Suspected fraud leaves thousands of homes with shoddy insulation

• Report says over 20,000 homes have poor insulation after having work done under government scheme.
• Insulation businesses and companies ‘gaming the system’.
• Better government oversight and guidance needed for system to improve.

Tens of thousands of households have been left with poor insulation after having work completed under the ECO4 scheme, in part due to weak government regulations and businesses cutting corners during installation, according to a report from the National Audit Office (NAO).

In its report, the NAO said that about 23,000 homes with external wall insulation fitted under ECO4, about 98% of the total, and as many as 13,000 with internal wall insulation, 29% of the total, have “major issues that need fixing”, including mould and damp.

It said the ECO scheme’s shortcomings were due to an unskilled workforce, work being subcontracted to incompetent firms, uncertainty over which standards apply to which jobs and businesses “cutting corners when undertaking design and installation work”.

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On top of that, the NAO also blamed weak government oversight resulting in “widespread issues” with the ECO4 scheme not being identified sooner and “insufficient audit and monitoring” that allowed installers to “game the system”. 

This follows Ofgem estimating that in November 2024, businesses had falsified claims worth as much as £165m from energy suppliers operating under the scheme.

In the report, the NAO recommended that the government “clarify its approach to repairing faulty ECO scheme installations”, reform the consumer protection system for retrofit schemes and report annually on “fraud and non-compliance in each of its retrofit schemes”.

Gareth Davies, head of the NAO, said there had been “clear failures in the design and set-up of ECO4 and in the consumer protection system”. He explained that this had led to “poor quality installations” and “suspected fraud”.

“ECO4 and other such schemes are important to help reduce fuel poverty and meet the government’s ambitions for energy efficiency,” Davies said.

He urged the Department for Energy Security and Net Zero to ensure that businesses “meet their obligations” and “repair all affected homes as quickly as possible; it must also reform the system so that this cannot happen again.”

When contacted by The Eco Experts, Ofgem said it has written to more than 60,000 potentially affected households and set up a dedicated helpline to provide advice and assistance. 

“We will continue to support the government, TrustMark and Certification Bodies in their work to strengthen the protections in place for consumers, and improve communication across the sector in line with the NAO’s recommendations,” the regulator said.

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Written By

Maximilian Schwerdtfeger Content manager

Max joined The Eco Experts as content manager in February 2024. He has written about sustainability issues across numerous industries, including maritime, supply chain, finance, mining, and retail. He has also written extensively for consumer titles like City AM, The Morning Star, and The Daily Express.

In 2020, he covered in detail the International Maritime Organisation’s (IMO) legislation on sulphur emissions and its effects on the global container shipping market as online editor of Port Technology International.

He also explored the initiatives major container ports and terminals have launched in order to ship vital goods across the world without polluting the environment.

Since then, he has reported heavily on the impact made by environmental, social, and governance (ESG) practices on the supply chain of minerals, with a particular focus on rare earth mining in Africa.

As part of this, in 2022 Max visited mines and ports in Angola to hone in on the challenges being faced by one of the world’s biggest producers of rare earth minerals.

His most recent sustainability-related work came much closer to home, as he investigated the eco-challenges faced by independent retailers in the UK, specifically looking at how they can cut emissions and continue to thrive.

Max lives in South London and is an avid reader of books on modern history and ghost stories. He has also recently learned to play the game Mahjong and takes every opportunity to do so. He is also yet to find a sport he doesn’t enjoy watching.

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Reviewed By

Tamara Birch Newsletter and sponsored content editor

Tamara is a London-based journalist and has written about environmental topics for more than four years. This includes advising small business owners on cost-effective ways, like solar panels and energy-efficient products, to help them become more sustainable.

She has used her journalist and research skills to become highly knowledgeable on sustainable initiatives, issues, and solutions to help consumers do their bit for the environment – all while reducing monthly costs.

In addition to adopting sustainable practices in her personal life, Tamara has worked in the retail B2B space to help independent retailers think about their environmental choices and how they can help improve their business. She now uses this knowledge to help consumers do the same.

Her passion for sustainability and eco-friendly solutions stems from a long obsession with nature and animals and ensuring they feel looked after. In her free time, Tamara enjoys reading fantasy novels, visiting the gym, and going on long walks in new areas.

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