in fees were fair, a range of issues or concerns were also raised, including:

•A strong desire to consider the introduction of fees for accessing and using the data from the EPC register. It was suggested that there could be differences in the nature of the data available via an open register and a closed register, or utilising a subscription mechanism, with fees applied for accessing additional or more detailed data. Introducing such a fee was considered fairer, particularly where organisations can monetise the data

•Concerns that the introduction of a statutory fee, increases to the lodgement fee, and the reduction in the validity period of EPCs (from 10 years to five years) would add significant costs in the domestic market, and for social landlords in particular, which may be beyond what they can realistically pay

•Concerns that the current proposals, combined with the introduction of the RdSAP 10 and the move to the Home Energy Model (HEM) would result in more significant increases in overall EPC costs than suggested by the consultation paper

•The perceived need to include a mechanism to take account of inflation over time

•Consideration of how to better ensure enforcement of the EPC requirements and penalising non-compliance

•More flexibility to be built into the non-domestic assessments related to the scale of work required

•The increases to the fee amount not addressing the time penalty related to carrying out assessments in remote, rural and island areas. Additional travel time is incurred in such situations, making the average cost of assessments higher. It was felt that more needed to be done to ensure local provision or to consider adjustments which may alleviate this

Source page 4

The consultation paper set out the rationale and purpose of including a new on-site audit and inspection function as one of the three new regulatory functions. It was argued that this would provide direct benefit to service users in enhancing verification procedures to ensure that their EPC and rating is accurate.

The Scottish Government propose strengthening the current desk-based audit of EPCs and conducting on-site inspections of a sample of properties in order to verify accuracy and give greater confidence to consumers regarding the reliability of their EPCs. These changes would be in line with the new European Union (EU) requirement for on-site verification of EPC assessment data in the Energy Performance of Buildings Directive. The additional audit function would be exercised independently of AOs, assessors, and property owners to ensure absolute objectivity over and above the current desk-based audits.

It was suggested that this regulatory function could be exercised on a time-limited basis until evidence was clear that a return could be made to desk-based-only oversight by the AOs. As such, the consultation proposed that the on-site audit and inspection function would be reviewed within two years of the regulations coming into force. It was suggested that this function may not be needed over a longer period if on-site inspections verify that EPCs are accurate and reliable, and that desk-based auditing is sufficient. The lodgement fees could then be reduced to reflect the removal of this function.

Review On-Site Audit and Inspection Function Within Two Years

Q4. To what extent do you support or oppose the Scottish Government’s intention to review the new on-site Audit and Inspection function within two years of the new regulations coming into force, to see if it remains appropriate?

Of the 28 respondents who answered this question, 16 (57%) supported the proposal to review the new on-site audit and inspection function within two years. A further eight (29%) neither supported nor opposed the proposal. Only four respondents (14%) strongly opposed this proposal, all of which were individuals.

Reasons for Support

Those who supported this proposal considered it a sensible approach. It was seen as important to consider the effectiveness of the audit and inspection process; to ensure it was working as intended, delivering the desired outcomes and meeting the intended objectives; and to identify any potential improvements or amendments required.

Specific elements that respondents felt the review should consider included (typically mentioned by one respondent each):

•EPC accuracy and confidence in ratings

•Operating costs and value for money

•Anomalies and the need for additional training and clarifications

•Whether the process provides proportionate support specific to the area

•Unexpected technical challenges

•Unintended consequences

Again, it was suggested that the two year timescale for the first review was sensible as the system would have time to bed-in and for data to be gathered to evidence the impact. One individual also noted that it would be important to review the changes once their effects can be assessed.

One organisation supported the use of an audit as they felt it could be difficult to conduct post-inspection on-site audits.

Another organisation again suggested that regular reviews should be undertaken.

Caveats to Support

Two organisations highlighted practical considerations for the on-site audit and inspection function and the potential challenges faced by auditors in gaining entry to properties. One questioned how compliance would be secured without infringing on property rights or creating tensions with occupiers. The other suggested there was a need for possible opt-out or alternative solutions in such circumstances.

