Source · Select Committees · Public Accounts Committee

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)

Source

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Government Response

AI assessment · 37 of 39 classified

Accepted 9

Accepted in Part 2

Acknowledged 1

Deferred 3

Not Addressed 12

Rejected 10

Recommendations

8 results

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 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 Show less

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 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 Show less

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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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 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 Show less

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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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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Conclusions (1)

Observations and findings

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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