Source · Select Committees · Public Accounts Committee
Recommendation 32
32
Not Addressed
Organisations within the system failed to adequately warn Department about risks and flaws.
Conclusion
We asked the witnesses why no-one warned the Department about the risks or flaws with the system it had designed, or considered whether the system as a whole was protecting consumers.72 While TrustMark accepted it should have done much more, Ofgem highlighted their limited role within the flawed system. • Ofgem accepted that the measures are complex to oversee and deliver, and that the supply chain is very complex, but it told us that the Department was responsible for the design of the scheme, including decisions on how to assess fraud.73 • TrustMark explained to us that, with hindsight, the move from a single-to multi-measure scheme introduced challenges and delivery complications, and therefore risk. It accepted it should have recognised during the design phase that the system under-estimated the level of risk involved,74 and they did not have the resources or digital infrastructure to do it at the time the scheme was launched.75 They and the Department should have recognised this and remediated this short coming much sooner. • UKAS explained to us that the level of audit required of certification bodies for new installers assumed a low level of risk, but that it ought to assume a high level of risk given what we now know. 68 Qq 16, 17 69 Department for Business, Energy & Industrial Strategy and Department for Communities & Local Government, Each Home Counts, December 2016. 70 Q 91 71 Qq 93, 144, 149 72 Qq 3, 18, 29, 56 73 Q 128 74 Qq 2, 14 75 Qq 2, 14; C&AG’s Report, para 21 20 Even though the audit level is set by the Department and not UKAS, we challenged that UKAS should have identified and raised the issue with the Department. UKAS told us it did so but confirmed in follow- up correspondence to us that this was not until February 2025. UKAS apologised for its “role within the system”.76 Insufficient focus on fraud risk
Government Response Summary
The response addresses a different recommendation, regarding an annual report on retrofit schemes, and not the conclusion about lack of warnings about the risks or flaws of the system.
Government Response
Not Addressed
HM Government
Not Addressed
5. PAC conclusion: 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. 5. PAC 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 the schemes are working as intended. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Autumn 2027 5.2 The department will publish an annual report to Parliament on retrofit schemes, with the first publication before Autumn 2027. To align with the National Audit Office recommendation, this will be included in the department’s Annual Report and Accounts. The department’s Annual Report and Accounts sets out DESNZ’s approach to managing fraud and error, including counter-fraud governance and capability, risk management across major schemes. 5.3 The department has assessed the quality assurance processes in use across retrofit schemes to establish which quality metrics are currently being measured and how frequently. Based on the lessons learned from ECO4 and GBIS, the department intends to establish a standard methodology for measuring and reporting on error and fraud, which will be used for all new schemes. Where it is feasible and represents value for money to do so, the department will assess existing retrofit schemes against this methodology.