Other challenges identified included (one respondent highlighted all three issues):

•The financial burden (both on auditing bodies and property owners), which would require careful consideration particularly due to the increase in lodgement fees

•That auditing EPCs after completion may be challenging where properties have been modified or circumstances have changed since the original assessment

•The consideration of practical solutions to address complications and avoid unintended consequences (e.g. unfairly increasing Professional Indemnity insurance cover for assessors undertaking EPCs)

One organisation cautioned that the audit and inspection function, and the review of this, needed to be well thought out to avoid any unnecessary changes in future, and that it should be designed in collaboration with AOs in order to avoid inconsistency.

Similarly, another organisation sought clarification around which body or organisation will be tasked with carrying out the audits and ensuring auditors have the necessary skills, qualifications and independence to perform the role. They also stressed that a consistent and transparent framework will be needed to guide the auditing process to ensure fairness and avoid inconsistency.

One organisation stressed that any changes or improvements identified as part of the review needed to be implemented in a timely manner. Meanwhile, another organisation suggested that any income generated via fines levied from inaccuracies in EPCs identified as part of the audit and inspection process should be reinvested into the system to support sustainability and improvement. As fines will be applied only for missing EPCs and not for inaccuracies, it is not clear whether this respondent misunderstood the proposals in this respect, or was recommending this as an additional area to be subject to fines.

Reasons for Opposing

One individual who opposed the proposal to review the on-site audit and inspection function sought clarity over the potential for overlap between the audit function carried out by accreditation bodies and the one being proposed as a new regulatory function to be carried out by the Scottish Government.

Two individuals appeared to oppose the on-site audit and inspection function more generally rather than the need to review it. One suggested this should be abolished and considered it to be “government overreach”. The other felt this was unnecessary, a waste of money and resources, and would not be impactful on climate change.

The fourth individual who opposed this proposal did not detail their reasons why.

Another individual who neither supported nor opposed the proposal to review the on-site audit and inspection function also provided negative comments on the perceived effectiveness of this function more generally. They felt that on-site audits would not make any difference to the quality of EPCs. Rather they suggested that the quality of assessors, potential conflicts of interest, and poor practice needed to be addressed with enforcement action and fines implemented by a central government team.

Feedback on On-Site Audits and Inspections from the Workshops

Again, feedback from the workshop events largely echoed the views expressed in the written consultation responses.

On-site audits were generally supported in order to tackle the perceived poor quality and inaccuracies in assessments, and to provide greater consistency and confidence in the system. Several attendees flagged problems with the quality and accuracy of some EPCs, which they perceived as being due to assessors spending too little time on-site, and ‘bad actors’ within the system. A few also suggested that quality suffered due to the desire or need to charge low prices for the service.

In order to tackle quality issues, questions were asked about the provision of additional training. This included whether remedial training could be introduced for those identified as delivering poor quality assessments and/or inaccuracies, or whether upskilling courses should be required at regular intervals. A few specific examples were outlined (by one attendee each), including:

•The potential for the introduction of a monitoring system similar to Ireland’s to address quality (where assessors start with a defined number of ‘points’ and have points deducted for quality infractions or are ‘red-carded’ for serious offences)

•That a clear process was needed for consumers to report poor performance and potential collusion, and to seek redress

•That the EPC Register could automatically flag issues of concern, for example, if one assessor submitted a large number of assessments in too short a time period

Again, practical challenges were highlighted. In particular, attendees flagged accessing properties as being an issue, both for landlords and assessors generally, and as a challenge for on-site audits and inspections. This was particularly problematic where there were vulnerable tenants. Other practicalities for consideration included coordinating joint site visits with other organisations which could significantly increase costs, and how to deal with cancellations on the day. It was also suggested by one attendee that on-site auditing would be much more expensive than the consultation paper suggested, and that monitoring at a distance through shared collaboration would be better.

Attendees also stressed the need to consider how deliverable on-site audits and inspections would be in remote, rural and island areas. They noted that distance, access, and the limited number of local assessors could make this challenging.

