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62nd Report - Faulty energy efficiency installations

Public Accounts Committee HC 1229 Published 23 January 2026
Report Status
Government responded
Conclusions & Recommendations
39 items (19 recs)
Government Response
AI assessment · 37 of 39 classified
Accepted 9
Accepted in Part 2
Acknowledged 1
Deferred 3
Not Addressed 12
Rejected 10
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Recommendations

19 results
2 Accepted in Part

Set out plans to scale-up the find-and-fix programme for faulty home insulation.

Recommendation
Nearly one year after the problems emerged, around 3,000 homes with defects had been found and fixed out of the more than 30,000 homes estimate to be affected. TrustMark, the government-endorsed quality scheme, did not notify the Department of high … Read more
Government Response Summary
The government accepted the recommendation in part, confirming the find-and-fix programme reached full operational delivery in January 2026, aiming for completion by May 2027, and detailing how faulty internal wall insulation cases will be addressed. However, it stated that delivering the programme on a significantly shorter timescale is unlikely due to constraints, though opportunities will be sought to reduce it.
HM Treasury
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3 Accepted

Update how to protect households from unaffordable repair bills when guarantees are insufficient.

Recommendation
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 … Read more
Government Response Summary
The government accepted the recommendation, stating that it provided responses to the Committee's three requests via a letter on 6 February 2026.
HM Treasury
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4 Accepted

Review risk management and internal escalation systems to swiftly address scheme issues.

Recommendation
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 … Read more
Government Response 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 servant now observing on the TrustMark board.
HM Treasury
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5 Accepted

Publish an annual report to Parliament on all retrofit schemes, non-compliance and fraud.

Recommendation
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 … Read more
Government Response 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 fraud for new and existing schemes.
HM Treasury
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6 Rejected

Ensure one body is responsible for fraud prevention and detection in future schemes.

Recommendation
The Department did not give the risk of fraud appropriate priority, and it is likely that the known levels of fraud are a significant under-statement of the true level of fraud. No single organisation has overall responsibility for preventing and … Read more
Government Response Summary
The government rejected the recommendation to work with the Serious Fraud Office, stating that investigating suspected fraud is already Ofgem's responsibility and referrals have been made. For the other points about fraud risk assessment and prevention, the government agreed that existing standards and guidance already cover these.
HM Treasury
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7 Accepted

Prioritise robust customer protection and remediation for all government-funded retrofit schemes

Recommendation
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 … Read more
Government Response 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.
HM Treasury
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10 Rejected

Audits reveal widespread performance and safety defects in wall insulation installations

Recommendation
The audits found: • 98% of homes with external wall insulation have major issues: 92% have defects that will negatively affect the insulation’s performance, often creating the risk of water ingress and mould; 6% have immediate health and safety risks, … Read more
Government Response Summary
The government disagrees with the recommendation to supervise and check every new external or internal wall insulation project by an independent, competent, and accountable person, but states that it has greater confidence in local authority delivered retrofit programs and is implementing improvements to the compliance system.
HM Treasury
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11 Rejected

Department accepts unacceptable spectrum of failures in insulation causing health risks

Recommendation
The Department stressed to us that these failures include a spectrum of issues, from not getting the full benefit of a measure because of gaps in the insulation, through to more serious failings that have caused damp or mould or … Read more
Government Response Summary
The government disagrees with the recommendation to supervise and check every new external or internal wall insulation project by an independent, competent, and accountable person, but states that it has greater confidence in local authority delivered retrofit programs and is implementing improvements to the compliance system.
HM Treasury
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12 Rejected

Faulty installations cause severe physical, emotional, and financial distress for households

Recommendation
Faulty installations can have wider impacts on households, beyond just living in unsafe, damp or mouldy homes. Respondents to Ofgem’s survey of people who used its ECO helpline reported being left without central heating over winter and having to seek … Read more
Government Response Summary
The government disagrees with the recommendation to supervise and check every new external or internal wall insulation project by an independent, competent, and accountable person, but states that it has greater confidence in local authority delivered retrofit programs and is implementing improvements to the compliance system.
HM Treasury
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14 Rejected

