Recommendation 1

HM Government Accepted in Part

The government disagrees with the Committee’s recommendation. The extent and scale of non-compliant external and internal wall insulation under the ECO4 scheme was unacceptable and must never be repeated. The department has greater confidence in the quality of installation and compliance in local authority delivered retrofit programmes and therefore disagree with the recommendation insofar as it relates to schemes other than ECO4 and GBIS. Every household with external wall insulation (EWI) installed under ECO4 and GBIS is being and will be offered an on-site audit. Subject to the householder accepting the offer, all EWI installed under ECO4 and GBIS will be checked by an independent, trained and accountable auditor. All households that received internal wall insulation (IWI) under ECO4 and GBIS are being written to and can raise concerns and request an audit via the Ofgem contact centre, which will be subject to triage. Where cases meet the threshold of risk factors, households are referred for an on-site audit by an independent, trained and accountable auditor. This includes all ongoing installations. This approach manages priorities and audit capacity in a practical way, taking account of the measured rates of non-compliance. All EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years, meaning should issues be found in the future, the protections within the guarantee can be invoked within this timeframe. The non-compliance rates found under ECO4 and GBIS for EWI and IWI are not replicated in government-funded capital schemes. In October 2025, the department published audit results for the Social Housing Decarbonisation Fund (SHDF) Wave 2 and the Home Upgrade Grant Phase 2 (HUG 2) showing a 0.7% category 1 and 9% major non-compliance rate for all measures and 0% category 1 and 11.7% major non-compliance for solid wall insulation. The system in place for these schemes is much more effective in managing compliance due to the additional controls from Local Authorities and Housing Associations, including mandatory audits from Grant Recipients, as well as separate independent audits by the delivery partner PWC. There is no evidence to require an onsite audit for all solid wall insulation installations under government-funded capital schemes. Where there are non- compliances, the Grant Recipients are responsible for resolving these issues through working with their supply chain as well as supporting residents through the IBG process if necessary. The department is confident that when non-compliance is identified it is swiftly resolved without intervention from the department due to existing checks and the department monitors this process directly when non-compliances are identified through our delivery partners. In addition to the ongoing programme of onsite audits, the department continues to implement improvements to the current system of compliance, assurance and wider consumer protections. Improvements include: • Updated standards to both require a higher level of qualification for retrofit designers and to require site visits from retrofit co-ordinators for all high-risk measures. This includes installations of EWI and IWI, giving an additional layer of on-site assurance. • TrustMark and certification bodies using suspension as a penalty and therefore a deterrent. • Enhanced checks and increased oversight of contractors by energy suppliers; • Greater oversight by the department of TrustMark’s operations; • Frequent and regular focussed engagement between the department and all parties in the system of oversight and compliance; • New restrictions preventing installers from evading accountability by operating through multiple certification bodies; • Changes to the ECO4 legislation that gave Ofgem the ability to reject measures, installed after the date of the changes, found to be non-compliant with PAS2030/2035; and • Measures found to be non-compliant can be rejected by Ofgem, if the lodgement has first been voided by TrustMark within the data warehouse.