Other issues discussed by just a few attendees each included:

•That auditing should be a two-way process which identifies deficiencies in the current system and seeks to remedy them to ensure people get the proper recognition in their EPCs regarding their property’s energy efficiency

•A need to provide clarity and confirmation around how data sharing protocols might work in practice. However, data protection was also flagged as possibly presenting barriers or challenges for data sharing between organisations

•The ineffectiveness of the current system of monitoring and enforcement (by local authorities) was again highlighted, with attendees suggesting that a central body should be responsible for this

Source page 5

The existing EPC regulations allow local authorities, as the enforcement authority, to issue a penalty charge notice if they believe that a property owner has breached any requirements to ensure that a valid EPC is made available to prospective buyers or tenants when the property is to be sold or let. Penalty charges have been fixed since they were legislated in 2008, as follows:

•£500 for domestic dwellings or buildings and building units ancillary to dwellings

•£1,000 in any other case

However, the consultation paper noted that local authorities have rarely, if ever, used these powers in the 16 years that the regulations have been in force.

In the future, the Scottish Government wants to ensure that any penalty charges payable are fair and proportionate, and to ensure that their levels act as a sufficient deterrent to any breach of the regulations. As such, the consultation sought feedback on what the appropriate level of penalty charges should be going forward, and views on the proposal to review the penalty charge level within two years of the new regulations coming into force to ensure they remain appropriate.

Appropriate Level of Penalty Charges

Q5. What are your views on the appropriate level of penalty charges under the new regulations going forward?

A range of views were expressed by respondents in relation to this proposal. Some were strongly supportive of penalty charges and increasing these in some or all circumstances. Others were against or ambivalent about the prospect of increasing penalty charge levels. Some were against the use of penalty charges at all (typically individuals). Mixed opinions were also expressed by the same respondents.

Generally, respondents did not specify the exact amounts they thought the penalty charges should be set at/increased to. While a few suggested they should be higher than the current level, others simply advised that the levels needed to be sufficiently high enough to act as an effective deterrent.

Sector Specific Penalty Levels

Some respondents (including organisations and individuals) highlighted a few specific sectors where they felt differential or higher penalty charge levels should apply. These included construction companies and new-build developers; private sector landlords; non-domestic buildings; and repeat offenders. This would reflect the increased responsibilities that commercial organisations have to consumers, the increased knowledge that these organisations should have regarding the system, and the increased significance for non-compliance among those commissioning a large number of EPCs. It was also felt that the current penalty rates were not a sufficient deterrent for poor practice:

“We would further recommend higher penalty charges for new build domestic properties, private sector landlords, and all non-domestic buildings in the case of repeat offences. We make this recommendation to address poor practice amongst developers, unscrupulous practices by private sector landlords, and because we do not believe that the penalties are sufficient to be a deterrent for developers of domestic properties and owners and developers of non-domestic buildings. We do not have a strong view on how high these penalties should be, other than we believe they would need to be substantially higher to act as a deterrent.” (Energy Focused Organisation)

One organisation also suggested that there was not enough of a difference between domestic and non-domestic penalty levels. They suggested that, while penalties should be increased for both sectors, non-domestic penalties needed to be higher in order to ensure this was a sufficient deterrent to taking shortcuts or not meeting the requirements.

Inflationary Increase

Several respondents suggested that an inflationary increase in the penalty levels would be a sensible or reasonable starting point. This is in line with the recommendations for the system in England and Wales and was therefore considered acceptable for Scotland as well.

One organisation also suggested that whatever level the penalty charges are set at, it should be subject to annual adjustments in line with inflation to ensure they remain appropriate.

No Change Required

A few respondents suggested that it may be more sensible to retain the current penalty levels and not introduce an increase. This was generally due to the fact that the current rates in Scotland are already above the increased rates proposed for England and Wales, and because the penalties have rarely/never been imposed. As such, it was felt there was little value in increasing the charges, particularly as this would incur some administrative costs.

One organisation suggested that Scottish penalties should be maintained at least until England and Wales had risen to the same level. However, this was contradicted by another organisation who argued that the English and Welsh penalties were too low and that the Scottish system should impose higher levels.

A few respondents also felt that discussion of penalty rates was not required due to the fact that no penalties had been imposed in the past. One individual suggested this meant there was no justification for changing the penalty levels.

