A damning report by the Public Accounts Committee (PAC) has urged the government to refer the £4.6 billion home insulation scheme to the Serious Fraud Office, after it left over 30,000 properties with major defects. The committee described the scheme as the “most catastrophic fiasco” that had “failed at every level”.
The Energy Company Obligation (ECO) and the Great British Insulation Scheme (GBIS), which aimed to insulate homes with poor energy efficiency, were so poorly designed that they were “almost bound to fail”, according to the parliamentary committee. The report revealed that a staggering 98% of external wall insulation installed up to mid-January 2025 had major defects requiring repair, and some posed immediate health and safety risks.
The committee feared that the scale of the problem may be much larger than currently understood, and called on the Serious Fraud Office to investigate, as it was suspected that fraud may have been involved due to the extremely poor quality of the installations. While energy suppliers bore the costs of the estimated £4.6 billion scheme, the committee warned that the repair costs could ultimately fall on customers.
Sir Geoffrey Clifton-Brown, the PAC chairman, said: “Potentially thousands of people are now living with health and safety risks in their homes and despite government’s protestations, we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective work.”
The revelations come at a particularly difficult time for the Energy Security and Net Zero department, which is already facing criticism over its handling of the crisis. Ed Miliband, the shadow secretary, had recently announced a £15 billion Warm Homes Plan to roll out solar panels, heat pumps and insulation, but the latest scandal is likely to undermine public confidence in such retrofit schemes.
A spokesperson for the department acknowledged the issues but insisted that there were no widespread health and safety risks, stating that “for the vast majority, this means a home may not be as energy efficient as it should be.” However, the committee’s findings suggest that the government has a significant challenge ahead to restore public trust and ensure that homes are properly insulated and safe.
