Cost of living: impact on rural communities in Scotland

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

First Report of Session 2023–24

Author: Scottish Affairs Committee

Related inquiry: Cost of living: impact on rural communities in Scotland

Date Published: 24 January 2024

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Contents

1 Introduction

Recent cost of living rises

1. Households across Scotland and the rest of the UK have faced dramatic increases to the cost of living over the past two years, as the affordability of goods and services has decreased. Household energy and road fuel costs rose significantly following Russia’s invasion of Ukraine in February 2022, which caused gas prices to increase to record levels during that year. This event added to the economic aftershocks of the covid-19 pandemic, were considerable drivers behind the rise in the rate of inflation, which reached a 41-year high in October 2022 at 11.1% in the United Kingdom. Although the rate of inflation has since reduced, it remained at 3.9% as of November 2023. Food prices also rose by 29.3% in the two years to July 2023. By the end of 2023, food inflation in the UK decelerated to 6.7% in December, down from 7.8% in November, marking the lowest level in 18 months.

2. In addition to these pressures, many rural communities across Scotland already experience higher costs of living compared with urban areas due to their remoteness and rurality and are often reliant on electricity or alternative heat fuel sources such as heating oil or biomass. A report by the Scottish Government in 2021 estimated that the minimum cost of living in remote rural Scotland was between 15% to 30% higher than urban parts of the UK.1 This has been described as a “rural premium”, with rural poverty being a “hidden issue”.2 Rural and island Scotland often face more severe winters with lower temperatures compared to other parts of Scotland and the rest of the UK.3 A higher proportion of rural Scottish homes are also off the gas grid and are reliant on alternative fuel sources like heating oil or electricity.4 On top of this, rural populations generally experience higher transport and food costs compared to urban areas.5 The UK Government recognises that the impact of the rise in the cost of living is “more acute” in these areas.6

3. In response to these cost-of-living increases, the UK Government announced in winter 2022 an unprecedented package of financial support to assist households across the UK. Key financial measures included:

  • the Energy Price Guarantee, which caps the average annual domestic bill for households;
  • the Energy Bill Support Scheme, a £400 grant towards energy bills for households; and
  • targeted cost of living payments to those on certain benefits and tax credits.

4. The UK Government has said that “in addition to focusing on the most vulnerable in our society” its cost of living support packages “recognise the immediate needs faced by rural and remote communities, where issues with the affordability and availability of goods and services can be more acute”.7

Our inquiry

5. It was in this context that we launched our inquiry in December 2022 to examine the impact of the rising costs of living on rural populations across Scotland. We issued a call for written evidence which sought views on:

  • the particular challenges facing Scottish rural communities in relation to the cost of living compared with other areas of the UK;
  • to what extent recent UK Government cost of living support measures meet the needs of rural populations in Scotland;
  • whether UK Government cost of living support could be better tailored to meet the needs of rural communities in Scotland;
  • any further steps the UK Government could take to support Scottish rural communities in relation to the cost of living; and
  • how effectively the UK and Scottish governments have worked together to coordinate and provide support in relation to the cost of living for the people of Scotland.

6. We published 32 submissions to our inquiry, a full list of which can be found at the end of this report. We held five oral evidence sessions between February and September 2023, speaking to academics, charities and UK Government Ministers on issues across three broad themes: energy, food and transport. Despite several requests for attendance, this Committee wishes to put on record its sincere disappointment that no Scottish Government Minister was prepared to give oral evidence for this inquiry and face scrutiny from the Committee. We also want to put on record our frustration that the most recent request was accepted by Scottish Government Ministers and then withdrawn with very short notice. This has impacted the work of the Committee and the preparation of this report. We would like to thank all those who took the time to contribute written or oral evidence to this inquiry.

7. We also conducted an online survey for members of the public in July 2023, which sought peoples’ personal experiences of the rising cost of living. We received 127 responses in total. The responses are appended to this report. We would like to thank everyone who took part.

8. Finally, we visited the Isle of Arran in September 2023; we met with local businesses operating on the island and held a roundtable session on the cost of living with members of the public.8 We are grateful to all we met, who helped make our visit so informative.

2 Defining and measuring rural Scotland

9. During our inquiry, witnesses discussed how we might define “rural” communities in Scotland, and how these populations were currently measured and considered by government in relation to cost of living support. The definition of a rural area is different throughout the UK. The UK Government has a definition of rural areas only in relation to England, and defines areas as rural if they fall outside of settlements with more than 10,000 residents. In Scotland, the Scottish Government defines rural areas as settlements with fewer than 3,000 people.9

10. We heard there are different gradations of “rural”. “Remote rural” areas in Scotland are defined by the Scottish Government as those in which people are required to take at least a 30-minute journey to reach a settlement with a population of 10,000 or more. Meanwhile, “accessible rural” areas are defined by the Scottish Government as those requiring a journey time of less than 30 minutes. In addition, some parts of Scotland are considered to be “very remote” areas. These are defined by the Scottish Government as requiring a drive time of over 60 minutes to reach a settlement of 10,000 people or more.10 Seventeen percent of Scotland’s population live in rural locations–with six percent in remote rural and 11 percent in accessible rural locations.11 Rural areas tend to have a lower proportion of people aged 16 to 44, and a higher proportion of people aged 45 and over, compared with the rest of Scotland.12

11. The UK Government recognises these different gradations of rurality in Scotland and has noted its relevance to the impact of the rising costs of living. It stated that “given the diversity of Scotland, its geography, economy and culture, the term Scottish rural communities encompasses a wide range of communities and lived experiences” and it is “arguably the prevalence and number of remote rural communities” that distinguishes rural Scotland from the rest of the UK.13 Professor van Woerden of the University of the Highlands and Islands explained that it is important to be specific when collecting data on rural households in Scotland due to the difference in deprivation levels seen across the distribution. He said:

As you go into semi-rural, you tend to have quite a lot of affluence. Then as you get more and more rural, you tend to get higher and higher levels of deprivation of different types, and increased costs. The difficulty is that when you make a simplistic split between rural and urban, urban can look much better than you would expect. The key is the sophistication to look at different degrees of rurality in any metric that is being assessed. It is very clear normally in a lot of metrics that as you move to very remote and rural areas, costs go up and average incomes tend to be lower.14

12. The Royal Society of Edinburgh said there was a “general scarcity of detailed data” on remote rural Scotland, which was “essential to fully comprehend the complex picture of the challenges remote rural areas in Scotland are grappling with”.15 We heard how having better data on rural populations would also allow for a more targeted system of cost of living support to be delivered in the future.16 We also heard that better data sharing between the UK and Scottish Governments could be part of the solution to lack of data.17 We were keen to raise these data sharing concerns with both Governments, but are unable to provide a conclusive answer due to the Scottish Government’s absence from oral evidence sessions and this issue not being raised with UK Government ministers when they appeared.

13. Some witnesses also questioned the suitability of the metrics used to measure poverty across the UK. Poverty is commonly determined by income (sometimes taking housing costs into account as well), but there is no single agreed-upon definition. Ruth Boyle of the Poverty Alliance told us that current poverty metrics were “not overly applicable to rural areas”, because they tended to focus on measurements such as income and place rather than outgoings, which meant they did “not take into account the particular issues with poverty in rural areas that stem from there being a higher cost of living in those areas”.18 The UK Government said that poverty and deprivation levels were generally lower in rural areas of Scotland compared with urban areas, but acknowledged that “poverty indicators do not always take into consideration the diverse experience of those in rural Scotland, and the compounding impacts of the cost of living”.19

14. The term “rural communities” encompasses a broad gradation of populations across Scotland and this results in a varied experience for people living in rural areas. Successful cost of living interventions need to account for and be tailored towards that variable experience.

15. Whilst accepting the UK Government were keen to get support out to assist people as quickly as possible, the UK Government should carry out a review to assess the effectiveness and value for money of cost-of-living support provided by the UK Government during winter 2022/23. This review should evaluate:

a) How effectively this support met the needs of Scottish rural households;

b) How the UK Government could have better targeted the support; and

c) Whether all levels of Government have sufficient data and administrative systems to deliver more effective, targeted cost of living support in the future, if required.

The UK Government should write to us with the findings of this review once completed.

