In a new report on a disastrous government scheme that was meant to reduce domestic heating bills, the House of Commons public accounts committee (PAC) finds serious failings at every level.
The National Audit Office found last year that 98% of external and 29% of internal wall insulation installed up to mid-January 2025 under the Energy Company Obligation (ECO) scheme were defective, leaving immediate health and safety risks.
Given the likely role of fraud that the PAC has found in the poor-quality installations, the report also takes the unusual step of recommending government refer the issue to the Serious Fraud Office (SFO).
Installations worth 1.75% of the scheme value have been identified as fraudulent by Ofgem, but given the high levels of non-compliance in the scheme, the PAC suspects the true level of fraud to be much higher. No single overall organisation in the system had overall responsibility for tackling fraud, or the data to make it effectively able to do so.
The PAC鈥檚 inquiry establishes a picture of clear systemic failure. Virtually no attention was paid to it by senior officials at the Department for Energy Security & Net Zero (DESNZ), who took two years to recognise the scale of the problems.
This very poor overall supervision led to many avoidable faulty installations. Its system of quality assurance and consumer protection was overly complicated to the point of being almost bound to fail.
When it comes to the expert organisations within this system, TrustMark accepted it should have realised the levels of risk involved much sooner, and the United Kingdom Accreditation Service apologised for its role.
The PAC notes that it is not good enough for organisations holding so much expertise and knowledge to say they delivered on their specific responsibilities and instead blame the system of which they were a key part.
The PAC notes that the recent announcement of the Warm Homes Plan is likely to lead to scaling up of other energy efficiency installations such as solar panels. It is vital that this is accompanied by a proper oversight of quality, that was so lacking here.
Committee chair Sir Geoffrey Clifton-Brown said: 鈥淚 have served on the public accounts committee for 12 years. In all that time, a 98% failure rate in a public sector initiative amounts to the most catastrophic fiasco that I have seen on this committee.
"Indeed, our report finds the project was doomed to failure from the start. Government behaved inexplicably in redesigning a similar scheme which was working reasonably well into a highly-complex number of organisations with siloed responsibilities, which did not respond to failures anything like quickly enough to prevent damage being done to people鈥檚 homes.
鈥淧otentially thousands of people are now living with health and safety risks in their homes, and despite government鈥檚 protestations we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works.
"All involved in the system must now move at far greater pace to make good. The public鈥檚 confidence will have rightly been shaken in retrofit schemes given what has happened, and government now has a self-inflicted job of work on its hands to restore faith in the action required to bring down bills and reduce emissions.
鈥淔inally 鈥� this committee鈥檚 remit is financial scrutiny. We are not a law enforcement body. The sheer levels of non-compliance found here make it clear to us that these matters should be referred to the Serious Fraud Office, and our report recommends as such.鈥�
The PAC report聽Faulty energy efficiency installations聽is available at聽
Got a story? Email news@theconstructionindex.co.uk
