The Scottish Federation of Housing Associations (SFHA) has said it is "extremely disappointed" by the UK Government's decision to cut the Energy Company Obligation (ECO).

ECO is the main source of funding for energy efficiency measures in Scotland.

Following a consultation on the future of ECO, where the SFHA and a number of its members responded, the UK Government has now published its response to those views and outlined its proposals for the ECO.

In a statement, the SFHA said it is concerned that the targets set for the main ECO fund have been reduced by a third, and that the fund can now support lower cost measures such as cavity wall insulation.

David Stewart, Policy Manager, explained: "The SFHA is extremely disappointed with these proposals. At a time when fuel poverty levels are rising due to above inflation fuel price rises, and when climate change is a matter that requires immediate action, cutting funding for energy efficiency measures is short sighted.

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"While housing associations in Scotland have a strong track record in energy efficiency, with the most energy efficiency homes in Scotland, they need support to tackle 'hard to treat' homes.

"Hard to treat homes are homes with a solid wall construction such as stone tenements or multi-storey flats, and these homes require expensive solid wall insulation to improve their energy efficiency. Expanding the scope of the fund at the same as reducing the overall carbon reduction target will restrict the resources available for 'hard to treat' homes."

He continued: "The proposed changes to ECO will drastically reduce investment in these homes – indeed a number of housing associations have had to scrap significant schemes that would have cut fuel poverty while creating and maintaining vital construction jobs.

"We know from studies that investing in energy efficiency in housing is the most effective way to boost the economy and create jobs, and so we urge the UK Government to think again and invest in measures to cut fuel poverty and address climate change."

(JP/IT)