Major blow for Ed Miliband as fraud squad urged to investigate £4.6bn scheme | UK | News
Huge blow to Ed Miliband as fraud squad calls for investigation into £4.6bn net zero plan (Image: Getty)
Ed Miliband has been dealt a blow after a fraud squad was called in to investigate a “disastrous” £4.6bn net zero plan overseen by his department.
A damning report by the Public Accounts Committee (PAC), which monitors the effectiveness of government spending, called on ministers to refer home insulation schemes to the Serious Fraud Office after more than 30,000 properties were left defective. The committee described it as “the most catastrophic fiasco” that “failed at every level” and harshly criticized the Energy Security and Net Zero department, claiming it received “virtually no attention” from senior government officials so it took them two years to realize the extent of the problem.
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The Energy Company Obligation scheme (ECO) and the Great Britain Insulation scheme aimed to insulate homes with poor energy efficiency. However, the committee feared fraud due to the extremely low quality of the installation.
The ECO was a Government scheme first introduced in 2013 and has gone through different versions, and the GBI was launched in July 2023, both during 14 years of Tory rule.
The ECO 4 and GBIS plans, which start in 2022, are so poorly designed they are almost “doomed to fail”, a parliamentary committee has said.
Nearly 98% of external wall insulation installed by mid-January 2025 had major defects requiring repairs, with some posing immediate health and safety risks, the public spending watchdog revealed last year.
The defects likely affected 32,000 to 35,000 homes during this time, and less than 10% have since been identified and repaired.
The committee feared repair costs would be passed on to customers, with energy suppliers bearing the estimated £4.6bn cost of the schemes.
Sir Geoffrey Clifton-Brown, chairman of the PAC, warned: “Potentially thousands of people are now living with health and safety risks in their homes and, despite the government’s objections, we do not have sufficient assurance that they will not incur financially unaffordable bills to repair defective work. Everyone involved in the system now needs to act much faster to fix the situation.”
Ministers stressed that the installer is responsible, no household will have to pay for repairs and costs of up to £20,000 should be covered by a warranty if the installer ceases trading or fails to make repairs.
Approximately 98% of insulation was found to be faulty (Image: Getty)
But he noted that installers and warranty providers are closing and reopening businesses to avoid liability.
MPs also feared the scale of the problem could be much greater than current understanding and called on the SFO to investigate.
It comes at a disastrous time for the energy department, after Ed Miliband unveiled his £15bn Warm Homes Plan, which will introduce solar panels, heat pumps and insulation.
Sir Geoffrey added: “Given what has happened, public confidence in the retrofitting plans will rightly have been shaken, and the government now has some self-study to restore faith in the action needed to cut bills and cut emissions.”
A DESNZ spokesperson said: “It is simply not true that there are widespread health and safety risks; for the vast majority this means a home may not be as energy efficient as it should be.”
