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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
Filter by: Clear

Recommendations

10 results
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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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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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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