AS Scots face an 80 per cent increase in average energy bills to £3,549, the SNP Government could improve on its response to the crisis by using funds earmarked for the ‘ill-conceived’ £2 billion bank it founded.

After convening a summit at which energy leaders and consumer groups discussed the energy crisis last week, Nicola Sturgeon said the Government she leads could do little to alleviate a problem that had to be tackled at source by the Westminster administration.

That claim however underplayed the potential for the Scottish Government to do much more to help ease the pressure on households amid fears this could persist for many months.

The surge in prices has reflected acute competition for gas amid disruption to supplies since Russia launched its assault on Ukraine, which shows no sign of ending.

Green campaigners that Nicola Sturgeon is courting in her bid to separate Scotland from the UK have said the response should concentrate on reducing reliance on fossil fuels by developing more windfarms and the like, despite the challenges posed by the weather and storage issues.

Insulate Britain caused a furore last year by blocking roads in its effort to get the Westminster Government to spend more on energy saving.

However, a focus on developing generating capacity that could take years to have any significant impact may underestimate the potential to address the demand side of the equation.

The effect of any UK Government measures to help to ease the impact of the energy bill spike could be increased markedly if households are helped to reduce demand at the same time.

One obvious way to do that would be for the Scottish Government to ensure all households have adequate insulation at a time when cost of living increases will make many people reluctant to commit to the upfront costs involved.

Official figures show, however, that for all the Scottish Government’s talk about wanting to support households, the country has made glacial progress on the energy saving front in recent years.

On its website the Scottish Government notes that it takes a multi-pronged approach by providing support for local authorities and for households.

The Warmer Homes Scotland programme provides up to £5,000 funding for households that receive qualifying benefits and are identified as living in or at risk of fuel poverty.

Interest free loans of up to £15,000 are available for other owner-occupiers and some private sector landlords to cover up to 75 per cent of the cost of energy efficiency measures.

The latest Scottish Government report on the programmes shows the number of households in fuel poverty fell by just 6,000 during the 2018/19 financial year, to 613,000, representing 24 per cent of the total. Of these 311,000 (12.4%) faced extreme fuel poverty.

The report notes that there had been little change in the fuel poverty rate on the latest official definition over the preceding four years.

The number of Scottish households facing fuel poverty is set to soar in coming months, with growing numbers of people who used to be comfortably off caught in the net. Against that backdrop the Scottish Government needs to take urgent action to get energy saving measures installed in as many households as possible.

Earlier this month it announced that Warmer Homes Scotland support would be made available for an additional 100,000 homes. But that may not be enough to offset the increase in the number of people on benefits facing fuel poverty recorded in recent months.

Amid the rise in energy costs which was seen after Covid lockdowns eased, the Scottish Government’s support programmes appear to have made little impact.

Figures obtained by the Liberal Democrats show that the number of homes supported under the WHS scheme fell to 2,904 in 2020/21 from 5,326 in 2017.

In response, the Scottish Government said WHS was a demand-led scheme and would benefit from a record £55m funding in 2022/23. But that raises obvious questions about why demand appears to have fallen.

The Scottish Government must remove any obstacles that discourage people from applying for funding. This could involve increasing the support available for low-income households and simplifying the processes involved.

But the scale of the crisis means incentives should be made available to encourage a much wider range of people to invest in energy efficiency.

Loans for those considered to be better off could be replaced by grants. These could be made repayable when homes are sold.

The costs could be recovered by redeploying millions earmarked for the Scottish National Investment Bank, which has long struggled to justify its existence.

The product of an initiative launched by former first minister Alex Salmond in 2009, the bank opened its doors in November 2020.

Nicola Sturgeon said then the bank would use the £2bn that would be made available to it over 10 years to tackle some of the biggest challenges Scotland faced, such as the transition to net zero.

But after a sluggish start the bank parted company with its first chief executive Eilidh Mactaggart in January.

In May the bank was damned as “unfocused and ill-conceived” in a report by management professor Ross Brown of St Andrews university for the Reform Scotland think tank.

While the bank has developed a portfolio of 19 investments involving a total commitment of £249m, there is little if any evidence that it is doing anything different from private sector players or what Government-funded Scottish Enterprise was already doing.

Last week the bank launched an initiative to help businesses scale up with renowned entrepreneur Sir Tom Hunter. This sounds worthy but Scottish Enterprise has been supporting firms with high growth potential for years.

The bank invested £3m in insulation maker indiNature in August last year.

However, in terms of net zero it has invested far more on the power generation side by backing firms operating in sectors that have long been attracting strong interest from investors.

These include windfarm development.

The bank made a £13m commitment to the Iona Wind Partnership managed by Asper Investment in November last year which it claimed was needed to help unlock investment in onshore wind.

The money entrusted to London-based Asper could have been used to insulate thousands of homes in Scotland.