MPs slam ‘abject failure’ over insulation scheme as victims up to £230k out of pocket
Tens of thousands of homeowners face “unaffordable bills” to repair defects caused by the government’s failed energy efficiency scheme, MPs have warned.
A report by the Public Accounts Committee reveals that the “appalling failure” of the government-backed Energy Company Obligation (ECO) scheme to install insulation in homes has resulted in costs of more than £230,000.
The Commons spending watchdog warns that the government has given no real assurance that it will deliver on its promise that no one affected will have to pay to fix the problem, pointing to cases where the cost of repairs far exceeds the £20,000 mark.
The group also casts doubt on the ability of original installers to withstand the scale of potential demands once they are put in charge of carrying out repairs.
Applicants for the scheme either had to have a household income of under £31,000 or have someone in the household with a long-standing serious health condition.
Last year, the National Audit Office found that external wall insulation installed under the scheme was defective in 98 per cent of cases and posed immediate health and safety risks.
It turns out that the reason for so many poor-quality installations can be attributed to work being subcontracted to incompetent firms and individuals, businesses cutting corners, and uncertainty over standards.
The issue was not flagged until October 2024, more than two years after the start of the ECO scheme. But by September 2025, only 3,000 of the estimated 30,000 affected homes had been identified and repaired.
The Department for Energy Security and Net Zero (DESNZ) is currently working with Ofgem and TrustMark to carry out inspections to determine the full scope of the problem.
Sir Geoffrey Clifton-Brown, chairman of the PAC, said: “I have served on the Public Accounts Committee for twelve years. In all that time, a 98 per cent failure rate on a public sector initiative represents the most disastrous fiasco I have ever seen on this Committee.”
“Potentially thousands of people are currently 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.”
Fuel Poverty Action spokesman Jonathan Bean said: “The Government’s home renovation scandal is growing and before continuing down the same path, ministers need to focus on repairing already damaged homes and ending the suffering of the tens of thousands of often vulnerable people living in them.
“Victims of botched renovations are tired of vague promises; what they want is a public investigation of this scandal and a guarantee that their homes will be repaired.”
The report comes shortly after the government unveiled its £15bn Warm Homes Scheme, which will see homeowners pick up green technology such as solar panels and heat pumps through free or low-interest loans.
MPs and campaigners argue the government must restore public confidence in such government plans by ensuring they are implemented effectively.
Sir Geoffrey said: “Given what has happened, public confidence in plans to strengthen will rightly be shaken and the government now has a bit of a work to do on its own to restore faith in the action needed to cut bills and cut emissions.”
Mr Bean added that there was a “huge risk of history repeating itself” in implementing the Warm Homes Plan, which could turn into “an even bigger fiasco”.
Energy Consumers Minister Martin McCluskey said: “We inherited a broken system from the previous Government. It was not fit for purpose and had multiple points of failure. We are cleaning up this mess.
“Every home that has external wall insulation fitted under these two schemes is inspected at no cost to the consumer. And we have made it clear that no home should be asked to pay any money to put things right.
“More than 50% of all non-conforming properties identified to date have been remedied. We have also taken the decision to end the ECO scheme and instead invest further through local authorities, which have a much better record of delivery.
“We are reforming the consumer protection system to better protect people. We will establish a new Warm Homes Agency, introducing a single system for renovations to ensure stronger, official government control and improve quality.”
