Recommendations & Conclusions
9 items
3
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
Households do not have real assurance the government will protect them from unaffordable bills when the original installer or guarantees do not cover the cost of repairs. Ministers have stated that no household should have to pay to fix the issues. The original installer is liable for fixing the installation …
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Households do not have real assurance the government will protect them from unaffordable bills when the original installer or guarantees do not cover the cost of repairs. Ministers have stated that no household should have to pay to fix the issues. The original installer is liable for fixing the installation and costs up to £20,000 should be covered by a guarantee when the installer has ceased to trade or fails to remediate. This process leaves some households unprotected. Remediation costs will sometimes exceed the guarantee cap. It should normally cost between £250 and £18,000 per home to correct the installation, but in the worst case we are aware of it cost over £250,000 to fix the defects and resultant damage. We are sceptical that the original installers and the guarantee providers will be able to withstand the potential scale of claims. Households have not yet claimed on guarantees in large numbers, but not all installers are complying with the remediation process, and some company directors are closing and restarting their businesses to avoid remediation responsibilities. The Department plans to bring ECO partners together to find bespoke solutions for the “very small number” of households it anticipates will not be sufficiently covered under standard processes. We find neither the Department’s proposed solution nor its downplaying of the likely scale 4 of the problem at all credible. Since we took evidence in November 2025, the government has announced that it will end ECO. There will be no additional obligation beyond the existing ECO4 and GBIS targets and no levy on bills from April 2026, although the Department is yet to confirm whether it will extend the period for suppliers to meet their existing ECO4 obligations beyond March 2026. We are concerned there may not be a big enough retrofit market once ECO ends to ensure enough installers remain viable businesses able to complete the remediation. recommendation Given the urgency of this matter, the Departm
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Government response AI summary
The government accepted the recommendation, stating that it provided responses to the Committee's three requests via a letter on 6 February 2026.
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HM Treasury
4
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The Department’s senior officials took two years to recognise the scale of the problems, which led to many faulty installations that could have been avoided. This is unacceptable and demonstrates very poor overall supervision. The Department acted in October 2024 when TrustMark informed it of analysis indicating high levels of …
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The Department’s senior officials took two years to recognise the scale of the problems, which led to many faulty installations that could have been avoided. This is unacceptable and demonstrates very poor overall supervision. The Department acted in October 2024 when TrustMark informed it of analysis indicating high levels of non-compliance with quality standards in external wall insulation. TrustMark only developed the analytical capabilities for interrogating its data and producing this kind of analysis in the latter half of 2024–prior to this it did not have the resources or systems to oversee what was happening on the ground. The Department should have done the due diligence on this before Trustmark were appointed to this role, however, the Department had access to other information that should have alerted it to the potential issues much earlier given that the ECO4 scheme started in April 2022. For example, TrustMark told us it had been sharing the results of its audits with the Department from 2022 and that when it started to identify the increased risk from 2023 into 2024, it undertook more audits to better 5 understand the level of risk. The Department’s failure to take minutes of its meetings with TrustMark meant it was unable to defend its position that it had not been alerted sooner. The Department also had risks to quality, assessments and standards on its programme risk register since November 2022 but did not take any proactive steps to prevent the risks materialising in the first place or escalate the risks appropriately. The Department gave the scheme virtually no senior level attention and should have carried out far more investigations much sooner. Its poor oversight of ECO4 and GBIS meant that senior leaders had assumed the quality assurance system was working when it was not. recommendation The Department should review its risk management and internal escalation systems so that issues identified within specific schemes are escalated swiftly and
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Government response AI summary
The government accepted the recommendation, stating that risk management and escalation within DESNZ are managed through formal governance. In response to issues, they have established an internal programme board, an external expert panel, and a project board for the find-and-fix programme, with a senior civil …
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HM Treasury
5
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The Department’s system of quality assurance and consumer protection was far too complicated, and organisations within it focused too much on their own tasks rather than whether the system was protecting consumers. The ECO schemes and the retrofit quality assurance and consumer protection system combine to make a system that …
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The Department’s system of quality assurance and consumer protection was far too complicated, and organisations within it focused too much on their own tasks rather than whether the system was protecting consumers. The ECO schemes and the retrofit quality assurance and consumer protection system combine to make a system that is too layered, fragmented and complicated. The Department accepts there were “serious failings at every level” and the system “has not provided the protection that consumers deserve”. Responsibilities were unclear and organisations focussed on their individual roles within the complex system, rather than taking a step back to critically assess the system and identify risks and design flaws. For example, none of the expert organisations involved spotted that the move from a single- measure to multi-measure scheme would add delivery complications and therefore risk. TrustMark accepts it should have realised much sooner that the system design under-estimated the level of risk involved. The United Kingdom Accreditation Service (UKAS), which accredits the retrofit installer certification bodies, apologises for its “role within the system”. We welcome the organisations accepting some responsibility, but it is not good enough for organisations holding so much expertise and knowledge to say they delivered on their specific responsibilities and instead blame the system of which they were a key part. recommendation The Department should publish an annual report to Parliament on all its retrofit schemes, their level of non-compliance and estimated fraud, and whether or not the schemes are working as intended. 6