Less than 10% of homes with major insulation issues remediated after one year

Recommendation
The National Audit Office reported that, as of 11 September 2025, 2,934 homes with external and internal wall insulation with major issues had been remediated.25 This means less than 10% of the estimated 32,000 to 35,000 homes with major issues … Read more
Government Response Summary
The government disagrees with the recommendation to supervise and check every new external or internal wall insulation project by an independent, competent, and accountable person, but states that it has greater confidence in local authority delivered retrofit programs and is implementing improvements to the compliance system.
HM Treasury
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19 Rejected

TrustMark lacks direct collaboration with Companies House to prevent directors avoiding remediation responsibilities.

Recommendation
The National Audit Office also reported that some company directors are closing and restarting their businesses to avoid remediation responsibilities.40 TrustMark told us it has developed a watchlist and can stop a new business operating until it has fixed the … Read more
Government Response Summary
The government disagrees with the recommendation to only allow new external or internal wall insulation to be installed through retrofit schemes if supervised and checked by someone who is independent, competent and accountable, as they have greater confidence in the quality of installation and compliance in local authority delivered retrofit programmes.
HM Treasury
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25 Accepted

Ensure Government steps in to remediate defects when other avenues are exhausted.

Recommendation
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 … Read more
Government Response 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.
HM Treasury
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27 Accepted

Department provided limited oversight and influence over ECO4 and GBIS schemes.

Recommendation
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. … Read more
Government Response 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.
HM Treasury
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29 Accepted

Department failed to act sufficiently on identified quality risks in its programme register.

Recommendation
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 … Read more
Government Response 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 track progress which includes Treasury and NISTA representation, as well as an external expert panel.
HM Treasury
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30 Accepted

Consumer protection and quality assurance system for ECO4 and GBIS is overly complex.

Recommendation
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 … Read more
Government Response 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.
HM Treasury
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33 Rejected

Department failed to complete a full fraud risk assessment before ECO4 implementation.

Recommendation
The Department did not complete a full fraud risk assessment before ECO4 was implemented in 2022. This became a mandatory requirement in Managing Public Money for any new major area of spend in March 2022, but it would still have … Read more
Government Response Summary
The government disagrees with referring the issue to the Serious Fraud Office, stating that Ofgem has the responsibility for exploring cases of suspected fraud and can make referrals where appropriate.
HM Treasury
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34 Rejected

No single organisation holds overall responsibility for preventing fraud in ECO4 and GBIS.

Recommendation
The Department explained that no single organisation has overall responsibility for preventing and detecting fraud on ECO4 and GBIS.79 Ofgem’s role in relation to fraud is limited to progressing counter-fraud investigations where allegations have been made.80 Ofgem explained to us … Read more
Government Response Summary
The government disagrees with referring the issue of fraud to the Serious Fraud Office, stating Ofgem already has the responsibility to explore suspected fraud and make referrals where appropriate. The department will prioritise deterrence and prevention, before harm is done.
HM Treasury
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35 Rejected

Organisations lack requirement to proactively seek fraud, hindered by poor information sharing.

Recommendation
Ofgem relies on energy suppliers, TrustMark, certification bodies and scheme providers to alert it to any suspicions of fraud. However, while these bodies have responsibilities to report fraud that they have identified, they 76 Qq 20, 28, 56; Letter from … Read more
Government Response Summary
The government disagrees with referring the issue to the Serious Fraud Office, stating that Ofgem has the responsibility for exploring cases of suspected fraud and can make referrals where appropriate.
HM Treasury
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36 Rejected

Fraud likely contributes to high defect levels; Department enhancing fraud detection efforts.