3 Rising costs of energy

16. Wholesale energy prices increased dramatically globally and in the UK from mid-2021 and then again following Russia’s invasion of Ukraine in February 2022. In that month, Ofgem, the energy industry regulator for Great Britain, announced that the energy price cap would increase in April 2022 from its earlier annual equivalent of £1,277 per year to £1,971; an increase of 54%.20 In August 2022, Ofgem announced an increase in the cap for the fourth quarter of 2022 of £3,549; an 80% increase on the previous quarter.21 The introduction of the Energy Price Guarantee by the UK Government set maximum unit energy prices below the level of the Ofgem cap in winter 2022/23, reducing the extent of price increases for domestic customers. The House of Commons Library has explained that:

Under the October-December 2023 direct debit price cap the average annual bill for typical gas and electricity consumption is £1,834. This is below the £2,380 level under the Energy Price Guarantee from October 2022 to June 2023, but 51% higher than in Winter 2021/22. The price cap will increase by 5% to £1,928 in the first quarter of 2024 and is expected to fall back to around £1,800 for the rest of 2024.22

However, we also note that these typical costs do not always apply to rural households in Scotland.

17. While nearly all households across the UK have experienced sharp increases in their energy bills over the past two years, we heard that rural populations have been particularly impacted because of compounding vulnerabilities, which include a higher proportion of off-gas grid households, less energy efficient homes and higher energy usage.23 During our inquiry we have considered the level of financial support delivered by the UK Government to all households in support of their energy bills since September 2022, and the extent to which it meets the requirements of remote rural communities in Scotland.

18. The Committee also notes that the Scottish Government holds responsibility for elements impacting the cost of living in rural areas such as energy efficiency with support through ‘Area Based Schemes’ where the Scottish Government spent less than half of its allocated budget in the last financial year.

Particular energy challenges for rural populations

19. It is estimated that around 19.1% of households across Scotland are not connected to the gas grid, compared with 15.1% across the whole of Great Britain.24 However, this number becomes much higher in rural areas in Scotland (see Table 1), while the Orkney Islands and Shetland Islands have no gas-grid coverage at all. As mentioned in Chapter 1, this means many rural Scottish households are dependent on alternative fuels like heating oil, liquified petroleum gas and electricity for storage heaters, as well as solid fuels like wood and coal.25 Prices for these alternative fuels are not regulated in the same way as gas and electricity prices and are generally more volatile and often influenced by conditions attached, such as minimum purchase requirements and a limited number of suppliers. This meant that users were eligible for the Energy Bill Support Scheme, a bespoke Alternative Fuel Payment Scheme, on top of more general support for vulnerable groups, such as pensioners and welfare claimants. The UK Government has stated that gas grid access can be “a significant determinant in the required cost of heating a home to a satisfactory temperature”.26 In October 2020, the average price of heating oil was just over forty-four pence per litre. The average price of heating oil rose throughout most of 2021, reaching nearly sixty pence per litre in October of that year. Prices jumped again after Russia’s invasion of Ukraine in February 2022, peaking at 99 pence per litre that June. In mid-September 2023, prices averaged just under 75 pence per litre.27 Witnesses to our inquiry told how increasing prices for alternative fuels had caused many rural households in Scotland to face “spiralling costs”.28

Table 1: Local authorities in Scotland with the largest share of households not connected to the gas grid (2021)

Local authority

Percentage of households not connected to the gas grid

Argyll and Bute

56%

Highland

61%

Na h-Eileanan Siar

88%

Orkney Islands

100%

Shetland Islands

100%

Source: https://www.gov.uk/government/statistics/sub-national-estimates-of-households-not-connected-to-the-gas-network

20. A number of submissions highlighted that the need for energy for heating is often greater in many rural areas (especially in the north of Scotland) due to the harsher climate.29 Scottish Rural Action explained how “rural and island Scotland has a challenging maritime climate with wind, rain and cold temperatures”.30 Comhairle nan Eilean Siar (the Western Isles Council) told us “in the islands in particular, winters are typified by high winds rather than very low temperatures, but winds can add greatly to the energy required to keep a house warm”.31 Others observed that those living with a disability or particular health condition often also have additional requirements which involve greater energy consumption, contributing to disproportionately high energy costs.32

21. Those living in remote rural areas are more likely to be considered as living in fuel poverty compared to those in other rural or urban parts of Scotland, with this becoming even more likely for those not connected to the gas grid.33 Energy policy is reserved to the UK Government. A variety of measures—reserved and devolved—could be used to address fuel poverty. Fuel poverty is defined and measured differently in different parts of the UK. Scotland’s Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 defines households in fuel poverty as those required to spend more than 10% of their net income on fuel needs once housing costs have been deducted, and where remaining household income is not enough to maintain an acceptable standard of living. The Act provided that this remaining net income required “to maintain an acceptable standard of living” be assessed slightly differently for households in remote rural areas, remote small towns and island areas, to reflect their higher costs.34 The Scottish Government has set a target of no more than 5% of households in Scotland living in fuel poverty by 2040.

Figure 1: Percentage of households in Scotland in fuel poverty

Image is a line graph showing percentage of households in Scotland in fuel poverty, between 2016 and 2021, with the Scottish Government’s target of 5% by 2040 also represented.

Source: Scottish Government, Scottish House Condition Survey

Note: The data set used in figure 1 is not complete, as it does not include data for 2020.

22. In 2019, before the recent significant energy price increases took place, the average rate of fuel poverty in Scotland was 24%, using the Scottish Government definition. However, this rate was much higher in a number of local authorities covering large parts of rural Scotland: Na h-Eileanan Siar (40%), Highland (33%), Argyll and Bute (32%), Moray (32%), Shetland Islands (31%) and Orkney Islands (31%).35 More recent Scottish Government modelling has estimated that the rate of fuel poverty was expected to increase to 39% across Scotland by April 2023 (when the Energy Price Guarantee increased), despite UK Government cost of living financial support measures.36 However, in remote rural areas, it projected that the fuel poverty rate would reach 57% by April 2023.37 The Royal Society of Edinburgh described the discrepancy between the national figure and those for remote rural communities as “stark”.38

23. Respondents to our survey shared their own experiences of rising energy prices across rural Scotland too, with energy being the area in which most respondents said the cost of living crisis had affected them the most:

Figure 2: Selected survey responses

Image is a selection of three quotes showing challenging lived experience of the rising cost of energy in rural Scotland.

Energy support provided by UK Government

24. As the rise in living costs and the rate of inflation became more acute over the course of 2021 and 2022, the UK Government announced substantial packages of financial support for households across the UK to help with rising household costs. The Office of Budget Responsibility (OBR) calculated in March 2023 that its full range of cost-of-living measures amounted to £78.2 billion in spending across 2022–23 and 2023–24.39 The UK Government has said it is providing £94 billion in financial support across 2022–2023 and 2023–2024.40 UK Government support to households which apply across Scotland in relation to energy bills has included:

  • The Energy Price Guarantee (EPG), which places a cap on maximum unit energy costs for domestic consumers connected to the grid. The EPG was originally set at a level equivalent to an annual bill of £2,500 for a “typical” household for two years from October 2022 to September 2024.41 It was later changed to £2,500 for the first nine months followed by an increase to £3,000 for the following nine months, and is due to run until March 2024. The UK Government said this measure would have saved a typical household in Scotland around £900 between October 2022 and March 2023.42 The OBR forecast that the scheme would cost the UK Government £27 billion over its lifetime.43
  • Energy Bill Support Scheme, which provided a £400 non-repayable discount to households to help with energy bills over winter 2022–2023. It applied automatically to all those with a domestic electricity connection in Great Britain. Customers without a domestic energy connection could apply manually via the Energy Bill Support Scheme Alternative Fund.
  • Alternative Fuel Payment, a one-off payment last winter for households not eligible for the EPG, which was originally to be £100, but later increased to £200. For most customers not on the gas grid this payment was made automatically through a credit to electricity bills, but others (estimated to be less than 15% of those eligible) were required to apply manually.44

25. Data published by the Department for Energy Security and Net Zero in June 2023 showed that 12,100 applications had been made across Scotland to the Energy Bill Support Scheme Alternative Fund, of which 71% had been approved and paid. 28% of applications had been cancelled or rejected, while 0.8% were either still awaiting payment or under local authority hold.45 Speaking to us in September 2023, John Lamont MP, Parliamentary Under Secretary of State at the Scotland Office, said UK Government cost of living interventions had “lessened the hit that many households in Scotland and across the UK would have faced” last winter, and that without UK Government support, “the difficulties would be far worse”.46

26. Scottish Government measures have also supported households in Scotland with energy bills. For example, the Winter Heating Payment, which was £50 in 2022/23, is paid annually to those on qualifying low-income benefits.47 This was referenced to us in correspondence from Mairi Gougeon MSP, Scottish Government Cabinet Secretary for Rural Affairs, Land Reform and Islands.48 This one off £50 from Scottish Government diverges from the UK Government’s Cold Weather Payment of £25 for each 7-day period of very cold weather between 1 November 2023 and 31 March 2024, if the average temperature in your area is recorded as, or forecast to be, zero degrees Celsius or below over 7 consecutive days. Whilst this does open support up to more households, concerns have been highlighted that this means people in very cold areas will get less money than they would have through the UK scheme which did not limit the number of times the £25 payment could be made between November and March.