Monitoring and Enforcement Required

It was perceived that, in addition to setting effective penalty levels, the Scottish Government also needed to consider ways to strengthen the monitoring and enforcement of EPC regulations. Without this, it was felt that penalty charges would be ineffective/redundant. One individual suggested that a central team should be responsible for this as the current situation where local authorities have rarely/never issued fines meant that people were emboldened to take risks:

“As long as they're actively monitored and enforced, otherwise it's a pointless exercise. The only way I see that happening [is] if this is monitored and carried out proactively by a team within the Scottish Government, and not local councils, who do not have the funds/means to do it… It should disincentivise the current attitude of people taking the risk since no one is getting fined.” (Individual)

Other Comments

A few other comments were provided which either supported the use of penalty charges, caveated support, or highlighted challenges that may be experienced (with each being mentioned by just one or two respondents each). These included that:

•Penalty charges need to exceed the cost of carrying out either a domestic or non-domestic EPC in person, and cover the cost of any enforcement action

•Penalty charges should be percentage based rather than a fixed a fee, otherwise it does not provide an equitable deterrent and will more severely impact some

•Challenges may be raised where people have little faith in the EPC due to them being a visual check only and potentially inaccurate

•Raising the bar on entry for EPC assessors would also help to control and improve quality

Opposition to Penalty Charges

Some individuals were either against the use of penalty charges at all or were concerned that the penalty levels were currently too high/would be set too high. One individual described the maximum proposed fine for non-domestic properties as “obscene”. Meanwhile, another felt the levels were too high, particularly when reflecting on the shorter lifespan of the EPC (from 10 years to five years validity) and the risk that people may not realise their certificates had expired.

One individual also suggested that AOs already had powers to address inaccurate EPCs and so they were best placed to manage compliance.

Review of Penalty Charges Within Two Years

Q6. To what extent do you support or oppose the Scottish Government’s intention to review the level of penalty charges within two years of the new regulations coming into force, to ensure they remain appropriate?

Of the 25 respondents who rated their level of support or opposition at this question, 16 (64%) supported the proposal to review the level of penalty charges within two years of the new regulations coming into force. Conversely, five respondents (20%) opposed this, all of whom were individuals.

Reasons for Support

Feedback at this question was largely consistent with that provided at earlier questions, particularly in relation to reviews of the lodgement fee and the on-site audit and inspection function, and in relation to the levels of penalty charges.

Those who supported the proposal to review the level of penalty charges within two years felt this was appropriate and sensible. Respondents were generally supportive of the use of reviews, particularly to test changes in the system. It was also felt that a review would offer a useful opportunity to:

•Assess whether the penalty charges were set at a fair, appropriate and effective level

•Determine whether the correct balance had been stuck between lodgement fees and penalty charges

•Look at both penalty charges and the on-site audit and inspection functions to determine if any changes are required to support improvement

A few noted that the timescale proposed was sufficient to ensure that the necessary changes had been implemented and the system established. It was felt that this would allow sufficient time for testing and evaluation of the changes, to consider effective penalty levels for different sectors, and for the review to be able to accurately judge effectiveness.

Again, a few respondents advocated for more regular reviews. This would provide more long-term monitoring to ensure the penalty charges remain appropriate and effective in ensuring compliance. It would also allow for inflationary adjustments, which a few respondents felt was necessary:

“Regular reviews and considerations towards inflationary adjustments, and any increase in EPC regulation breaches, would be a reasonable course of action in keeping the penalty charges proportionate over the medium and long term.” (Built Environment Focused Organisation)

A few individuals felt the review would be useful to assess how many people had been fined and whether that was reasonable, and to identify what proportion had and had not paid the penalty change.