Recommendation
We pushed Ofgem and the Department on what they were doing to actively look for fraud, and highlighted that fraud is likely contributing to the high level of defects on external and internal wall insulation.85 Written evidence submitted by members … Read more
Government Response Summary
The government disagrees with referring the issue of fraud to the Serious Fraud Office, stating that Ofgem already has the responsibility to explore suspected fraud cases and make referrals to relevant bodies.
HM Treasury
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Conclusions (20)

Observations and findings
1 Conclusion Accepted in Part
On the basis of a deeply concerning report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) and Ofgem to find out why an estimated 98% of external wall insulation and around a third (29%) of internal wall insulation …
Government Response Summary
The government disagreed with the committee's conclusion that failings undermine confidence in all retrofit schemes, stating it has greater confidence in local authority-delivered programmes. However, it accepted the severity of issues within ECO4 and GBIS, detailing multiple actions taken including offering audits, strengthening the consumer protection system, and implementing new oversight and enforcement measures.
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8 Conclusion
We have received written submissions from a range of sources including voluntary sector organisations, local authorities, industry representatives and commercial organisations, and households that have been affected by poor quality work under ECO. A full list of the written evidence we received is available on the Committee’s website.13 Particular issues …
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9 Conclusion
The Department and Ofgem believe that an estimated 98% of external wall insulation and around a third (29%) of internal wall insulation fitted under ECO4 and GBIS up to mid-January 2025 have major issues that need fixing. Between 32,000 and 35,000 homes are likely to be affected. This is based …
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13 Conclusion Not Addressed
To limit further faulty installations, the Department asked the certification bodies and scheme providers, via TrustMark, to suspend installer businesses based on their failure rate. By the end of January 2025, 38 installers had been suspended, preventing them from carrying out new work of this kind under government schemes.22 The …
Government Response Summary
The response addresses a different recommendation regarding a blanket ban on external/internal wall insulation installations, not the specific issues raised in this conclusion about the suspension and reinstatement of installers.
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15 Conclusion Not Addressed
Delays in finding and fixing these homes increase the risk of damage to the property, including damp and mould, and leave people in homes with unaddressed health and safety risks.29 We asked the witnesses how they would make sure the remaining faulty installations would be found and fixed in a …
Government Response Summary
The response addresses a different recommendation regarding a blanket ban on external/internal wall insulation installations, not the specific issues raised in this conclusion about delays in finding and fixing faulty installations.
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16 Conclusion Not Addressed
The Department and TrustMark told us that TrustMark would oversee a find-and-fix process for homes with external wall insulation. It would offer audits to all homes with external wall insulation installed through ECO4 or GBIS, provide direct oversight to ensure the work is corrected, and work with local communities to …
Government Response Summary
The response addresses a different recommendation regarding a blanket ban on external/internal wall insulation installations, not the specific issues raised in this conclusion about the TrustMark find-and-fix process and optimistic timescales.
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17 Conclusion Not Addressed
The Department told us that it plans to identify faulty internal wall insulation through existing audit processes. First, TrustMark and the certification bodies continue to conduct business-as-usual audits. Second, households with concerns can contact their installer and certification body, or the ECO contact centre run by Ofgem, through which calls …
Government Response Summary
The response addresses a different recommendation regarding a blanket ban on external/internal wall insulation installations, not the specific issues raised in this conclusion about identifying faulty internal wall insulation.
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18 Conclusion Not Addressed
The original installer is liable for fixing the installation to meet the relevant standards. However, the National Audit Office reported that not all installers are complying with the remediation process.38 We asked TrustMark whether the process for installer businesses to become TrustMark-registered (and therefore be able to do work under …
Government Response Summary
The response addresses a different recommendation regarding a blanket ban on external/internal wall insulation installations, not the specific issues raised in this conclusion about the financial stability of installer businesses.
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20 Conclusion Not Addressed
Written evidence submitted to us by the Green Homes Group highlighted how some people are unlikely to trust the original installer to fix the issues they created.42 The Department said it is providing assurance to households by ensuring the installer is appropriately certified as competent to do the work, and …
Government Response Summary
The government states that all EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years.
