Written evidence submitted by The Poverty Alliance (COL0006)

The Poverty Alliance response to the Scottish Affairs Committee inquiry into Cost of living: impact on rural communities in Scotland

February 2023

The Poverty Alliance is Scotland’s anti-poverty network. Together, we influence policy and practice, provide evidence through research, support communities to challenge poverty and build public support for the solutions to tackle poverty. Our members include grassroots community groups, activists who are experiencing poverty, academics, large national NGOs, voluntary organisations, statutory organisations, trade unions, and faith groups.

1. Introduction

The Poverty Alliance welcomes the opportunity to respond to this call for evidence on the impact of the cost of living crisis on rural communities in Scotland. The impact of the crisis has not been felt equally, and a number of factors make people in rural Scotland more susceptible to financial insecurity during periods of rising costs. The cost of living is considerably higher in rural Scotland than it is in urban Scotland.[1] People in rural communities are also more reliant on alternative energy sources, have less choice around food shopping, and are more reliant on cars to access childcare, education and employment. It is vital that these factors are considered in the design and delivery of cost of living support.

This is an important, and timely, inquiry as support with energy bills is expected to end in April. There are complexities in using pre-existing measurements of poverty, which largely focus on income and place as opposed to outgoings, in rural areas. These measures often understate the extent of rural poverty as they do not take into account the higher cost of living in these geographies.[2] At a time when rural households are facing a rising tide of poverty as a result of higher expenditure on fuel and travel, we welcome the focus on rural communities in this inquiry.

2. The particular challenges facing Scottish rural communities in relation to the cost of living compared with other areas of the UK

There are a number of reasons why communities in rural Scotland have faced specific challenges during the cost of living crisis. Evidence shows that the cost of food, clothing, household goods, housing, transport and household fuel bills are higher in rural areas.[3] Analysis by the Scottish Government suggests that living in remote rural Scotland is between 15% and 30% more expensive than the UK average. Households in rural Scotland, therefore, require a higher income to attain the same minimum living standard as those living in urban areas. During the rising cost crisis, rural communities have faced particular challenges in making ends meet.

Energy

Prior to the current crisis, evidence shows that people living on low incomes in rural areas in Scotland were already more likely to be in fuel poverty.[4] The Scottish Government estimate that almost two-thirds (65%) of rural dwellings are not within the coverage of the gas grid. These households are thus dependent on alternative fuel types, such as electric storage heating and oil-powered heating, which are substantially more expensive. This is evidenced by the fact rates of extreme fuel poverty for households outwith the coverage of the gas network (19%) are higher than for households within coverage of the gas network (11%). This is particularly challenging as colder weather in the north of Scotland also increases the need for home heating. As a result of this, Shetland Islands Council has predicted that, without support, 96% of islanders will be in fuel poverty by April 2023.[5]

These issues are exacerbated by the fact dwelling characteristics associated with lower energy efficiency are disproportionately represented in rural areas. Recent research from IPSOS has also shown that while there is some support for households to change fuel type or make a property more energy efficient, households in the Highlands and Islands face barriers with cost, accessing tradespeople, and infrastructure.[6]

Our joint research with the Scottish Women’s Budget Group into the disproportionate impact of the cost of living crisis on women in Scotland[7], found that rising energy costs were an almost daily concern for women in rural areas and the islands. Christine, a single woman, aged 55-64, relied on oil heating and did not have the resources to meet rising costs of oil going into winter. She said: “It is a constant worry, you’re not sleeping the same, you’re worrying what’s going to happen next, what are you going to do next?” Ellen, in the 45-54 age category, who lives in remote rural area with her family, was very worried about the impacts of people going cold or hungry in winter: “It’s long and dark, and it gets dark early… and when you’re cold and you’re hungry…I think some folk will probably not be here this time next year either”.

