Overview: A widespread retrofit problem under the ECO and GBIS programs
A new National Audit Office (NAO) examination has revealed a troubling snapshot of the UK’s energy efficiency drive. Almost all external wall insulation installed under the Energy Company Obligation (ECO) and the Great British Insulation Scheme (GBIS) is so poorly fitted that it will require repair or replacement. The findings raise pressing questions about how the schemes were designed, delivered, and overseen by the government and industry bodies.
According to the NAO, of roughly 23,000 homes insulated externally under ECO and GBIS, 98% require some form of remedial work. In addition, 9,000 to 13,000 homes that received internal insulation also face major problems, with about 29% of these projects deemed defective. In total, more than 3,000 installations across both categories present immediate health and safety risks that demand urgent remediation.
What went wrong and why the system failed
The NAO describes a system where “unclear and fragmented roles, responsibilities and accountabilities” allowed substandard delivery. Weak oversight, limited auditing, and a complex network of scheme providers, certification bodies, Ofgem, and the Department for Energy Security and Net Zero (DESNZ) created fertile ground for poor workmanship.
There were worrying signs of how the audit process could be manipulated. Installers sometimes held certifications from multiple bodies or transferred their credentials between bodies, enabling them to operate with less stringent oversight. Fraud also emerged as a significant concern: Ofgem estimated that retrofit businesses had falsified ECO claims for between 5,600 and 16,500 homes, potentially defrauding energy suppliers of £56m to £165m.
Real-world consequences for homeowners
Poorly installed insulation can lead to damp, mould, blocked ventilation shafts, and exposed electrical wiring. The NAO notes that many households were left unable to remortgage or sell their homes, underscoring the financial and emotional toll of the substandard works. In January, nearly 40 companies were barred from installing insulation amid growing outcry over quality concerns.
Energy analysts and housing advocates stress that when insulation and proper ventilation are executed correctly, they are among the safest, most effective ways to cut energy bills and keep homes warm. The current revelations threaten to erode trust in a national push to reduce fuel poverty and carbon emissions, at a time when many households still face high energy costs.
The government’s response and what comes next
DESNZ and Ofgem have acted after the findings, but critics argue that reform should go deeper. Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, described the retrofit scheme failures as “stark” and emphasized the need for clear accountability and robust consumer protections to prevent recurrence.
Minister for energy consumers, Martin McCluskey, acknowledged systemic failings and asserted that decisive action is underway. He highlighted reforms designed to simplify the process, ensure accountability, and guarantee that households can have faulty installations repaired at no cost where applicable.
Looking ahead, observers say the focus must shift from blaming past programs to rebuilding a trustworthy retrofit framework. That includes clearer guidance for homeowners, stronger industry oversight, and a transparent mechanism to track repairs, monitor quality, and deter fraud. Only with a tightened system can insulation deliver its promised benefits: lower energy bills, warmer homes, and real progress in the fight against fuel poverty.
What homeowners should do now
Homeowners affected by potentially faulty insulation should contact Ofgem for guidance on remediation and coverage. Installers may be liable for the costs of correcting faulty work, and authorities are urging consumers to seek redress through the established channels. As the government works to fix the system, affected households are advised to document any damp, mould, or ventilation issues and pursue professional assessments to determine necessary repairs.
In summary, the NAO’s findings reveal a systemic flaw in a flagship energy retrofit program. The path forward requires decisive reform, strict oversight, and a renewed commitment to ensuring every home receives safe, effective insulation that cuts fuel bills rather than creating new hazards.