Responses to UK Government energy support

27. People we heard from generally welcomed the financial support provided to households by the UK Government, which “lessened the impact of increased living costs on individuals, businesses and communities”.49 However, many respondents felt the overall amount of money announced did not fairly reflect the higher household energy costs borne by rural and island communities. Comhairle nan Eilean Siar (The Western Isles Council) stated that the £200 Alternative Fuel Payment was “not sufficient for Outer Hebrides residents, suffering from low incomes, high prices, inefficient homes and a colder climate”.50 The Royal Society of Edinburgh similarly said payments did not account for the variation in energy usage between rural and urban households and “issues such as poorer quality insulation and higher prevalence of inclement weather conditions, and the costs incurred with having limited access to the grid in rural areas”.51 Scottish Land and Estates welcomed the UK Government’s later announcement of a doubling of the Alternative Fuel Payment from £100 to £200, but said it served to “highlight a well-intentioned policy which was clearly not “rural-proofed””.52

Design and delivery of support

28. Some of those we heard from felt that the UK Government’s financial support measures could also have been better tailored or targeted to meet the needs of rural communities in Scotland. Frazer Scott of Energy Action Scotland described the energy support as “universal, flat, unfocused and not targeted. At best it has been expedient rather than excellent”.53 Christians Against Poverty similarly called it “a missed opportunity for more tailored and targeted support”.54 Chris Birt from the Joseph Rowntree Foundation said the various schemes’ “failure in design is that we are currently often creating systems for the administrative ease of the services delivering them, rather than in consultation with and on behalf of the people we are trying to support”.55

29. Inclusion Scotland told us that the replacement of previous Cold Weather Payments with the Scottish Government’s new Winter Heating Payment “may leave some worse off”.56 Ruth Boyle from the Poverty Alliance said that whilst simplification to the system was welcome, “the fact is that some households are getting less money at a time when they need even more in order to make ends meet” due to the changes.57 The Poverty and Inequality Commission said that whilst the increased scope of those eligible to the scheme was welcome, there was concern that it still “resulted in rural households missing out by getting less during multiple cold winter spells”.58

30. However, in response to suggestions that the UK Government should have better targeted its support last winter, Professor Bell from the Royal Society of Edinburgh argued that:

Although there is a strong case for doing that, once you go down that route, you can end up with policies that become very complicated, so I suppose the UK Government would argue, “let’s just keep it simple; let’s try to be uniform,” but that creates losers as well as those who may have particularly benefited from, say, the energy support schemes.59

31. We have also heard evidence that the delivery of measures has been slow in some cases, which has had a negative impact on those whom the support was intended to help. Comhairle nan Eilean Siar (The Western Isles Council) reported that, as late as February 2023, households were still waiting on their £200 Alternative Fuel Payments. This experience was echoed by The Poverty and Inequality Commission who stated that the delay in the opening of the Energy Bill Support Scheme Alternative Fund for applications from off-grid users from January to February 2023 caused “further hardship” for households.60 Inclusion Scotland welcomed the £200 Alternative Fuels support but said the delay in delivery might have meant it was “too little, too late”.61 The Poverty and Inequality Commission also noted concerns about the “complexity” of applying for the scheme.

32. The UK Government said it had engaged “with public sector bodies, civil society groups and community organisations” to understand the expectations of rural Scottish communities and “to ensure that cost of living support measures are designed to adequately address these needs”.62 When asked about future energy support for those facing a “rural premium” in response to some of the comments received, Amanda Solloway MP, Parliamentary Under Secretary of State at the Department for Energy Security and Net Zero, told us:

we have a challenge in what we are going to do long term. […] I am also mindful that what we need to do is to make sure that if anybody has a situation personally that impacts on their need for additional energy, then we need to be thinking about that as well. An example of that would be somebody who, for example, has a disabled child at home or needs some life support. You have the start point where we had to do the intervention and then you have the end point, which is where I would like to get to fair and reasonable support for that group of people. To do that, you will appreciate that that will take quite a while. It is not just a quick fix.63

33. The unprecedented package of financial support delivered to households across Great Britain by the UK Government last winter was welcome and helped to mitigate the full impact of the dramatic energy price increases experienced during the period. However, the Committee heard that the blanket level of energy support provided was not sufficiently “rural-proofed”–it did not account for additional costs required for many households in rural Scotland. Energy schemes prioritised administrative ease to accelerate funds getting to people over specific targeting. Whilst understandable in the context of the immediate crisis, a system of support more tailored towards the acute pressures faced by rural communities would have been more effective. In addition, many off-grid users reported unacceptably long waits to receive payments. Support measures need to ensure parity between households connected to the grid and those reliant on alternative fuels.

Improving home energy efficiency

34. A further challenge for many rural homes in Scotland, but one that is important in addressing high energy costs and reducing vulnerability to fuel poverty in the long term, is improving the energy efficiency of housing stock. In its 2021 Fuel Poverty Strategy, the Scottish Government identified energy inefficient housing as one of its four “drivers of fuel poverty”.64 During our inquiry we heard that the characteristics of homes associated with lower energy efficiency are “disproportionately represented in rural areas”.65 Comhairle na Eilean Siar (The Western Isles Council) explained that houses on islands were “generally larger, older, poorly insulated”, being “difficult to adapt for energy efficiency, therefore, higher heat loss”, a point also made by NFU Scotland regarding rural dwellings.66 Barriers to upgrading energy efficiency in houses in remote areas include: “higher costs being applied due to remoteness, lack of qualified local tradespeople, a greater number of properties which require bespoke measures, cost more to improve, and are often isolated”, according to the Scottish Countryside Alliance.67 Professor van Woerden of the University of Highlands and Islands said that there was also anecdotal evidence of:

a lack of expertise in remote and rural areas when it comes to insulation and insulation techniques in the building trade community, if that makes sense. There is also a marginal cost. If you have four houses to do in a day that are 20, 30 or 50 miles apart, it is not as cost-effective or profitable for a small company as it is with houses that are five minutes apart.68

35. Some witnesses discussed the Scottish Government’s home energy efficiency schemes - for example, the Home Energy Efficiency Programmes for Scotland area-based schemes (delivered by local councils) or Warmer Homes Scotland. Frazer Scott from Energy Action Scotland said there had been a “slowdown in the rate at which homes have seen improvements to their energy efficiency” over the last few years.69 When asked about a reported underspend for the Home Energy Efficiency Programmes for Scotland area-based schemes, Frazer Scott described the consequence as being that “tens of thousands of households” were not “better prepared and better shielded from high energy costs” when they otherwise might have been.70 Regarding delivery of home energy efficiency schemes, he said it was “a chronic problem across the UK” but that in Scotland “we certainly lack a supply chain that is able to deliver the level of improvements into people’s homes”.71 Chris Birt of the Joseph Rowntree Foundation hoped the recent energy price crisis would “spark a bit of an acceleration of retrofitting existing homes and ensuring that new homes that are built do not have these long-term problems baked into them”.72

36. One way to help reduce energy costs in the long-term is to improve the energy efficiency of homes. The challenge of retrofitting and insulating homes, in terms of cost, time and practicality, are particularly acute for rural areas. Rural Scottish households are therefore facing more barriers to accessing home energy efficiency schemes, despite being most in-need of them. Addressing this challenge will be key to reducing the rural premium for these Scottish consumers.

37. The Scottish Government’s Energy Efficiency (Area-Based) Scheme uses ring-fenced funds which require approval, but which we heard was causing concern. Witnesses were unable to provide reasons for the Scottish Government’s underspend of this scheme.

