SCOTS are facing a “secret bill” of thousands of pounds to cover the costs of fighting climate change in their own households due to a failure to plan it as a major public works programme, a new report has claimed.
The analysis, published by the Common Weal, says work the Scottish Government is doing to decarbonise Scotland's economy will cost each household a total base cost of around £46,000.
This includes direct payments on actions such as heat pumps, insulating homes and costs passed on prices such as new electricity generation and charging an electric vehicle.
However it argues households will also face a substantial “privatisation premium” - accounting for profits and inefficiencies in the system - which adds around £9000 to these costs.
The Common Weal report says this is happening because all of the costs are being pushed onto the consumer, rather than the changes being made as part of a major programme of public works.
The ‘Secret Bill’ report states: “Making it possible to pass all the costs onto households requires that this work is done in a random, piecemeal fashion which brings with it an additional inefficiency premium.
“And because it insists that this all needs to be done by the household commissioning contractors from the private sector to do the work it means that an extra profit premium has to be added to incentivise the private sector to do it.”
According to the figures compiled by the Common Weal, the base cost for a household without a replacement car adds up to £46,200, plus a £9000 “privatisation premium”.
When the cost of replacing a car is included, this rises to £81,345 – with the addition of a "privatisation premium" of £10,035.
The report added: “Common Weal is very strongly committed to the need for urgent climate action but believes it must be done as a major public works programme for three reasons.
“Firstly, it is much more efficient. Secondly, it means households do not have to pay this giant bill – it is spread over 50 years through government borrowing.
“Thirdly, it can then be part of a green industrial strategy which can generate enough private sector activity and jobs to more than pay for the cost of the work.
“Common Weal estimates that the cost of paying for this through the public sector is about £5 billion but that if a realistic proportion of the supply chain is captured the work can generate over £6 billion in tax and other direct revenue.”
Common Weal head of strategic development Robin McAlpine said: “There is a lack of honest about how much the current Scottish Government decarbonisation strategy is going to cost Scottish households and how much more than necessary they will have to pay because of the approach taken.
“If there was a proper public debate to explore how we get the urgent task of decarbonising the economy done people would discover that there is a cheaper, more efficient way to do this which does not push enormous costs onto households and which actually creates more jobs in the private sector than the proposed approach.
"We need to treat this as a massive public engineering project and manage it accordingly. What we cannot afford is to anger and alienate voters by lumbering them with large, unnecessary debts and fail to be fully open about it.
"The future of the planet is at stake and right now I fear that the Scottish Government is only fuelling an anti-environmental backlash.”
A Scottish Government spokesperson said: “Scotland has a generous funding package of grants and loans available to households for energy efficiency and climate-friendly heating systems.
“Our Warmer Homes Scotland programme seeks to improve the homes of people living in fuel poverty and cut bills whilst our proposals for a Heat in Buildings Bill include plans for minimum energy efficiency standards for Scotland’s homes, which could make them warmer and less expensive to heat. Moving to clean heating can also liberate households from exposure from volatile fossil fuel prices.
“We have now provided over £65 million to support development of a comprehensive charging network for electric vehicles covering all of Scotland. Public funding has also supported people with loans to purchase electric vehicles, and supported businesses and households to install charging points across the country.
“Achieving a just transition to a net zero, climate resilient Scotland requires more than public sector spending alone. Businesses, communities, workers and householders will all have a part to play. It will be crucial to ensure a fair distribution of costs and benefits and we are considering how best to achieve this in our climate change agenda.”