Transport

In 2019, households in rural Scotland spent 26% more on fuel per month when compared to urban households (£135 and £107 per month respectively). [8] This is primarily driven by longer journey distances in rural areas and lower availability of public transport. The resilience on cars in rural areas create challenges during the current crisis when the price of fuel has risen substantially. 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%).[9] This is particularly true for disabled people who are more reliant on cars due to the inaccessibility of public transport.

Where public transport is available, evidence highlights that bus fares are higher in rural areas when compared to the rest of Scotland.[10] Research from Transport Scotland suggests 58% of areas in the region are at high risk of transport poverty, where people don’t have access to essential services or work because of a lack of affordable transport.[11] This again creates particular challenges for specific groups of people including those who rely on public transport to attend regular hospital appointments. This also has implications for women’s poverty, as women account for the majority of public transport users and are less likely to own cars than men. Women are also more likely to make more frequent and multi-purpose journeys in order to balance their caring responsibilities and paid work.[12]

Food

Evidence shows that weekly food costs are up to 13% more for island communities and up to 4% higher in remote rural Scotland, compared to urban areas in the UK.[13] The Poverty Alliance’s joint research with the Scottish Women’s Budget Group highlighted that rising food costs are a particular concern for women living in rural and island communities due to pre-existing higher costs and a lack of alternative options to reduce costs. Some of the measures to minimise costs, such as shopping around were unavailable to women in rural areas. Women living in rural areas described being completely dependent upon the shops that are available to them locally, which were often smaller, and much higher in price than shops and supermarkets in urban Scotland.[14]

Housing

Data analysed by the Scottish Government suggests that housing in rural Scotland is more expensive than the housing in urban areas.[15] There are also issues with the availability of housing in rural areas including a lack of affordable housing options and issues with the quality of private rented accommodation.[16] This is often tied to there being a high number of second homes and holiday homes in rural and Island communities.[17]

3. To what extent recent UK Government cost of living support measures meet the needs of rural populations in Scotland
4. Whether UK Government cost of living support could be better tailored to meet the needs of rural communities in Scotland

The Poverty Alliance have welcomed the UK Government’s cost of living support measures and believe this action has provided a vital lifeline to people living on low incomes. However, we also believe that there was scope to provide more assistance to low-income households during the crisis. For example, the continuing impact of the rising cost of living requires a bolstering of our social security system to provide long-term and sustainable support to prevent more people being pulled into poverty.[18] There was a need for the UK Government to provide tailored support for unpaid carers and disabled people, in recognition of their higher household energy costs.

For rural areas specifically, there are a number of key gaps within current provision:

• The costs of heating fuel are not covered by the Energy Price Guarantee which has meant households in rural areas that are off-grid (65% of rural households) have faced spiralling costs.
• The emphasis on ‘heat pump first’ approaches for off-grid properties does not recognise the high cost of installation.
• Current support measures do not take into account the higher costs and higher usage of energy in rural Scotland. 

5. Any further steps the UK Government could take to support Scottish rural communities in relation to the cost of living

There are a number of actions the UK Government, Scottish Government and Local Authorities should take to support low-income households in rural Scotland:

• The UK Government and the Scottish Government should work with energy suppliers and civil society organisations to identify measures designed to support rural areas who are dependent on alternative forms of fuels, as well as households on pre-payment meters.
• Introduce a rural uplift in future energy support packages in recognition of the higher costs of energy in rural communities.[19]
• Increased financial support for rural households to install heat pumps and improve energy efficiency to reduce vulnerability to fuel poverty in the longer-term.[20]
• Explore community benefit arrangements, including access to low-cost energy for island communities.[21]
• Make changes to Universal Credit to keep households afloat including removing policies which separate award from entitlement (the benefit cap and the two-child limit); reversing the £20 cut made in 2022; introducing split payments; and removing the five week wait.
• Extend free bus travel to everyone receiving Universal Credit (and other low-income benefits) and under 25s.
   

For more information, please contact:
Ruth Boyle, Policy and Campaigns Manager
Ruth.Boyle@povertyalliance.org

January 2023