38. We hope to hear from the Scottish Government on how they will respond and address these concerns.

4 Food insecurity and food poverty

39. Food prices are another area of household expenditure that has risen sharply during the cost of living crisis. The rate of food price inflation in the twelve-month period up to March 2023 was 19.2%, the highest it had been for 45 years. Analysis by the Office for National Statistics shows that the impact of price rises was particularly severe for some of the lowest-cost household essentials such as pasta, tea and bread.73 Inflation for food and non-alcoholic beverages continued to ease to 9.2% in the year to November 2023.

40. Food—as well as other essentials—has always been more expensive in remote rural Scotland compared to urban areas. This also constitutes part of the ‘rural premium’ - namely, the higher prices that communities in remote rural areas have to pay, relative to urban areas, to access the same goods and services. The evidence we received during this inquiry illustrates this to be the case now more than at any other time in recent years.74 Respondents to our survey told us that food was second only to energy as the area in which the cost of living crisis has affected them most (energy 62.6%, food 29.6%, transport 7.8%).75 Meanwhile, on our recent visit to the Isle of Arran, where we spoke to local residents about the cost of living, we clearly heard of higher food prices compared to mainland shops and supermarkets, as well as cases of food poverty.76

Defining food insecurity and food poverty

41. Despite what might be considered an urgent and increasingly prevalent problem, there is no agreed definition of food insecurity or food poverty.77According to the House of Commons Library, a household is food insecure when the ability to acquire “adequate quality or sufficient quantity of food in socially acceptable ways” cannot be guaranteed.78 Food insecurity is associated with overall poor diet quality (lower nutrient intake and higher intakes of processed foods) and inconsistent dietary patterns, anxiety, depression, and risks for poor long-term health.79 A survey by the Food Foundation in January 2023 found that 9.3 million UK adults experienced food insecurity, 17.7% of households compared to 8.8% in January 2022. Among those receiving Universal Credit, 49% experienced food insecurity.80

The challenges faced in remote rural Scotland

A rural premium for food

42. Across all aspects of our inquiry, the ‘rural premium’ has been a constant theme. This has been particularly clear in the context of food. Professor Mary Brennan, Chair of Food Marketing and Society at the University of Edinburgh Business School (and Chair of the Scottish Food Coalition), told us there is a particular problem in remote rural areas because local shops or smaller format supermarkets “are offering restricted choice, more expensive items, less options in value products, and that is then driving people to make difficult choices morally for themselves”.81 Professor Brennan told us there is unequal access to affordable food even between remote rural areas and there is a limit to how much people can buy in bulk, how much they can freeze and how much they can store.82 In addition, we heard how some online companies charge extra to deliver to remote rural locations and regular long journeys to go to larger food shops mounts up over time.83

43. The Experts by Experience Panel of the Poverty and Inequality Commission identified research which showed that a basket of 10 common household goods available in a local store was £7.05 more expensive compared to a supermarket five miles away.84 The Scottish Government has similarly estimated that weekly food is 13% more costly for island inhabitants in the north of Scotland, with disparities further enhanced due to higher delivery charges for products.85 This, as one anonymised submission told us, is due to longer distances and the need to use ferries.86

Factors impacting food affordability

44. There are a number of reasons why remote rural communities are struggling with the increasing price of food. Professor Brennan said:

the cost of living crisis has come in off the back of other issues that have resulted in budgets being constrained at local authorities, austerity measures, and individual households having less financial buffers and backing. That has affected their capacity to react and respond and cope with the cost of living crisis. Of course, it has also come off the back of the incredible difficulties that some households suffered through Covid-19. It is a perfect storm.87

45. John Dickie, Director of the Child Poverty Action Group in Scotland, said that “incomes just are not adequate to meet the costs that families face”.88 He added that “cuts to the value of social security” had resulted in an “extraordinary explosion in food insecurity and the extraordinary explosion in demand for food banks and other forms of charitable food aid”.89

Groups impacted by higher food prices

46. As the Trussell Trust states in its recent report, Hunger in Scotland, there is no ‘typical’ person who faces hunger.90 However, we have heard of several groups, who, if living in a low-income household, can be particularly impacted in different ways.

People with disabilities

47. Evidence we received highlighted that people with disabilities can be particularly affected by the rising cost of living. Due to the unaffordability of private transport and limited availability or inaccessibility of public transport, people with disabilities are more likely to be dependent on smaller, local shops and therefore will pay a much higher price for food.91 According to the Resolution Foundation, 31% of disabled people say they have had to reduce their expenditure on food, compared to 18% of the non-disabled population, and 20% of disabled people are now experiencing moderate or severe food insecurity, up from 8% before the pandemic.92

48. Inclusion Scotland and the Trussell Trust Scotland told us that a disproportionate number of those accessing foodbanks are disabled people or those who live in households with a disabled person. These forms of support are less available and less easy to access in remote rural areas, potentially leaving some without access to vital support.93 Cara Hilton, Senior Policy and Public Affairs Manager for the Trussell Trust in Scotland, told us: “the cost of living payments should reflect the poverty premium and the disability premium that people face”.94

Women and families

49. Evidence from the UK Women’s Budget Group shows that women are often the “shock absorbers” of poverty, tending to have the main responsibility for the purchase and preparation of food for their children and families and for the management of budgets in poor households. This role as “shock absorber”, their submission states, often comes alongside additional stress and anxiety, as well as cutting back food or going hungry.95

50. Cara Hilton told us that from her experience of who is using food banks, it used to be “predominantly single men […] but increasingly it is now single parents and families, especially families with three or more children”.96 Ms Hilton added that “families with three or more children” which account for “only about 7% in the general population” now receive “a quarter of all the food parcels that we are giving out at the moment” and one in four food parcels are now “going to a single-parent household”.97

Children

51. We heard of the impact of poor diet on children’s educational attainment. We note however that the Scottish Government pledged to introduce universal free school meals for all from August 2022, but this has not happened. The Scottish Government has said this will now be delivered from 2024, and will include primary six and seven pupils. We note the Scottish Child Payment of £25, which is estimated to have lifted around 50,000 children out of poverty. We also note that the pledge made by the First Minister to increase this to £30 at his first budget was not delivered. John Dickie said that “part of why the case has been made for extending free school meal entitlement and the case for universal free school meals” is because “there is long-standing evidence of the impact of poverty, diet and educational attainment”.98 Mr Dickie added that “the extension of universal free healthy school meals to children at least up to primary 5” was “one of the positive things that we have seen in Scotland”.99

Food banks

52. Given the challenges faced around food insecurity and food poverty throughout the cost of living crisis, the use of food banks, including in remote rural Scotland, has increased substantially.

53. Cara Hilton, of the Trussell Trust Scotland, said that the true scale of the issue was clear from their statistics. The Trust has provided a record number of emergency food parcels (259,744 April 2022-March 2023), “the most ever and a 30% increase on last year”, with a record number being for children (87,968).100 Many people (62,000 Scots last year), she said, are now using food banks for the first time. She cited evidence from the Joseph Rowntree Foundation which found that 90% of people on Universal Credit are now having to go without at least one essential, such as food, warmth or toiletries, and added that people in remote rural areas are having to get by on lower incomes.101 The James Hutton Institute told us that rural foodbanks are increasingly used by middle-income people who are in work: “some need to use a food bank on a regular basis to get by”.102 Cara Hilton said that “a car is an absolute essential in rural Scotland” and the Trussell Trust is “speaking to more and more workers who are having to use food banks because if they didn’t use a food bank, then they would not be able to put petrol in their car to get to work”.103

54. Ms Hilton described many people as being at “absolute breaking point” and, along with John Dickie of the Child Poverty Action Group, attributed the current rate of Universal Credit for the fact that the third sector is having to step in.104 She said that communities are coming together, “setting up pantries, setting up growing programmes, setting up other community projects to keep people and their communities fed”.105

55. Cara Hilton’s evidence offered examples of why people have had to turn to food banks in recent months:

We have a pensioner who has lived in a village her whole life. She has always used the bus service to do her big shop at Tesco, but that bus service has now been cut. There is no way of her being able to do her big shop. We had a family of five who had to throw out the whole contents of their fridge and freezer after a power cut. They were forced to use a food bank because they had no money left in the bank and no way of accessing credit. We had a teacher who was off on long-term sick following breast cancer, unable to work due to complications from surgery, and forced to use a food bank.106

56. The Royal Society of Edinburgh said that the five local authorities with the lowest median annual earnings in Scotland are all rural: Argyll and Bute, Dumfries and Galloway, Moray and Na h-Eileanan Siar. Higher prices in these areas, which are not commensurate with earnings, leads to increased use of food banks. This situation, contributes to younger people leaving these areas, changing the demography of remote rural Scotland towards an older, declining population.107

