³ÉÈË¿ìÊÖ

Well, the proposals that we are about to consult on on heat in buildings set out how the heat standard will work, and they recognise that fossil fuel systems for emergency back-up might continue to be necessary. It is probably more likely that those would be portable systems, rather than an installed gas boiler.

We have an opportunity to ensure that the vast majority of the heat that is consumed comes from sustainable sources and is non-polluting. We also have an opportunity to ensure that we achieve that in a way that is consistent with affordability, tackling fuel poverty and other objectives.

The act set the initial targets. The new target that we are setting is for 2035. We do not have annual targets in between those.

Sorry, it is—

Yes. We have been exploring a range of models of operation. That might involve direct municipal ownership; it might involve joint ventures between local authorities and other partners. The opportunity exists not only to ensure that heat decarbonisation is achievable for people—that householders and businesses feel that a service is available to them and that it will provide them with long-term certainty about the consumer protection that is being built in and about low-carbon and affordable heat—but that they trust that it is being operated to a large extent in the public interest.

As Mark Ruskell knows, Denmark has generously shared its experience and expertise on heat networks and it has been advising us for a number of years on the development and implementation of the 2021 act. Denmark has been developing heat networks for 50 years and it is still rolling them out, because there is high demand for them in the third or so of the country that does not have access to them yet. People want to be connected to them, because they know that they are an affordable way to meet their heating needs, and that is the case more than ever given the cost of living crisis.

Denmark knows that the public have a high degree of trust in the operation of such systems in the public interest. If we can emulate that in as much of Scotland as possible, we will not only achieve decarbonisation and do it affordably, but—we hope—achieve the high degree of public trust that our neighbours in Denmark have achieved.

As I have said, the 2021 act requires us to set a 2035 target. We are doing that to comply with the act, but setting the target is helpful in itself as a clear signal to the sector.

It is a little bit like the wider heat in buildings agenda that we have been discussing recently and on which we will consult shortly. The Government’s setting a clear direction of travel is the clear signal that industry needs that Scotland is serious about getting the work done. That, indeed, can focus not only minds but investment capacity to achieve the targets.

In many ways, that is what happened with renewable electricity generation. Successive Scottish Governments set a clear direction of travel and gave clear market signals that Scotland was serious about renewable electricity. If we had not done that, setting targets alone would not have been effective.

By the range of actions that I have set out, Scotland is demonstrating not only the will but the focus that is necessary to achieve the targets that we are setting today.

It is developing. As I mentioned, some local authorities are further ahead than others and some have higher heat network potential than others. Earlier in the process, Glasgow was already beginning to take forward some of the work on LHEES. I think that the council had already begun to undertake that work before it was a legal requirement. The city is clearly one of the areas that have significant potential for heat networks, which is necessary given that there is a high density of homes there that will be difficult to decarbonise in other ways.

A significant number of local authorities have completed their LHEES and others are due to complete the work by the end of the year. The picture that is emerging, local authority by local authority, demonstrates that we have a handle on where heat networks are likely to be introduced, as well as—to address the convener’s concern once again—being confident that they will generate a return on investment. The developments will generate an income stream, which is one of the things that will make them attractive for investment.

The issue is, of course, extremely serious. Some of the longer-term work that we are doing, including the homelessness prevention duties in the new housing bill, will be relevant.

I should, though, point out some of the information that has already been published on referrals with regard to people becoming homeless and the tenure that they previously had. A significant reduction in respect of the private rented sector has been showing up in the statistics over the period; in fact, I think that the figure has come down to pre-pandemic levels.

Adam Krawczyk might have found the graph that I have just been frantically searching for. Adam—is there anything you can say about the figures that you have in front of you?

Obviously, we stay in touch with the tribunal on the impacts with regard to the design and, now, implementation of the legislation, and we will continue to be in close contact on the implications of any further changes. What is worth reflecting on, though, is that even once the 2022 act comes to an end and ceases to apply, tenants will have the high levels of protection that they had before it. Indeed, the UK Government itself is now starting to introduce some aspects of that protection; I welcome its change of position in that respect. The end of the emergency legislation will not mean the end of tenant protection—not by a long way; tenants will return to the high level of legal rights and protection that existed prior to it.

We continue to keep a close eye on the issue. We are aware of anecdotal evidence that landlords have been talking about it. Some cite the temporary cost of living measures in the 2022 act as one factor; I have heard from a number of landlords for whom changes in UK tax policy have been a bigger motivation in their decisions about whether to consider leaving the sector.

On the actual evidence, though, the number of properties registered for private rent in Scotland under the registration scheme has not changed significantly. We are conscious that there is likely to be a bit of a time lag in the collection of the data, but at the moment the figures do not show a significant reduction in the number of properties available.

As I said, we will continue to keep under review the proportionality and necessity of the measures. The next report that I mentioned is due by mid-October; it will inform the committee’s consideration of our proposals at that stage. As was set out in the statement of reasons that we published in June, we believe that the evidence is sufficient to justify continuation of the rent cap. Any subsequent variation in the level of the cap would be likely to be covered in the report in October.

The cost crisis is continuing to have an impact, and we need to recognise that that continued impact is being felt by tenants as well as by landlords. It has always been part of the design of the legislation to recognise the protection that tenants need, but it also recognises that safeguards for landlords are needed and that there must be a proper balance between those needs.

The fact is that the economic circumstances have not fundamentally changed. The cost crisis has not fundamentally gone away and, even if the hopeful projections around reduced inflation come to pass in the months ahead, people are still living with the increased costs that they have been landed with. That applies to tenants as well as to landlords and does not change the fundamental calculation that we have made about the balance between protection of rents and the safeguards for landlords that we have proposed.