Tens of thousands of homes insulated under government schemes need repairs

Two government schemes to reduce energy use by insulating homes have largely failed, with tens of thousands of homes needing upgrade works, the spending watchdog has found.

According to the National Audit Office (NAO), 98% of homes with external wall insulation under plans established by the previous government experience problems that will lead to dampness and mold if precautions are not taken.

It was stated that almost one-third, or 29%, of the houses with internal insulation were in need of repair.

Energy Consumer Minister Martin McCluskey said the government had taken action and the homes would be repaired “at no cost to the consumer”.

Mohammed Mahedi, who had the external walls of his Luton home insulated two years ago, is living with the consequences.

”Some mornings I wake up breathing really heavy. I feel it in my neck. “I feel it in my lungs,” he says.

BBC Reported the effect for the first time There was an incident of faulty insulation in Luton last year.

Mohammed is still struggling to solve the problem.

“We came up with a plan that was supposed to help us, but it just made everything worse.”

The NAO report focused on work carried out between 2022 and the start of 2025 on two specific programmes, ECO4 and the UK Insulation Plan.

In 2022 the previous government directed energy companies to spend billions of pounds raised through taxes on energy bills on insulating homes in the UK, targeting people on benefits and those living in very poorly insulated homes.

However, the NAO found there were “clear errors” in the design of the Energy Company Obligation (ECO) scheme which resulted in “poor quality installations as well as suspicion of fraud”.

NAO chief executive Gareth Davies said it was now up to the Department for Energy Security and Net Zero (DESNZ) to ensure responsible businesses repaired “all affected homes as quickly as possible”.

“The system also needs to be reformed to prevent this from happening again,” he said.

The NAO, which monitors how public money is spent, cited “unskilled labour”, cutting corners by businesses and uncertainty about which standards apply to which jobs, as reasons for substandard work.

It was revealed that 22,000 to 23,000 homes with external wall insulation and around 13,000 properties with internal wall insulation now need repairs.

A small percentage of installations (6 per cent for external insulation and 2 per cent for internal insulation) were said to pose an “immediate health and safety risk” due to faults such as exposed electrical cables or blocked boiler ventilation.

The NAO also leveled criticism at TrustMark, the consumer protection scheme set up in 2021 to monitor the quality of insulation programmes. He said there was “weak” oversight and inadequate oversight of the plans.

The NAO said this allowed installers to “game” the system. Last year Ofgem, the body that regulates the entire industry, estimated that businesses had made false claims for ECO installations in up to 16,500 homes, potentially claiming between £56 million and £165 million from energy suppliers.

TrustMark said it recognizes more needs to be done and remains “fully committed to ensuring strong consumer protection and trust”.

He said the organization had taken “robust, fair and decisive action” when it first became aware of issues with work in 2024 and had “fully kept industry groups and government informed at every stage”.

Energy Minister McCluskey said the NAO report revealed “unacceptable, systemic failures” left by the previous government.

He said there would be “comprehensive reforms” and “clear lines of responsibility” in the future.