Ending the need for food banks

57. While the UK Government introduced measures to alleviate food poverty, such as the cost of living payments, competence relating to food poverty lies primarily with the Scottish Government. On 5 June 2023, the Scottish Government published a plan to “end the need for food banks”.108 It said it recognises the pressure on household budgets and had allocated almost £3 billion, last year and this, to support policies “which tackle poverty and protect people as far as possible during the ongoing cost of living crisis”.109 The plan sets out nine actions which will be taken over the next three years to improve responses to food insecurity. The actions include:

  • Supporting new local partnership work to deliver cash-first (access to cash in a crisis).
  • Expanding testing of new models that provide immediate assistance.
  • Improving access to advice in accessible settings.
  • Supporting wellbeing through community food approaches.
  • Continuing to support cash-first models that are inclusive.
  • Making it easier to refer to cash-first support.
  • Maintaining investment in the Scottish Welfare Fund and work with partners to produce an Action Plan to deliver improvements.
  • Continuing to listen to the direct experience of people.
  • Working with other funders to put shared values into practice.110

Future outlook

58. Given that the prices of energy, food and fuel remain persistently high, we asked witnesses about the outlook for food insecurity and food poverty going into winter 2023. John Dickie said that he sensed that parents “are fearful of what happens when you get into winter and there are additional costs, another round of high energy costs on top of the existing costs they are facing”.111 He added that for some it is a “cost of surviving crisis” and that for young people in particular these difficulties can affect their mental health and wellbeing.112

59. We are deeply concerned by the real hardship being experienced across many rural communities in Scotland, such as parents having to skip meals in order feed their children. Food banks provide a vital service in remote rural Scotland. There has been a significant increase in demand for their services with a record number of food parcels delivered over the past year.

60. Although there is no agreed definition of food insecurity, it is clear that the difficulties people experience in providing sufficient food for their families are the result of a range of issues affecting household budgets—there is no lack of available food, but there is often insufficient income to pay for it. This hardship has been exacerbated by covid-19 and other global events such as the war in Ukraine.

61. By Spring 2024, the UK and Scottish Governments should agree a consistent means of defining food insecurity and food poverty and show how it plans to measure this in the context of remote rural communities in Scotland. In its response to this report, both Governments should also set out what it is doing to address high food prices affecting remote rural communities in Scotland specifically.

62. The UK Government should work with the Scottish Government and local authorities jointly to investigate further the impact of high food prices as well as the scale and nature of food insecurity and food poverty on communities in remote rural Scotland. They should collate this data to identify parts of society worst affected and what must be done to ensure nobody goes without essential food.

5 Transport

63. Transport is the third and final strand that we have considered as part of our inquiry. Competency for transport policy in Scotland resides predominantly with the Scottish Government. However, we were keen to consider transport issues because they are heavily interlinked with the range of cost of living challenges faced by remote rural communities.

64. In general terms, we heard of a number of challenges relating to transport in remote rural communities, as well as some opportunities to improve the connectivity situation for people living in these areas. There has been a decline in the overall availability of public transport services across rural Scotland partly due to the level of funding available to local authorities, but also because of unacceptable and costly delays by the Scottish Government in respect of building crucial lifeline ferries. There have also been unacceptable and costly delays to the upgrading of critical road infrastructure such as the A9 and A96. The Scottish Government has subsequently announced that the A9 will be fully dualled from Perth to Inverness by 2034, no similar commitment has been given regarding the A96.113

65. During our visit to the Isle of Arran, we heard about the problems caused by the unreliability of ferries and a general lack of coordination between various modes of public transport.114 Also, high fuel prices create a significant challenge for households having to run a car or use public transport, as well as for businesses requiring transport to deliver goods or services. While we heard there have been “some positive aspects of the emphasis on active travel”, Ranald Robertson, Partnership Director at HITRANS (Highlands and Islands Transport Partnership), also said the situation—despite rising costs—is more about the decline in services, with the burden falling mainly on rural areas. He added that the decline in service funding should be reversed, especially as the costs of public transport “have continued to grow”.115

66. Mairi Gougeon MSP, the Scottish Government Cabinet Secretary for Rural Affairs, Land Reform and Islands, acknowledged in correspondence with us challenges in accessing regular and reliable public transport and the greater costs faced by remote rural areas on essentials including transport.116

Defining transport poverty

67. The evidence we received often made reference to people facing ‘transport poverty’. Dr Andy Cope, Director of Evidence and Insight at the sustainable transport charity Sustrans Scotland, told us that while “there is no formal definition”, the variables used to measure it are:

the availability of transport, access to transport—making sure that people can use the available transport—affordability, […] the amount of time that people have to spend travelling to get to their destinations, and the adequacy of conditions, whether that be the infrastructure or, in the case of walking and cycling, safety [sic].

Dr Cope noted that transport costs present “a range of problems that impact household budgets more widely”.117 Dr Cope added that what transport poverty means for people in practice is that “their opportunities are more limited”.118

68. We heard from Dr Cope of the Sustrans estimate that 466,000 households—one million people—across the whole of Scotland are exposed to transport poverty.119 Groups most affected in remote rural areas, we were told, include people with disabilities who have to make their way to health appointments and other specialist support which is likely to be further away.120 Even then, in many cases, transport options “are often inadequate for disabled people’s needs with an unacceptably low level of service for rural communities and additional accessibility barriers for disabled people attempting to use buses, ferries and even taxis”.121

69. We were also told that women are disproportionately affected by transport poverty. Evidence from the Poverty Alliance said that women account for the majority of public transport users and are less likely to own cars than men. They added that “women are also more likely to make more frequent and multi-purpose journeys in order to balance their caring responsibilities and paid work”.122

Challenges and opportunities

70. There was particular concern about the lack of integrated timetabling of public transport serving remote rural communities. Councillor Uisdean Robertson, Chair of the Transportation and Infrastructure Committee, Comhairle nan Eilean Siar (The Western Isles Council), said:

For somebody from Barra going to a hospital appointment in Stornoway, it can be a three-day event for a half-hour appointment because your ferry does not meet the plane does not meet the bus. We have been arguing for years for better integration of ferries, planes, buses and so on. That is quite an onerous journey for an elderly person going for cancer treatment if they have that kind of trip to face.123

Dr Andy Cope said that, due to the centralisation of services, “people have to travel further”.124 He added that, if some of these services were brought back into local communities, “then it immediately reduces the distances that people have to travel”.125

Roads

71. Prices of petrol and diesel have “set and broken many new records” since Russia’s invasion of Ukraine, which has pushed up the cost of all forms of road transport.126 In the Highlands and Islands, fuel prices tend to be higher than for Scotland overall.127 This has been particularly difficult for remote rural households who spend “disproportionately more of their income on transport”, with the Poverty Alliance telling us that adults in remote rural (75%) and accessible rural areas (82%) are more likely to drive to their place of work or education than adults in the rest of Scotland (60%).128 The issue of high fuel prices was echoed during our visit to the Isle of Arran.129 Councillor Uisdean Robertson told us that between Inverness and Uist, the difference in fuel prices can be as much as 20 pence per litre.130

72. We heard of some positive schemes around the cost of road transport - for example, the Scottish Government intervention on free bus travel for the under-22s and over-60s. However, Ranald Robertson highlighted that, if services are not there, the value of subsidies and other government or local authority interventions is reduced.131

Ferry and air services

73. We heard that, for island communities, ferry services affect every part of their day to day lives.132 A regular and reliable service impacts the goods in shops, feed for animals and tourism.133 Highlands and Islands Enterprise told us that reliance on ferry and air services is high amongst households in island communities (68% and 36% of such households are reliant on these for day-to-day activities respectively). Similarly, a majority (71%) of island businesses rely on ferries and around one in five (17%) rely on air services to a large extent.134 We gained a similar picture from the people we spoke to on our visit to the Isle of Arran, with the cost of ferries also being brought up.135

74. Western Isles Councillor Uisdean Robertson described as an “under the radar” issue travel for patients who have to journey to mainland hospitals (by ferry or plane) for appointments.136 Despite a discount scheme, “as we see it, the ferry adds a cost to everything where we live”.137 Unless you live it, you cannot understand it”, he said; and he later voiced criticism of the ferry operator, Caledonian MacBrayne, Transport Scotland and others who “do not understand the impact” of the challenges passengers face.138