Caveats to Support

Enforcement issues were also raised again at this question. One organisation stressed that it would be important to ensure that the EPC regulations were enforced, otherwise the penalty charges would be ineffective. Meanwhile, another was concerned that local authorities were not sufficiently resourced to undertake effective enforcement of the EPC regulations, meaning this could result in a postcode lottery effect:

“In reviewing the level of penalty charges, it’s also important to consider…the enforcement of existing EPC regulations. Without this, higher penalty charges will be redundant.” (Organisation, Real Estate Focused Organisation)

“One consideration that the Scottish Government should consider on an ongoing basis is whether Scottish local authorities have sufficient resources to [enforce] standards. Failure to occupy enforcement across Scotland could result in a postcode lottery of enforcement.” (Real Estate Focused Organisation)

Reasons for Opposing

Of the five individuals who opposed the proposal to review the penalty charges within two years, only three provided further details about their reasons for opposition. One further individual, who answered ‘don’t know’ at the closed element of this question, also expressed opposition in the comments.

Two individuals again argued that there should be no penalty charges. Another felt it was difficult to stay abreast of legislation, particularly when they perceived that the property sector was already over-regulated. They argued that:

“Moving the goal posts every two years adds to that burden.” (Individual)

The final individual again questioned the validity of considering this topic due to the fact that penalty charges had never been applied in practice.

Feedback on Penalty Charges from the Workshops

The main issue raised by workshop attendees was the current lack of enforcement. It was suggested by attendees across all three events that local authorities currently do not impose penalty charges. Therefore, there was no effective enforcement of the requirements or disincentives for non-compliance. As such, it was suggested that discussions around the penalty charge level and a review were irrelevant.

There was a suggestion from one attendee that, until enforcement was being actively pursued, the penalty charge level should remain at its current level as there was no benchmark regarding costs or effectiveness. However, it was acknowledged that, once enforcement was implemented the penalty charge levels may not be high enough to cover the cost of enforcement.

Attendees in one workshop event suggested that the enforcement function should be removed from local authorities and placed with a central body (either a local authority body or central government). However, the key issue was to ensure that enforcement happens.

In terms of the timescales for undertaking a review, this was only discussed in one workshop event. However, attendees were generally in agreement that this should be two years after the regulations are implemented. It was felt that one year was not a sufficient time period, while any longer than two years would be too long to wait for any necessary changes.

Other issues related to penalty charges, raised by one respondent each, included:

•Establishing a mechanism to increase penalties by inflation

•Linking the penalty charge to the transaction value as current levels do not encourage compliance

•How enforcement organisations would be held accountable, and who would police the police?

•That some local authority properties do not have EPCs and it may be unrealistic to expect them to penalise themselves

Source page 6

Written Responses

Q7. Please provide any other commentary or observations you have on funding of the regulatory functions through lodgement fees, proposed in this consultation.

Overall, 18 respondents provided additional comments at this question, including nine organisations and nine individuals. Despite the focus of the question being on the funding of the regulatory functions, many of the comments discussed EPCs more broadly. Respondents typically focused on the quality of EPCs, enforcement of the regulations, and other practical concerns.

Low Payment Rates

Several respondents (including organisations and individuals) discussed the perceived low payments made to assessors and/or low charge rates for EPC lodgement and auditing. This was said to be challenging and restrictive in certain cases where the time input required from the assessor exceeded that covered by the charge rate. In particular, new build EPCs which may be complex and require more intensive assessments; older buildings with complex internal layouts and non-standard rooms; and remote, rural and island areas which involve significant travel distances were all highlighted as challenging given the low charge rates.

In addition, it was suggested that the low charges meant it was difficult to conduct adequate auditing and on-site inspections/verifications. Indeed, one respondent highlighted that the calculations in the consultation document appeared to suggest only one on-site audit/verification could be conducted per day. However, due to the low payments, they felt that an assessor would need to conduct more than one per day in order to make a living. It was felt that the payment rates promoted quantity over quality. A few organisations suggested that the low payment levels, combined with the onerous audit sampling criteria for those issuing a small number of EPCs per year, created complexity which discouraged them from being AOs.

One organisation welcomed any measures that would generate more funding; however, they did not feel that owner-occupiers or social landlords should face higher costs or penalties:

“We are of the view that Approved Organisations do not receive sufficient payments to undertake full, detailed, audits of EPCs, and that the current (low) payments deter them from doing so. Therefore… there is a strong justification for measures which bring more funding into this pot. However, we do not believe that owner-occupiers, for whom selling and buying properties can be an immensely stressful process, should face additional costs or higher penalties, and nor should registered social landlords as this sector is already heavily regulated and many local authorities are struggling to manage their budgets and staff time.” (Energy Focused Organisation)

EPC Affordability

In addition to the concern above about avoiding rising costs for owner-occupiers and social landlords, another organisation, who was supportive of the proposals overall, was concerned about landlords and property agents. They suggested that increased charges should be avoided for landlords and their property agents due to the financial challenges they experience.