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21 Conclusion Not Addressed
If the installer has ceased to trade or fails to fix the issues, remediation costs up to £20,000 should be covered by a guarantee.44 TrustMark confirmed in follow-up correspondence that these policies do not cover compensation for ill health or loss of earnings that might arise as a consequence of …
Government Response Summary
The government states that all EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years.
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22 Conclusion Not Addressed
TrustMark told us that three organisations provided the bulk of the cover.47 In written evidence provided after the oral evidence session, the Department confirmed that the guarantee market for solid wall insulation is limited to three companies: QualityMark Protection, which provides regulated insurance-backed guarantees through SafeWorld; and SWIGA and CIGA/IAA, …
Government Response Summary
The government states that all EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years.
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23 Conclusion Not Addressed
We asked the witnesses whether they had analysed the guarantee policy wording to ensure they did not include excesses or complex issues that render them useless in practice, or had reviewed the balance sheets of the 39 Q 64 40 C&AG’s Report, para 16 41 Qq 59, 60 42 FEE023 …
Government Response Summary
The government states that all EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years.
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24 Conclusion Not Addressed
Where guarantees are invoked, the repairs will likely in some cases cost more than the £20,000 covered by guarantee. TrustMark advises it should normally cost between £250 and £18,000 per home to correct the faulty installations, if it can be done before major damage occurs. However, in the worst case …
Government Response Summary
The government states that all EWI and IWI measures installed under ECO4 and GBIS schemes should have a guarantee that lasts for 25 years.
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26 Conclusion Acknowledged
It is not clear the future retrofit market will be big enough to sustain businesses to meet the level of remediation required. Since we took evidence in November 2025, the government announced that it would end ECO, with no levies on bills from April 2026. It said it would continue …
Government Response Summary
The government announced it would end ECO, with no levies on consumer bills from April 2026, but that it would continue to invest in tackling fuel poverty through its Warm Homes Plan; however, it had not yet formally confirmed whether it would extend the period for suppliers to meet their existing ECO4 obligations beyond March 2026.
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28 Conclusion 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 …
Government Response 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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31 Conclusion Not Addressed
The Department told us it designed the consumer protection and quality assurance system in response to the 2016 Each Home Counts review, introducing a single quality mark (delivered by TrustMark) and higher standards that consider multi-measure retrofits in the context of the whole home.69 It told us that the new …
Government Response Summary
The response addresses a different recommendation, regarding an annual report on retrofit schemes, and not the conclusion about the complex consumer protection and quality assurance system.
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32 Conclusion Not Addressed
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. • …
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.
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37 Conclusion Deferred
Written evidence from the Royal Institution of Chartered Surveyors, the End Fuel Poverty Coalition, AgilityEco and the Green Homes Group told us how the failures with ECO are undermining public confidence in retrofits, potentially with negative impacts on our ability to reduce both fuel poverty and carbon emissions.88 The Department …
Government Response Summary
The government refers to its response to recommendation 2, highlighting the 'find-and-fix' programme and the letter to the Committee dated 6 February 2026 addressing recommendation 3, stating that their approach of holding the system to account will continue after the ECO4 scheme has ended.
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38 Conclusion Deferred
We pressed the Department on a key outstanding design flaw: retrofit assessors (who provide information about a home’s energy performance) and retrofit coordinators (who manage the project and should check the retrofit is completed to the correct standards) can be appointed and contracted by the installer they are assessing.93 The …
Government Response Summary
The government refers to its response to recommendation 2, highlighting the 'find-and-fix' programme and the letter to the Committee dated 6 February 2026 addressing recommendation 3, stating that their approach of holding the system to account will continue after the ECO4 scheme has ended.
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39 Conclusion Deferred
Ultimately, the Department made its position very clear. It told us there were “serious failings at every level of the system that are systemic” and that it intends to reform the system to better protect consumers.97 Since we took evidence in November 2025, the government announced that it would end …
Government Response Summary
The government refers to its response to recommendation 2, highlighting the 'find-and-fix' programme and the letter to the Committee dated 6 February 2026 addressing recommendation 3, stating that their approach of holding the system to account will continue after the ECO4 scheme has ended.
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