Almost every home fitted with external wall insulation under the government’s flagship ECO energy scheme is riddled with serious faults — with thousands now facing damp, mould and potential health risks.
A damning National Audit Office (NAO) report has found that 98% of installations carried out under the Department for Energy Security and Net Zero’s (DESNZ) programme need major repair work.
The failures stretch across more than 20,000 homes — a shocking indictment of the government’s promise to make Britain’s housing stock warmer and greener.
The watchdog says poor workmanship, weak oversight and a broken consumer protection system have left families exposed to shoddy, unsafe work funded by their own energy bills.
NAO head Gareth Davies warned: “DESNZ must now ensure that businesses meet their obligations to repair all affected homes as quickly as possible. It must also reform the system so that this cannot happen again.”
The Energy Company Obligation (ECO) scheme was meant to help tackle fuel poverty and reduce carbon emissions by forcing energy firms to fund insulation and efficiency measures. Instead, it has created an expensive mess.
The report found that almost all external wall insulation jobs and around 30% of internal ones were so poor they now require fixing. A small number are deemed an immediate health and safety risk.
Investigators discovered that unqualified subcontractors, confused standards and firms “cutting corners” were common causes of the widespread failings.
Fraud
Even worse, the NAO revealed potential fraud — with Ofgem estimating that between £56 million and £165 million may have been falsely claimed for work on as many as 16,500 homes.
The government’s own consumer protection system, launched in 2021 and run by TrustMark, failed to spot the problem.
DESNZ was not alerted to the scale of the disaster until late 2024 — months after the media had already reported on families living in damp, mouldy homes.
TrustMark’s limited funding meant its data and monitoring systems were only fully operational by the end of last year. In the meantime, installers exploited loopholes to “game” the system and avoid scrutiny.
Expensive repairs
DESNZ and Ofgem have now suspended the worst offenders and promised to repair affected properties but the scale of the job remains unclear.
The NAO says ministers must take full responsibility for the ECO scheme, clarify how and when faulty installations will be fixed and publish annual data on fraud and non-compliance.
It’s yet another costly warning for a department that’s meant to lead Britain’s green transition. As Davies put it, “ECO and other such schemes are vital — but the failures in design and oversight have left households worse off, not better.”
Insulation fitted under ECO a mould ridden disaster appeared first on Energy Live News.