Introduction: a sweeping failure in insulation schemes
A National Audit Office investigation has found that almost all external insulation installed under the UK government’s energy efficiency drive was poorly fitted, leaving thousands of homes at risk of damp, mould, and structural issues. The findings cover schemes designed to reduce fuel poverty and cut carbon emissions, but the delivery failed in execution, with long-lasting consequences for homeowners.
Scope of the problem: how many homes are affected
According to the NAO, around 23,000 homes received external wall insulation through the Energy Company Obligation (ECO) and the Great British Insulation Scheme (GBIS). A staggering 98% of these installations require repairs, replacement, or remedial work. An additional 9,000 to 13,000 homes treated with internal insulation also face major problems, representing about 29% of those cases. More than 3,000 installations across both types are considered safety and health risks that demand immediate remediation.
Impact on households: damp, mould, and financial strain
The consequences are not just technical defects on a report; they translate into tangible hardship for families already coping with fuel poverty. Substandard insulation has left residents unable to remortgage or sell their homes, and in some cases, it has worsened cold, damp conditions inside living spaces. The report highlights a system that allowed inexperienced contractors to operate with insufficient oversight, undermining public trust in programmes meant to improve living conditions and cut energy bills.
Why the failures happened: governance and accountability gaps
The NAO attributes the breakdown to a complex, poorly regulated framework. Roles, responsibilities, and accountabilities across scheme providers, certification bodies, Ofgem, and DESNZ were unclear and fragmented. Some installers exploited weaknesses in the audit process by rotating or duplicating certification, reducing the likelihood they would accumulate substantial track records. Instances of fraud were detected, with Ofgem estimating that retrofit businesses falsified claims for ECO installations in thousands of homes, potentially siphoning £56m to £165m from energy suppliers.
Reactions from experts and policymakers
Experts describe the situation in stark terms. Simon Francis of the End Fuel Poverty Coalition warned that the system’s failures have harmed thousands and eroded trust in energy efficiency efforts. Jess Ralston of the Energy and Climate Intelligence Unit stressed that properly installed insulation and ventilation are among the safest ways to reduce bills and keep homes warm, underscoring that the problem lies in delivery, not concept.
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, labelled the retrofitting failures as “stark” and called for clear measures to prevent recurrence. He also noted that data gaps obscure the true scale of fraud, while commending the government for acting to fix the most egregious problems.
What’s being done now: reforms and accountability
In response to the findings, government ministers have insisted on decisive action to fix the system. The aim is to ensure that all faulty solid-wall insulation is repaired at no cost to households and to establish transparent accountability mechanisms. Installers are now liable for correcting faults, and Ofgem is guiding households to seek remediation when needed. Energy consumers’ minister, Martin McCluskey, stated that reforms will simplify the process, provide clarity, and guarantee prompt remediation when things go wrong.
What households should know
Homeowners affected by substandard insulation installations should contact Ofgem to learn about remediation options and support. The NAO’s findings serve as a reminder that while energy efficiency schemes have the potential to alleviate fuel poverty and reduce carbon emissions, robust oversight, strong auditing, and straightforward consumer protections are essential to achieving those goals.
