Six weeks ago, Scottish Government announced that they wanted to consult with EPC register stakeholders on how the future funding of the register will work. The preferred suggestion is that Energy Assessors continue to pay for the running and maintenance of the register, in the same way that they have done since 2012.
However, because of a shortfall in the number of lodged EPCs, the register has not recouped enough money each year to cover the cost of running the service.
The proposal is to therefore to increase the register fees for all EPCs lodged on the register by 125%. This is something that Stroma is very concerned about, cannot agree with and considers it unaffordable by our Scottish assessor members.
Here follows Stroma Certification's response to the Scottish EPC Consultation, as written by our Technical Manager, Andrew Parkin:
Do you support the continuation of the register funding approach introduced in 2012 - that the operation of the SEPCR be self-financing, supported primarily by the statutory lodgement fee levied on each lodgement of energy performance data?
Stroma Certification feels that the cost of running the SEPCR (or any other register) should be covered by the Government.
This would ensure that best value is delivered as it is the government budget that would provide the money. Whilst it is appreciated that the government, and therefore the tax payer, has covered this cost for many years in its entirety or via subsidy, an increase of £1.45 on a domestic EPC and £6.74 on a non-domestic EPC would be very difficult for energy assessors to accommodate.
As it currently stands, the Energy Assessor pays for this via their Approved Organisation and this adds to the cost of recovering the funds for the register due to the additional administration involved from all sides. There doesn't seem to be another way to levy a fee that is fair to all users of the register. It would not be fair to require all energy assessors to pay a standard annual fee, or for Approved Organisations to pay a standard annual fee and then pass the fee onto their members. Therefore the fee should be usage or per click related as it currently is.
The fee paid by the assessor is usually incorporated into the EPC fee charged to the instructor of the report. In essence, the public ultimately pays the bill. However, please note the comments made in section 3 of this submission, which indicates why the increase in register fee may result in the assessor covering the cost for any increase. A significant increase may result in a dramatic effect on the energy assessment industry.
Do you support the intent to review the lodgement fee on an annual basis to ensure that charges are set at the minimum level needed to cover operational costs?
Stroma Certification is keen to see the review of fees to only happen every 2 years, so that members have period of certainty and the impact of changes are lessened for all stakeholders.
Stroma still believes that costs of running the register should be fairly static and that required development can be built in to the cost well in advance. Also, annual EPC volumes should be fairly easy to plot, using trend analysis, so an annual review shouldn't be necessary. However, we suggest setting it to every two years, and have an exceptional circumstances clause built in which allows a review to instigated if necessary.
Please use this section to provide any other commentary or observations you have on the current funding of the Scottish Energy Performance Certificate Register. Where practical, please provide examples or evidence to support the issues you raise.
The E&W register always sets a change date with a months' notice and the change date is always mid-month (6th of April) which means extra work for our accounts team, as they need to split a month into two invoices or have two items on each invoice. This has to be applied to over 3000 lodging member's invoices in a month.
Stroma suggest that any change to fees are implemented at the start of a month and at least 3 months' notice is given to Organisations and Assessors, to help them plan and discuss with clients, if they need to raise EPC fees.
The timing of such increases need to be considered too, as budgets are often set in advance of April (typically) and E&W register tends to announce variations on fees only a month prior to them being implemented (usually in March), which can cause issues with forecasts as these have already been set.
Stroma hopes that the Scottish Government avoids giving such short notice but still aligns the review with budgetary timescales. Finally, Stroma would like Scottish Government to be mindful of the impact of any register fee increase.
It is fair to state that it will be unlikely for the assessor to be able to pass the fee onto the customer. The market is very competitive and customers will naturally look for the best fee for an EPC and for every assessor who will put their fees up, to cover the additional cost, there will be assessors who won't. This may lead to assessors spending less time at a property, so that they can make up this deficit by completing extra work. The quality of the work may then suffer.
The large increase proposes in the fee (approx. 125%) will possibly see a number of companies and individuals deciding to exit the market. Scottish Government should share this concern and avoid this scenario wherever possible.