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Government response AI summary
The government accepted the recommendation, committing to publishing an annual report to Parliament on retrofit schemes, non-compliance, and estimated fraud before Autumn 2027, to be included in the department’s Annual Report and Accounts. It will also establish a standard methodology for reporting on error and …
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HM Treasury
7
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The serious failings to protect consumers on these schemes risk undermining confidence in all the Department’s retrofit schemes. The Department believes it is rebuilding confidence through the steps it has taken to date, such as suspending 38 installer businesses, implementing a “robust” reinstatement process, and requiring retrofit coordinators to visit …
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The serious failings to protect consumers on these schemes risk undermining confidence in all the Department’s retrofit schemes. The Department believes it is rebuilding confidence through the steps it has taken to date, such as suspending 38 installer businesses, implementing a “robust” reinstatement process, and requiring retrofit coordinators to visit 7 each site in person. We are extremely sceptical that the changes so far are sufficient, especially given the low level of remediation that has taken place to date. For example, there is still no requirement for the retrofit coordinator to be independent of the installer, so the person who is meant to check the retrofit has been completed to the correct standard can be appointed by the installer they are assessing. The Department needs to make further changes before it can be confident there will be no more faulty installations under the current system. Since we took evidence in November 2025, the government announced that it would not continue ECO after the current schemes end, but that it would continue to invest in tackling fuel poverty through its Warm Homes Plan. It is vital, given the Departments strong statement that in the last resort it will stand by householders to ensure their homes are remediated that high priority is given to this pledge even after the scheme ends. The Department accepts that wholesale reform of the system is ultimately required to ensure customer protection and restore the public’s confidence in retrofits. It intends to deliver this reform in line with three principles: the system must be simpler and clearer; there must be stronger central oversight; and there must be clear accountability, redress and remediation when things go wrong. The public have a right to expect that where work is funded by government grant that the government effectively guarantee the work will be done correctly and put right if not. recommendation a. The Department should give high priority to ensuring—and ind
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Government response AI summary
The government accepted the recommendation, affirming high priority for the find-and-fix programme and committing to wholesale reform of the consumer protection system as outlined in the Warm Homes Plan, including developing new competency frameworks.
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HM Treasury
25
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The Department told us that the Ministers are very clear these problems must be fixed at no cost to households who have done nothing wrong. It told us it expects only a “very small number” of homes to not be remediated by the original installer or covered by the guarantee. …
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The Department told us that the Ministers are very clear these problems must be fixed at no cost to households who have done nothing wrong. It told us it expects only a “very small number” of homes to not be remediated by the original installer or covered by the guarantee. The Department told us it is “working hard to drive the system so that all parties come together” to identify bespoke solutions for these most challenging cases.52 We call on the Government where all other avenues have been exhausted to step in and ensure the defects are remediated even though they have now closed this scheme.
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Government response AI summary
The government agrees with the recommendation to step in and ensure defects are remediated where all other avenues have been exhausted, even though the scheme has closed.
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HM Treasury
27
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The National Audit Office reported that the Department designed both ECO and the consumer protection and quality assurance system to operate at arm’s length from government, and that the Department gave itself limited oversight and influence of ECO4 and GBIS. It concluded that the Department and Ofgem took quick action …
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The National Audit Office reported that the Department designed both ECO and the consumer protection and quality assurance system to operate at arm’s length from government, and that the Department gave itself limited oversight and influence of ECO4 and GBIS. It concluded that the Department and Ofgem took quick action but this was only after TrustMark shared its analysis of high levels of non-compliance with quality standards in external wall insulation in October 2024.56 Witnesses at our oral evidence session indicated that other information should have alerted the Department to the issues much earlier.57 The National Audit Office concluded that the Department did not fully use the levers it did have to oversee ECO4 and GBIS, and that its poor oversight of the schemes meant senior officials assumed the quality assurance system was working when it was not.58 The Department accepted that it should have been more questioning and given the schemes more oversight, and that there were not enough installation checks.59
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Government response AI summary
The government will publish an annual report to Parliament on its retrofit schemes, their level of non-compliance and estimated fraud, and whether the schemes are working as intended, starting before Autumn 2027. This will be included in the department's Annual Report and Accounts.