Also concerned about landlords, one individual suggested that fees had already been increased to accommodate the additional requirements of the RdSAP 10. As such, they were concerned that fees would need to be raised again to cover the higher lodgement fee. They noted that this fee increase, combined with the need to renew certificates more often (every five years rather than every 10 years) would place a greater burden on landlords’ operating costs. Ultimately, they felt this unfairly targeted this group rather than sharing the costs among all users of the EPC system.

One organisation raised concerns about the affordability of EPC assessments, particularly for low-income groups. They stressed the importance of ensuring that any cost or frequency increases should not create barriers to compliance with the EPC requirements. Further, they advised that lodgement fees and penalty charges needed to be considered in relation to the wider affordability of EPCs.

Value of EPCs

A few respondents were concerned about the perceived value of the EPC itself. Two specific issues were cited as undermining their value. Firstly, the series of assumptions that were involved in the assessment and certification rather than accurate and rigorous testing was flagged. Secondly, the use of out of date information to perform calculations was noted (e.g. pricing for energy and building modifications, heat source models and window types, etc.). It was felt that the current proposals did nothing to tackle this and would not, therefore, improve quality or accuracy:

“The standard of the EPC should be a concern to the government. It is currently a laughing stock in the industry for its inconsistency and omissions.” (Individual)

Quality of Assessors

Another issue, linked to the perceived value of EPCs but also a distinct and stand-alone concern, was the quality of the assessors. A few respondents stressed the need to ensure that assessors and others involved in delivering the EPC requirements are appropriately trained and skilled, meet the professional standards, and have the correct professional insurances.

Strengthening training and oversight for assessors was said to be necessary for a number of reasons. This included ensuring that EPCs are accurate and consistent from the outset, thus reducing the need for in-depth auditing and increasing confidence in EPC data. It was also important to ensure the robustness and consistency of on-site audits and inspections, and to ensure adequate coverage of different building types.

Similarly, one individual argued that the EPC database should be maintained, audited and populated by skilled and knowledgeable professionals. They also suggested that the processes of AOs could be linked to professional Institutes, which would ensure quality control and professional conduct. Again, this would need to be supported by funding and involve knowledgeable and experienced professionals in the process.

Other Issues

One organisation discussed the need and approach for more effective enforcement of existing EPC regulations. They suggested that enforcement should be undertaken by a central enforcement body with access to both the EPC database and the Scottish landlord register to identify breaches and issue fines. Any money raised through this could help to fund the new regulatory functions and be reinvested to improve education, compliance and further enforcement. This respondent also suggested that additional funding could be generated by charging companies and commercial users for access to data on the EPC register:

“Additionally, funding could be generated by charging companies and commercial users for access to the EPC register data, which is widely used across the property industry. This would create a fair and practical revenue stream.” (Real Estate Focused Organisation)

Other issues (mentioned by one respondent each) are outlined below:

•No other options were available in relation to funding the regulatory functions

•The commitment to liaise with the UK Government on shared technical infrastructure and practice, and to monitor the approaches and experiences across the EU was seen as helpful

•The Scottish Government should provide a full statement on costs with a detailed breakdown in order to justify any changes

•Air-Conditioning Inspection Reports and certificates should be hosted on the central registry to improve accessibility and transparency

•Explore ways to maximise the application of Display Energy Certificates

•Provide assurance that no alternative lodgement facilities exist, for example, assessors making direct lodgements to the register (although another respondent advocated for this type of alternative approach at an earlier question in the consultation)

Negative Feedback and Concerns

A few respondents provided or reiterated negative perceptions. Each issue was mentioned by one respondent each, as follows:

•That increased fees and penalty charges were not expected to raise the quality of EPCs

•That the on-site audit and inspection function was excessive and impractical, and would add significant costs for implementation

•One individual who was against all the proposals advised the Scottish Government to “live within your means”

Workshop Events

Impact Assessment

What do you think the impact of our proposals in this consultation will have on various groups in Scotland?

