Tens of thousands of households may still face major repair bills after widespread defects were found in homes insulated under a government-backed energy efficiency scheme, according to a new report by MPs.
The Public Accounts Committee said more than 30,000 homes were left with faults following work carried out through the Energy Company Obligation (ECO), a scheme designed to improve energy efficiency. It warned that families have no firm guarantee they will be protected from the cost of fixing damage, despite ministerial assurances.
The committee’s findings build on earlier work by the National Audit Office (NAO), which reported last year that 98% of external wall insulation and 29% of internal wall insulation installed up to mid-January 2025 were defective. The faults were found to pose immediate health and safety risks.
Under current arrangements, responsibility for repairs rests with the original installer. If an installer is unable or unwilling to carry out the work, a guarantee is meant to cover costs up to £20,000. The committee said this cap could be insufficient, citing cases where damage has been assessed at more than £250,000. It also questioned whether installers and guarantee providers could cope with the volume of potential claims.
The report said progress in identifying and fixing affected homes has been slow. TrustMark, the government-endorsed quality scheme, aims to audit all relevant properties within 15 months from November 2025. By mid-September 2025, fewer than 10% of the estimated affected homes had been identified and remediated.
MPs also raised concerns about fraud within the scheme. Ofgem has identified fraudulent installations accounting for 1.75% of its total value, but the committee said the true scale is likely to be higher. It recommended that the government refer the matter to the Serious Fraud Office for investigation.
The committee criticised oversight by the Department for Energy Security and Net Zero, saying senior officials took two years to grasp the extent of the problems. It said quality assurance and consumer protection arrangements were overly complex and ineffective.
The report comes as the government prepares to expand other energy efficiency measures under its Warm Homes Plan. The committee said stronger oversight would be essential to avoid a repeat of what it described as a systemic failure.
Chair comment
Sir Geoffrey Clifton-Brown, Chair of the Public Accounts Committee, said:
“I have served on the Public Accounts Committee for twelve years. In all that time, a 98% failure rate in a public sector initiative amounts to the most catastrophic fiasco that I have seen on this Committee.
“Indeed, our report finds the project was doomed to failure from the start. Government behaved inexplicably in redesigning a similar scheme which was working reasonably well into a highly-complex number of organisations with siloed responsibilities, which did not respond to failures anything like quickly enough to prevent damage being done to people’s homes.
“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 works.
“All involved in the system must now move at far greater pace to make good. The public’s confidence will have rightly been shaken in retrofit schemes given what has happened, and government now has a self-inflicted job of work on its hands to restore faith in the action required to bring down bills and reduce emissions.
“Finally – this Committee’s remit is financial scrutiny. We are not a law enforcement body. The sheer levels of non-compliance found here make it clear to us that these matters should be referred to the Serious Fraud Office, and our report recommends as such.”
Read the report here.