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HM Treasury
28
Conclusion
62nd Report - Faulty energy efficiency …
Accepted
The National Audit Office reported that TrustMark only developed the analytical capabilities for identifying non-compliance trends in the latter half of 2024. Its funding model meant it did not have the free cashflow to develop these capabilities sooner.60 However, TrustMark told us it had been sharing the results of its …
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The National Audit Office reported that TrustMark only developed the analytical capabilities for identifying non-compliance trends in the latter half of 2024. Its funding model meant it did not have the free cashflow to develop these capabilities sooner.60 However, TrustMark told us it had been sharing the results of its audits with the Department in regular meetings since 2022, and started to identify the increased risk from 2023 into 2024, at which point it undertook more audits to better understand the level of risk.61 The Department believes that the Autumn and Winter of 2023–24 is also when the issues likely first became visible, after a ramp up of installations in the spring of 2023.62 UKAS and the Department also both told us that the intelligence that was available (for example data on installations, audit results and consumer complaints) was not being escalated or drawn together as it should have been to understand levels of 56 C&AG’s Report, paras 19 and 3.5 57 Qq 49, 52,55, 115, 116 58 C&AG’s Report, para 3.6 59 Q 89, 116, 117 60 C&AG’s Report, para 21 61 Qq 49, 52 62 Q 115 18 risk and non-compliance.63 Neither TrustMark nor DESNZ have been able to provide minutes of meetings which took place between 2022 and 2024, and the Department has written to us to say that it has no evidence that it was notified earlier than October 2024.
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Government response AI summary
The government agreed with the Committee’s recommendation. TrustMark reached full operational delivery of the find-and-fix programme in late January 2026 and currently intend for the programme to complete by May 2027 in line with ECO4 closure timeframes.
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HM Treasury
29
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
Since November 2022, the Department’s programme risk register had included risks to quality, assessments and standards, yet the Department did not take sufficient action to check whether the risks were materialising, to prevent them from happening, or to escalate the risks appropriately. In November 2022, the Department recorded a risk …
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Since November 2022, the Department’s programme risk register had included risks to quality, assessments and standards, yet the Department did not take sufficient action to check whether the risks were materialising, to prevent them from happening, or to escalate the risks appropriately. In November 2022, the Department recorded a risk that TrustMark might not carry out compliance checks on time or to the correct standard. It identified the risk as high impact but “very unlikely” to materialise and therefore judged it was a risk it could tolerate and not escalate to the portfolio level. In June 2023, it identified a risk that failures in the wider compliance and assurance processes could limit installation quality. It judged this risk was of medium impact and “possible” to materialise.64 The National Audit Office found that the Department did not have a dashboard reporting against key delivery risks, and that it only escalated these concerns to its Net Zero Buildings Portfolio Board in January 2025, once they had materialised as issues.65 Complicated and siloed quality assurance and consumer protection system
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Government response AI summary
The government states that risk management and escalation is already managed through formal governance across projects, schemes and portfolios, with risks escalated as appropriate. The department is committed to reform of our consumer protection system and has set up both an internal programme board to …
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HM Treasury
30
Recommendation
62nd Report - Faulty energy efficiency …
Accepted
The National Audit Office’s report considered by the Committee concluded that ECO4 and GBIS combined with the consumer protection and quality assurance system resulted in an overly complex system, with many different actors. It reported that nobody spoken to during its investigation could give a comprehensive explanation of how the …
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The National Audit Office’s report considered by the Committee concluded that ECO4 and GBIS combined with the consumer protection and quality assurance system resulted in an overly complex system, with many different actors. It reported that nobody spoken to during its investigation could give a comprehensive explanation of how the system was meant to work, and that there was no central document clearly setting out how the system should operate across the different organisations and processes.66 In their written evidence submissions to us, Severn Wye Energy Agency, Fuel Poverty Action, Kingspan Insulation Ltd and UKAS identified this fragmentation and complexity as a contributing factor to the high level of faulty installations, as well as the difficulty people subsequently face in getting the defects fixed.67 UKAS described a “multi-tiered system” comprising “the accreditation; we accredit the certification bodies. 63 Qq 55, 116 64 C&AG’s Report, para 1.8 65 C&AG’s Report, para 3.5 and Figure 5 66 C&AG’s Report, para 3.8 67 FEE0003, FEE0025, FEE0010, FEE0022 19 The certification bodies then certify the installers. Those certification bodies are also TrustMark scheme providers. Then there is the installer and the retrofit co-ordinator—[ … ]” which “can work if there is a shared understanding of the mission and the risk that relates to it”.68
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Government response AI summary
The Department will publish an annual report to Parliament on retrofit schemes, with the first publication before Autumn 2027. This will be included in the department’s Annual Report and Accounts.
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HM Treasury