75. Councillor Robertson later told us that ferry services “have certainly declined”, adding that there is “quite a significant amount of disruption”, especially if you have to stay overnight, which “happens all the time”. Patient travel support, he said, only “meets about one-third” of what it costs to stay in accommodation overnight and “huge costs” are involved if your transport is disrupted “which happens quite a lot because of the lack of ferries”.139

76. The James Hutton Institute told us that the “ongoing turmoil” of existing ferry services is “challenging the viability of some islands”, due to a combination of ongoing ferry disruption, lack of capacity and loss of customer confidence across the network. Their evidence cited a “real risk of business and island infrastructure failure”.140

77. However, there was some optimism, including from Ranald Robertson, that, once the six ferries that are currently under construction are in service, there will be “a significant improvement to the resilience of our island communities”.141 Nonetheless, there were also calls to look beyond the vessels currently being built and the next eight ships “over and above the six”.142 “The proper provision would make a huge difference to our lives in the Western Isles”, Councillor Uisdean Robertson told us.143

Active travel

78. While in many rural areas, active travel options, including walking and cycling, have limited scope to address the complex issues we have covered in this report, the evidence we received suggested they still have a role to play. As Dr Andy Cope of Sustrans put it, active travel “can work for a lot more people than it currently works for”.144 We were told by Ranald Robertson that “it is important that active travel investment reaches everywhere”, rather than spending being “mostly concentrated in the more urban areas”, a view Dr Andy Cope also endorsed.145 We were told that, compared with elsewhere in the UK, investment in active travel is highest in Scotland.146 The Scottish Government has announced an active travel transformation programme; for example, the Western Isles, Comhairle nan Eilean Siar, has received investment in new footpaths and traffic calming measures.147

UK Government policy

79. Although transport policy is largely devolved to the Scottish Government, the Scotland Office said in its written evidence to our inquiry that “the UK Government has worked with remote and rural communities in Scotland to support transport infrastructure projects via levelling up streams”.148 For example, in Round One of the Levelling Up Fund, North Ayrshire Council was awarded funds to improve the B714 which could “enhance links to Arran ferry at Ardrossan”.149 In Round Two of the Levelling Up Fund, Shetland Islands Council was awarded funds for a new roll-on, roll-off ferry for Fair Isle.150 The Chancellor in his Autumn Statement in November 2023 also announced that the UK Government are supporting the reallocation of £20 million from within the Inverness & Highland City Region Deal to fund essential landside infrastructure improvements for the Corran Ferry, subject to agreement through the appropriate Deal governance structures.

80. The Scotland Office told us that it also works with the Department for Transport to address transport issues in Scotland. For example, in April, the Scotland Office and the Department for Transport made commitments to “UK sustainable transport and maximising economic growth in Scotland”. As part of this, they held meetings with “local businesses and communities to explore ways to boost connectivity between Scotland and the rest of the UK”. Funding given partly by the UK Government aims to “improve connectivity to local towns and cities […] and encourage more people to walk and cycle”. Initiatives include “the regeneration of Ravenscraig’s road, rail, cycling and walking infrastructure [and] a new ferry to [serve] Fair Isle”.151

81. Ferries are existentially important to island communities, but also create knock-on costs for goods and services. The lack of regular, reliable, affordable and integrated transport provision–including adequate and reliable bus services - is one of the main barriers to remote rural communities mitigating the impact of the current cost of living crisis. Service disruption further hinders connectivity, preventing the movement of people and goods, therefore affecting communities’ cost of living in multiple ways. Active travel options provide limited opportunities to ease transport challenges in remote rural locations.

82. Given the continued problems the Scottish Government have faced progressing improvements to vital roads and ferry infrastructure, the Scottish Government should work together with the UK Government and local authorities to improve the provision of transport across rural Scotland. The Scottish Government should look to coordinate the operators of these services more rigorously to ensure that timetables are more integrated and meet the needs of people in these communities. Transport investment turbocharges the UK’s net zero ambitions and economic growth, and we welcome the action taken by both Governments to tackle this. The Committee shares the anger and frustration of affected communities by the ongoing failure of the Scottish Government to deliver two lifeline ferries which are so far six years late and £250 million over budget. Both Governments should work together to ensure mistakes are not repeated and that timely and cost-effective delivery of vessels happens in the future.

Conclusions and recommendations

Defining and measuring rural Scotland

1. The term “rural communities” encompasses a broad gradation of populations across Scotland and this results in a varied experience for people living in rural areas. Successful cost of living interventions need to account for and be tailored towards that variable experience. (Paragraph 14)

2. Whilst accepting the UK Government were keen to get support out to assist people as quickly as possible, the UK Government should carry out a review to assess the effectiveness and value for money of cost-of-living support provided by the UK Government during winter 2022/23. This review should evaluate:

a) How effectively this support met the needs of Scottish rural households;

b) How the UK Government could have better targeted the support; and

c) Whether all levels of Government have sufficient data and administrative systems to deliver more effective, targeted cost of living support in the future, if required

The UK Government should write to us with the findings of this review once completed. (Paragraph 15)

Rising costs of energy

3. The unprecedented package of financial support delivered to households across Great Britain by the UK Government last winter was welcome and helped to mitigate the full impact of the dramatic energy price increases experienced during the period. However, the Committee heard that the blanket level of energy support provided was not sufficiently “rural-proofed”–it did not account for additional costs required for many households in rural Scotland. Energy schemes prioritised administrative ease to accelerate funds getting to people over specific targeting. Whilst understandable in the context of the immediate crisis, a system of support more tailored towards the acute pressures faced by rural communities would have been more effective. In addition, many off-grid users reported unacceptably long waits to receive payments. Support measures need to ensure parity between households connected to the grid and those reliant on alternative fuels. (Paragraph 33)

4. One way to help reduce energy costs in the long-term is to improve the energy efficiency of homes. The challenge of retrofitting and insulating homes, in terms of cost, time and practicality, are particularly acute for rural areas. Rural Scottish households are therefore facing more barriers to accessing home energy efficiency schemes, despite being most in-need of them. Addressing this challenge will be key to reducing the rural premium for these Scottish consumers. (Paragraph 36)

5. The Scottish Government’s Energy Efficiency (Area-Based) Scheme uses ring-fenced funds which require approval, but which we heard was causing concern. Witnesses were unable to provide reasons for the Scottish Government’s underspend of this scheme. (Paragraph 37)

6. We hope to hear from the Scottish Government on how they will respond and address these concerns. (Paragraph 38)

Food insecurity and food poverty

7. We are deeply concerned by the real hardship being experienced across many rural communities in Scotland, such as parents having to skip meals in order feed their children. Food banks provide a vital service in remote rural Scotland. There has been a significant increase in demand for their services with a record number of food parcels delivered over the past year. (Paragraph 59)

8. Although there is no agreed definition of food insecurity, it is clear that the difficulties people experience in providing sufficient food for their families are the result of a range of issues affecting household budgets—there is no lack of available food, but there is often insufficient income to pay for it. This hardship has been exacerbated by covid-19 and other global events such as the war in Ukraine. (Paragraph 60)

9. By Spring 2024, the UK and Scottish Governments should agree a consistent means of defining food insecurity and food poverty and show how it plans to measure this in the context of remote rural communities in Scotland. In its response to this report, both Governments should also set out what it is doing to address high food prices affecting remote rural communities in Scotland specifically. (Paragraph 61)

10. The UK Government should work with the Scottish Government and local authorities jointly to investigate further the impact of high food prices as well as the scale and nature of food insecurity and food poverty on communities in remote rural Scotland. They should collate this data to identify parts of society worst affected and what must be done to ensure nobody goes without essential food . (Paragraph 62)

Transport

11. Ferries are existentially important to island communities, but also create knock-on costs for goods and services. The lack of regular, reliable, affordable and integrated transport provision–including adequate and reliable bus services - is one of the main barriers to remote rural communities mitigating the impact of the current cost of living crisis. Service disruption further hinders connectivity, preventing the movement of people and goods, therefore affecting communities’ cost of living in multiple ways. Active travel options provide limited opportunities to ease transport challenges in remote rural locations. (Paragraph 81)

12. Given the continued problems the Scottish Government have faced progressing improvements to vital roads and ferry infrastructure, the Scottish Government should work together with the UK Government and local authorities to improve the provision of transport across rural Scotland. The Scottish Government should look to coordinate the operators of these services more rigorously to ensure that timetables are more integrated and meet the needs of people in these communities. Transport investment turbocharges the UK’s net zero ambitions and economic growth, and we welcome the action taken by both Governments to tackle this. The Committee shares the anger and frustration of affected communities by the ongoing failure of the Scottish Government to deliver two lifeline ferries which are so far six years late and £250 million over budget. Both Governments should work together to ensure mistakes are not repeated and that timely and cost-effective delivery of vessels happens in the future. (Paragraph 82)

Formal minutes

Tuesday 16 January 2024

Members present

Pete Wishart, in the chair

Alan Brown

Wendy Chamberlain

David Duguid

Christine Jardine

Mark Menzies

Ms Anum Qaisar

Douglas Ross

Cost of living: impact on rural communities in Scotland

Draft Report (Cost of living: impact on rural communities in Scotland), proposed by the Chair, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 82 read and agreed to.