Workshop event attendees were asked to consider any potential positive and negative impacts or unintended consequences of the proposals for various groups. This included impacts on people with protected characteristics, such as age (including children and older people); disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation. Comments were also welcomed on the impact for island and rural communities, socio-economic impacts, and data protection provision.

The only two groups discussed by attendees were those living in island, remote and rural areas, and those living with disabilities.

In relation to island, remote and rural areas, attendees urged the Scottish Government to consider costs and workforce capacity. For example, it was noted that higher costs apply for rural and island communities simply due to their location. In addition, the reduced validity period of EPCs (from 10 years to five years) will effectively double the workload, having a significant impact in areas with limited numbers of assessors.

It was also suggested that the EPC itself needed to reflect the differences that exist in unique landscapes and recognise that more traditional heat sources (such as wood burning stoves and peat) would continue to be used in island and remote rural areas.

One workshop attendee also stressed that the proposals needed to consider what was appropriate for those with disabilities to ensure they have better outcomes. No further detail was provided in relation to this view, however.

Other Comments

Workshop attendees also provided a small number of other comments, as follows:

•Low fees paid to AOs and assessors, with prices driven down by local authorities and housing associations looking for the cheapest contractors

•Consider using a map-based navigator for EPCs. Suggestions included linking this to existing map searches for planning and building consents on local authority websites, and/or accessing the assessments via Google Maps, with EPCs attached to properties. This would be an easy way for people to find their own EPCs, and act as a tool to avoid missed addresses or the use of wrong information

•Gaps in the capabilities of EPC were flagged, including a renewables lag, particularly for battery and solar, and in relation to airtightness and ventilation

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As highlighted at the outset, when interpreting the results it must be borne in mind that the findings reflect only the views of those who chose to respond to the consultation. Respondents were a self-selecting group, with a small number of responses received. Therefore, the findings should not be considered as statistically robust or representative of the views of the wider population.

Overall, the consultation responses showed that between half and two thirds of respondents who provided a rating at the closed questions supported each of the proposals:

•19 out of 28 respondents (68%) supported the use of a statutory fee levied on lodgement of EPCs to fund the new elements of the regulatory regime

•14 out of 28 respondents (50%) supported raising the statutory fees levied upon lodgement by £3.40 for both domestic and non-domestic EPCs

•17 out of 28 respondents (61%) supported a review of the lodgement fee level within two years of the new regulations coming into force

•16 out of 28 respondents (57%) supported reviewing the on-site audit and inspection function within two years

•16 out of 25 respondents (64%) supported reviewing the penalty charges within two years

At each question, most (although not always all) organisations were supportive or neutral, while individuals were more mixed between those who supported, opposed or were neutral about the proposals. As such, most of the opposition came from individuals rather than organisations.

Beyond the specific proposals, respondents also raised a number of issues which they felt needed to be addressed. Those mentioned repeatedly throughout the consultation responses, between different respondent groups, and across both the written and workshop event feedback included:

•The need to tackle the quality of assessments

•The need for more effective monitoring, enforcement and implementation of penalty charges

•Consideration of the introduction of fees to access the data held in the EPC Register, particularly where this is utilised for commercial purposes

Respondents were also generally mindful of the burdens that may be placed on consumers, and on social landlords in particular, as a result of the proposed changes. Considerations related to the practicalities of implementing some of the proposals were also highlighted, with key challenges noted for islands, remote and rural areas. As such, the consultation provided useful feedback which the Scottish Government should take into account when finalising the new regulations.

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1 RdSAP is the national methodology used to assess the energy performance of existing dwellings. RdSAP 10 represents an update to the previous version and includes several methodology changes. More information can be found on the BRE website.

2 Schemes are the English and Welsh equivalent of AOs in Scotland. These are assessor accreditation bodies.

3 CPIH stands for Consumer Prices Index including Owner Occupiers’ Housing costs. It is the UK’s leading measure of inflation.