Local residents and Leith Central Community Council have written to board members at housing developer Places for People Scotland. They seek to exert moral and reputational pressure to speed an effective resolution of an alarming increase in heating costs.
The mixed-tenure new-build development for owners and renters at Shrubhill Walk consists of 345 flats, which are all served by a gas-fired district heating system. The area was developed by PfPS, which appointed RMG as factor for the full site with responsibility for procuring the energy price for all residents. Residents have always been informed about this arrangement.
In 2019, a heating tariff for these customers was locked in for 5 years. PfPS says this meant residents’ bills remained unchanged at between £22 and £55 per month on average – among the lowest in the country during an unprecedented energy crisis.
Price rise
Once that original contract came to an end, a new tariff began in April 2024. Inevitably, given the changed heating market since 2019, fuel bills for Shrubhill Walk residents were going to rise. ‘However,’ concedes PfPS, ‘we accept that we did not communicate this change well enough to Customers in the run-up and we apologise for this.’
According to information received by Cllr Jack Caldwell (Ward 12), RMG had approached 5 gas suppliers from its list of 14 but only managed to obtain 1 quote (from SEFE, which is the current supplier). Worried residents contacted PfPS, and the company froze the tariff at the previous rate for 3 months while it reviewed its processes. (PfPS paid the difference in cost.)
The new tariff finally came into place on 1 August 2024, since when residents tell us they have been charged a unit rate of 20.5 pence per kwh for gas heating and hot water. Their previous unit rate was 4.76 pence per kwh. Their daily standing charge increased at the same time from £1.03 to £1.113. While an increase in prices was to be expected, the hike for Shrubhill Walk residents was an eye-watering 400 per cent. Some have struggled to find the money.
Residents say the Ofgem price cap unit rate for gas between 1 October 2024 and 31 December 2024 was 6.24 pence per kwh, increasing to 6.34 pence per kwh from 1 January 2025 to 31 March 2025. The respective daily standing charges were 31.66 pence per day, reducing to (currently) 31.65 pence. Last August, Shrubhill Walk residents were paying £1.13 per day.
RMG informed residents in November 2024, that – under new arrangements – their gas unit rate from 1 April 2025 would be 4.86 pence per kwh, from supplier Crown Energy. Residents were provided with a list of suppliers which RMG had approached (a total of eight), with seven suppliers providing quotes. This reduction in price is obviously welcome news for customers.
Although relieved in the short term, those Shrubhill locals contacting the Spurtle remain uneasy. They say they are unclear about the duration of the new contract with Crown Energy and fear further sharp increases in future.
When the cap doesn’t fit
An online meeting held to shed light on the issues was organised in late November 2024 by Edinburgh MPs (including Tracey Gilbert, MP, Edinburgh North & Leith) representing constituencies with PfPS housing developments. Residents from all such sites participated in the meeting.
PfPS was invited to attend, but the firm asserts that, given very short advance notice and no agenda/discussion points, no representative was available to take part. PfPS has, however, continued to be in ‘frequent contact’ with Gilbert and other elected members since.
What residents learned at the meeting was that residential district heating systems are not included in the Ofgem price cap protecting customers elsewhere. Legislation is currently making its way through the Westminster Parliament (energy is a reserved matter), but new regulation is not expected to come into effect until 2026 at the earliest. Until then, Shrubhill Walk residents and others covered by gas-fired district heating systems feel financially exposed.
Concern and help
PfPS says, ‘Our procurement of […] tariffs over the years has saved Customers a significant amount of money and continues to do so. However, we welcome and look forward to the regulation of heating networks coming into place this year and know it will give customers greater confidence.
PfPS continues, ‘We have great sympathy with Customers around their heating bills rising and understand this has been a concern.
‘We would never want to see anyone struggle to meet costs and we have a range of financial support available to our customers and have been providing advice and support on a one-to-one basis, based on their own personal circumstances.’
The spokesperson concludes with an assurance that PfPS Board members will respond to Leith Central Community Council’s letter.