Resolved, That the Report be the First Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.

Adjournment

Adjourned till Monday 22 January at 2.30 p.m.


Witnesses

The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website.

Monday 27 February 2023

Frazer Scott, Chief Executive Officer, Energy Action Scotland; Heather Williams, Training Lead, Scottish Women’s Budget Group; Ruth Boyle, Policy and Campaigns Manager, Poverty AllianceQ1–40

Professor David Bell CBE, Emeritus Professor of Economics, Royal Society of Edinburgh; Chris Birt, Associate Director Scotland, Joseph Rowntree Foundation; Professor Hugo van Woerden, Visiting Professor, University of the Highlands and IslandsQ41–96

Monday 19 June 2023

Cara Hilton, Senior Policy & Public Affairs Manager (Scotland), The Trussell Trust; John Dickie, Director, Child Poverty Action Group in Scotland; Professor Mary Brennan, Chair of Food Marketing and Society, University of Edinburgh Business School, Chair, Scottish Food CoalitionQ97–126

Monday 3 July 2023

Uisdean Robertson, Chair of the Transportation and Infrastructure Committee, Comhairle nan Eilean Siar (Western Isles Council); Ranald Robertson, Partnership Director, HITRANS (Highlands and Islands Transport Partnership); Dr Andy Cope, Director of Evidence and Insight, Sustrans ScotlandQ127–189

Monday 11 September 2023

John Lamont MP, Parliamentary Under-Secretary of State, Office of the Secretary of State for Scotland; Kris Krasnowski, Deputy Director, Policy Delivery and Relationship Management, Office of the Secretary of State for Scotland; Mr Richard Holden MP, Parliamentary Under-Secretary of State (Roads and Local Transport), Department for Transport; Gavin James, Deputy Director – Scotland, Wales and Northern Ireland, Department for Transport; Amanda Solloway MP, Parliamentary Under-Secretary of State (Minister for Energy Consumers and Affordability), Department for Energy Security and Net Zero; Ben Pledger, Deputy Director, Energy Affordability, Strategy, Devolution & Legislation, Department for Energy Security and Net ZeroQ190–231


Published written evidence

The following written evidence was received and can be viewed on the inquiry publications page of the Committee’s website.

COL numbers are generated by the evidence processing system and so may not be complete.

1 Age Scotland (COL0018)

2 Anonymised (COL0008)

3 Argyll and Bute Third Sector (COL0010)

4 Christians Against Poverty (CAP) (COL0017)

5 Comhairle nan Eilean Siar (Western Isles Council) (COL0013)

6 Eat, Sleep, Ride, CIC (COL0003)

7 Eat, Sleep, Ride, CIC (COL0001)

8 Energy Action Scotland (COL0030)

9 Experts by Experience Panel of the Poverty and Inequality Commission (COL0011)

10 Highlands and Islands Enterprise (COL0033)

11 Highlands and Islands Enterprise (COL0021)

12 Inclusion Scotland (COL0023)

13 Independent Food Aid Network (IFAN) (COL0025)

14 James Hutton Institute (COL0034)

15 Joseph Rowntree Foundation (COL0032)

16 Liquid Gas UK (COL0015)

17 NHS Highland; and University of the Highlands and Islands (COL0029)

18 National Farmers Union of Scotland (NFU Scotland) (COL0024)

19 Nourish Scotland (COL0031)

20 RSABI (COL0019)

21 Scotland Office (COL0028)

22 Scottish Countryside Alliance (COL0026)

23 Scottish Crofting Federation (COL0016)

24 Scottish Land & Estates (COL0035)

25 Scottish Rural Action (COL0012)

26 Scottish Women’s Budget Group (COL0022)

27 Scottish Women’s Convention (COL0005)

28 Shetland Islands Council (COL0007)

29 The Federation of Small Businesses (COL0020)

30 The Poverty Alliance (COL0006)

31 The Royal Society of Edinburgh (COL0027)

32 Young Lives vs Cancer (COL0014)


List of Reports from the Committee during the current Parliament

All publications from the Committee are available on the publications page of the Committee’s website.

Session 2023–24

Number

Title

Reference

1st Special

Promoting Scotland Internationally: Government Response to the Committee’s Eighth Report of Session 2022–23

HC 274

Session 2022–23

Number

Title

Reference

1st

Defence in Scotland: military landscape

HC 82

2nd

Access to cash in Scotland

HC 80

3rd

Firearms licensing regulations in Scotland

HC 710

4th

Defence in Scotland: military shipbuilding

HC 1096

5th

Public Broadcasting in Scotland

HC 1048

6th

Hydrogen and carbon capture in Scotland

HC 83

7th

Defence in Scotland: the North Atlantic and the High North

HC 1576

8th

Promoting Scotland Internationally

HC 625

1st Special

Immigration and Scotland: Government Response to the Committee’s Fourth Report of Session 2017–19

HC 84

2nd Special

Airports in Scotland: Government Response to the Committee’s Fifth Report of Session 2021–22

HC 303

3rd Special

Defence in Scotland: military landscape: Government Response to the Committee’s First Report

HC 674

4th Special

Access to cash in Scotland: Government Response to the Committee’s Second Report

HC 695

5th Special

Defence in Scotland: military shipbuilding: Government Response to the Committee’s Fourth Report

HC 1267

6th Special

Public broadcasting in Scotland: Government Response to the Committee’s Fifth Report

HC 1305

7th Special

Hydrogen and carbon capture in Scotland: Government Response to the Committee’s Sixth Report

HC 1421

8th Special

Firearms licensing regulations in Scotland: Government response to the Committee’s Third Report

HC 1701

9th Special

Defence in Scotland: the North Atlantic and the High North: Government Response to the Committee’s Seventh Report of Session 2022–23

HC 1878

Session 2021–22

Number

Title

Reference

1st

Universities and Scotland

HC 54

2nd

Welfare policy in Scotland

HC 55

3rd

The UK Shared Prosperity Fund and Scotland

HC 52

4th

Renewable energy in Scotland

HC 51

5th

Airports in Scotland

HC 601

1st Special

Welfare policy in Scotland: UK and Scottish Government Responses to the Committee’s Second Report

HC 790

2nd Special

The UK Shared Prosperity Fund and Scotland: Government Response to the Committee’s Third Report

HC 791

3rd Special

Renewable energy in Scotland: Government Response to the Committee’s Fourth Report

HC 901

4th Special

Universities and Scotland: Government Response to the Committee’s First Report

HC 1252

Session 2019–21

Number

Title

Reference

1st

Coronavirus and Scotland: Interim Report on Intergovernmental Working

HC 314

2nd

Coronavirus and Scotland

HC 895

1st Special

Problem drug use in Scotland: Government Response to the Committee’s First Report of Session 2019

HC 698

2nd Special

Coronavirus and Scotland: Government Response to the Committee’s First and Second Reports

HC 1118


Footnotes

1 The Scottish Government, THE COST OF REMOTENESS Reflecting higher living costs in remote rural Scotland when measuring fuel poverty, 2021

2 Q4; Q2

3 Scottish Women’s Convention (COL0005); Scottish Rural Action (COL0012); Scottish Countryside Alliance (COL0026)

4 Scottish Government, Scottish House Condition Survey: 2021 Key Findings, published May 2023

5 Experts by Experience Panel of the Poverty and Inequality Commission (COL0011); Scottish Rural Action (COL0012); Scottish Women’s Budget Group (COL0022); Inclusion Scotland (COL0023)

