Botched insulation scheme was 'doomed to fail', say MPs

Thousands of people are living in homes that pose a risk to their health and safety after the ''catastrophic failure'' of two government insulation schemes, MPs have said.

Major defects have been found in over 30,000 houses fitted with insulation through government schemes since 2022.

The Public Accounts Committee has now said that the "level of non-compliance" by installers should be investigated for fraud and that the government's current response was "not credible".

The Department for Energy Security and Net Zero said it was "categorically untrue there are widespread health and safety risks".

A spokesperson added that "for the vast majority, this means a home may not be as energy efficient as it should be".

The parliamentary committee, which monitors the effectiveness of government spending, said the insulation schemes ECO 4 and GBIS, which began in 2022, were so badly designed they were almost ''bound to fail''.

It said they had received ''virtually no attention'' from senior government officials so that they did not know whether the schemes were working for at least two years.

Committee chair Sir Geoffrey Clifton Brown said the level of non-compliance by insulation installers was so extreme that the matter should be referred to the Serious Fraud Office.

The committee found that less than 10% of affected homes had been fixed since the problems emerged in October 2024.

It warned that when households have to wait for help, the likelihood of damage increased, resulting in "immediate health and safety risks that need urgent attention".

The report also criticises Trustmark, the organisation in charge of overseeing the quality of insulation work, for not notifying officials of high levels of faulty external wall insulation until October 2024.

Responding to the committee's report, Trustmark said it remained "totally committed to ensuring strong consumer protection for all types of home improvements".

"We are continuing to work with government, our Scheme Providers, Registered Businesses and where appropriate, guarantee providers, to get these problems found and fixed.

"These examples of poor-quality workmanship are completely unacceptable and underline the need for change and reform to the current system," Trustmark said.

Affected customers can find information about TrustMark's Find and Fix scheme on their website.

Government insulation schemes have been running for more than 15 years and have cost billions of pounds in public money. They were meant to makes homes warmer, reduce carbon emissions and help some of the poorest and most vulnerable people to lower their energy bills.

But BBC News has reported on many cases over the last year where work done was of such poor quality it has led to damp, black mould and, in some cases, dry rot.

The government has said that homes will be fixed at no cost to the consumer.

It said the original installer is liable for fixing the problems, and a guarantee should cover repairs up to £20,000 when an installer goes bust or fails to address the problem adequately.

But the committee warned that repairs can cost more than this.

BBC News reported last year on the case of a home in Luton where the damage from failed external wall insulation is so extensive it is projected to cost more than £250,000. The bill is being picked up by the installer's insurer.

The Department for Energy Security and Net Zero said it expected a very small number of people to need help funding their repairs.

But the Public Accounts Committee accused the Department of downplaying the scale of the problem and said their plan was ''not credible''.

The committee's report focused on work carried out since 2022, but BBC News has spoken to homeowners who had their properties insulated under earlier government schemes, who say they are also in need of help.

In October, the government spending watchdog the National Audit Office said the insulation schemes could have involved between £56m and £165m worth of fraud.

But MPs on the committee said they suspect the true level of fraud to be much higher.

Martin McCluskey, Minister for Energy Consumers, said they were fixing the system inherited from the previous government which "was not fit for purpose and had multiple points of failure".

He said: "Every household with external wall insulation installed under these two schemes are being audited, at no cost to the consumer.

"And we have been clear that no household should be asked to pay any money to put things right.

"Of all non-compliant properties found to date, over 50% have been remediated."

He added the government had taken the decision to end the ECO scheme and was instead investing more through local authorities.