6 Scotland Office (COL0028)

7 Scotland Office (COL0028)

8 Note of visit to the Isle of Arran, Scotland, 14 - 15 September 2023

9 Scottish Government, Urban Rural Classification 2020, May 2022, page 4

10 Scottish Government, Urban Rural Classification 2020, May 2022, page 5

11 Scottish Government, The Cost of Living Crisis in Scotland: analytical report, Annex 2, page 80

12 Scottish Parliament Information Centre, Rural health and social care in Scotland, 2 August 2022

13 Scotland Office (COL0028)

14 Q56

15 The Royal Society of Edinburgh (COL0027)

16 Q16

17 For example, see: Q34; Q49

18 Q2

19 Scotland Office (COL0028)

20 Price cap to increase by £693 from April, Ofgem, February 2022

21 Ofgem updates price cap level and tightens up rules on suppliers, Ofgem, August 2022

22 Gas and electricity prices during the ‘energy crisis’ and beyond, Research briefing 9714, House of Commons Library, 3 January 2024

23 For example, see: Inclusion Scotland (COL0023); The Royal Society of Edinburgh (COL0027); Q107

24 Households off the gas-grid and prices for alternative fuels, Research briefing 9838, House of Commons Library, 20 September 2023

25 Scottish Rural Action (COL0012); Scottish Women’s Convention (COL0005)

26 Scotland Office (COL0028)

27 DESNZ, Monthly and annual prices of road fuels and petroleum products (Table 4.1.1). Quoted prices include VAT.

28 The Poverty Alliance (COL0006). See also: Shetland Islands Council (COL0007); Experts by Experience Panel of the Poverty and Inequality Commission (COL0011)

29 The Poverty Alliance (COL0006); Christians Against Poverty (CAP) (COL0017); The Royal Society of Edinburgh (COL0027)

30 Comhairle nan Eilean Siar (Western Isles Council) (COL0013)

31 Comhairle nan Eilean Siar (Western Isles Council) (COL0013)

32 Inclusion Scotland (COL0023)

33 The Poverty Alliance (COL0006); Inclusion Scotland (COL0023). See also Scottish Government, Scottish House Condition Survey: 2021 Key Findings, published May 2023

34 Section 3(6), the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019; See also: 2 Approach and scope - The cost of remoteness – reflecting higher living costs in remote rural Scotland when measuring fuel poverty: research report – gov.scot (www.gov.scot)

35 Scottish House Condition Survey: 2017–2019 Local Authority Tables (www.gov.scot)

36 The Cost of Living (Tenant Protection) (Scotland) Act 2022: First Report to the Scottish Parliament (www.gov.scot)

37 Annex E – Cost of Living (Tenant Protection) (Scotland) Act 2022 – proposed extension: statement of reasons – gov.scot (www.gov.scot)

38 The Royal Society of Edinburgh (COL0027)

39 Economic and fiscal outlook - March 2023 (obr.uk). Of this, it expected just under half, or £39.9 billion of this to be recouped via windfall taxes on energy producers over the medium term.

40 HM Treasury, Spring Budget 2023, HC 1183

41 The cap is usually expressed as an annual figure based on typical household energy consumption.

42 Scotland Office (COL0028)

43 OBR, Economic and fiscal outlook – March 2023

44 “Government outlines plans to help cut energy bills for businesses” Department for Business, Energy and Industrial Strategy press release 21 September 2022; Households off the gas-grid and prices for alternative fuels, Research briefing 9838, House of Commons Library, 20 September 2023

45 Department for Energy Security and Net Zero, Energy Bills Support Scheme Alternative Fund (GB / NI) and Alternative Fuel Payment Alternative Fund (GB): applications made by customers, June 2023 (later updated October 2023)

46 Q193

47 Scottish Government, How Winter Heating Payment works, accessed 5 December 2023

48 Letter from Mairi Gougeon MSP, 13 September 2023

49 The Royal Society of Edinburgh (COL0027); See also Christians Against Poverty (CAP) (COL0017)

50 Comhairle nan Eilean Siar (Western Isles Council) (COL0013)

51 The Royal Society of Edinburgh (COL0027)

52 Scottish Land & Estates (COL0035)

53 Q15

54 Christians Against Poverty (CAP) (COL0017). See also: The Royal Society of Edinburgh (COL0027)

55 Q54

56 Inclusion Scotland (COL0023)

57 Q23

58 Experts by Experience Panel of the Poverty and Inequality Commission (COL0011)

59 Q53

60 Comhairle nan Eilean Siar (Western Isles Council) (COL0013); Experts by Experience Panel of the Poverty and Inequality Commission (COL0011)

61 Inclusion Scotland (COL0023)

62 Scotland Office (COL0028)

63 Q200

64 Scottish Government, Tackling fuel poverty in Scotland: a strategic approach, December 2021

65 The Poverty Alliance (COL0006); see also Christians Against Poverty (CAP) (COL0017)

66 Comhairle nan Eilean Siar (Western Isles Council) (COL0013); National Farmers Union of Scotland (NFU Scotland) (COL0024)

67 Scottish Countryside Alliance (COL0026)

68 Q79

69 Q28

70 Q30; Scottish Government, Area Based Schemes: allocation per local authority, November 2022

71 Q30

72 Q78

73 Office for National Statistics, Cost of living insights: food, 4 December 2023; House of Commons Library, Rising cost of living in the UK, 2 June 2023

74 James Hutton Institute (COL0034)

75 SAC survey, July 2023 (all respondents who say they are ‘relatively’, ‘quite’ or ‘very’ remote, n=115)

76 Note of visit to the Isle of Arran, Scotland, 14 - 15 September 2023

77 Parliamentary Office for Science and Technology, Diet-related Health Inequalities, 8 December 2022, page 2

78 Parliamentary Office for Science and Technology, Diet-related Health Inequalities, 8 December 2022, page 2

79 Parliamentary Office for Science and Technology, Diet-related Health Inequalities, 8 December 2022, page 2

80 House of Commons Library, Rising cost of living in the UK, 2 June 2023

81 Q104

82 Q104

83 NHS Highland and University of the Highlands and Islands (COL0029)

84 Experts by Experience Panel of the Poverty and Inequality Commission (COL0011)

85 Royal Society of Edinburgh (COL0027)

86 Anonymous (COL0008)

87 Q98

88 Q100

89 Q105

90 The Trussell Trust, Hunger in Scotland, 5 June 2023, page 14

91 Inclusion Scotland (COL0023)

92 Inclusion Scotland (COL0023)

93 Inclusion Scotland (COL0023); Q114

94 Q114

95 Scottish Women’s Budget Group (COL0022)

96 Q108

97 Q108

98 Q109

99 Q109

100 The Trussell Trust, Hunger in Scotland, 5 June 2023, page 23; James Hutton Institute (COL0034)

101 Q99

102 James Hutton Institute (COL0034)

103 Q99

104 Q99

105 Q118

106 Q99

107 Royal Society of Edinburgh (COL0027)

108 Scottish Government, Tackling food insecurity, 5 June 2023

109 Scottish Government, Tackling food insecurity, 5 June 2023

110 Scottish Government, Cash-First – towards ending the need for foodbanks in Scotland: plan, 5 June 2023

111 Q110

112 Q110

113 Q148; Q152

114 Note of visit to the Isle of Arran, Scotland, 14 - 15 September 2023

115 Q148; Q152

116 Letter from Mairi Gougeon MSP, 13 September 2023

117 Q129

118 Q129

119 Q128

120 Inclusion Scotland (COL0023)

121 Inclusion Scotland (COL0023)

122 The Poverty Alliance (COL0006)

123 Q162

124 Q186

125 Q186

126 House of Commons Library, Petrol and diesel prices, 31 March 2023, page 7

127 NFU Scotland (COL0024)

128 Experts by Experience Panel of the Poverty and Inequality Commission (COL0011); The Poverty Alliance (COL0006)

129 Note of visit to the Isle of Arran, Scotland, 14 - 15 September 2023

130 Q139

131 Q148

132 Q130

133 Q130

134 Highlands and Islands Enterprise (COL0033)

135 Note of visit to the Isle of Arran, Scotland, 14 - 15 September 2023

136 Q130

137 Q130

138 Q130; Q168

139 Q146

140 James Hutton Institute (COL0034)

141 Q131

142 Q162

143 Q162

144 Q142

145 Q162; Q140

146 Q137

147 Transport Scotland, Getting Scotland walking, wheeling and cycling, 6 Jun 2023

148 Scotland Office (COL0028)

149 Scotland Office (COL0028)

150 Scotland Office (COL0028)

151 GOV.UK, Transport investment turbocharges UK’s net zero ambitions and economic growth in Scotland, 30 May 2023