More than 30,000 homes insulated under government schemes were botched - but it's the tip of the iceberg, say Burnley campaigners

A National Audit Office report says 98% of homes with external wall insulation under government schemes have issues. These problems can cause damp and mould. Nearly a third (29%) of homes with internal insulation also need repairs.

The ECO4 and Great British Insulation Schemes aim to tackle fuel poverty and were administered by Ofgem. The work took place from April 2022, and both schemes run until March 2026. Billions have been spent on them, with energy companies raising the funds through levies on people’s energy bills.

Poor-quality installations, weak government oversight, and inadequate audit and monitoring caused widespread failures, the NAO reveals.

However, UK residents with cavity wall insulation fitted in earlier ECO schemes have faced the same unresolved issues for more than a decade, warns the SSB Law Victims Support Group. Debra Sofia Magdalene, a spokesperson for the group, says that residents’ living and health conditions have plummeted as a result of these failures, and calls on the NAO to investigate them.

Debra said: “These failures aren’t new. They’ve been repeating for more than a decade. Poor workmanship, lack of oversight, and even suspected fraud have left thousands of families trapped in cold, damp, mould-ridden homes.

“People’s health is suffering. We’re seeing respiratory illness, anxiety, and heartbreak while those responsible walk away unaccountable.

“The National Audit Office must look beyond the latest ECO schemes and investigate the earlier government programmes that set this pattern in motion. Until there’s full accountability, trust in retrofit and net-zero delivery will remain broken.”

Urgent repairs are needed in an estimated 22,000 to 23,000 homes with EWI and 9,000 to 13,000 homes with internal insulation. A small percentage also pose immediate health and safety risks.

The Department for Energy Security and Net Zero established a consumer protection system in 2021 and appointed TrustMark to ensure quality.

But the NAO reveals the system failed to alert the Government to significant problems with the quality of installations until late 2024. That month, the Burnley Express and SSB Law Victims Support Group hosted their second Parliament lobby of the year with Bradford East MP Imran Hussain to highlight how victims were still living with the effects of failures in earlier ECO schemes.

Why does the National Audit Office think the latest failures are so widespread?

• Firms “cutting corners” and subcontracting work to incompetent or uncertified installers.
• Uncertainty over which standards apply to which jobs.
• Weak government oversight prevented widespread issues from being identified sooner.
• An overly complex and fragmented consumer protection system meant it was unclear who was responsible for what among DESNZ, Ofgem, and private sector certification bodies and scheme providers.
• TrustMark’s funding arrangements limited its ability to have analytical systems fully running until the latter half of 2024.
• Insufficient audit and monitoring, allowing installers to “game” the system.

Fraud concerns have also been raised by the NAO.

Last November, Ofgem estimated that businesses had falsified installation claims in 5,600 to 16,500 homes, potentially claiming between £56m. and £165m. from the energy suppliers operating under the scheme.

However, the Burnley Express has seen earlier Ofgem reports that uncovered concerns like falsified documents, misrepresentation in insulation claims, and EPC falsification in an earlier scheme called ECO3. Ofgem’s investigations into suspected fraud found that 6,317 energy-saving measures could not count towards Net Zero or fuel poverty targets.

This January, then-Energy Minister Miatta Fahnbulleh announced plans to suspend 39 rogue businesses and conduct on-site audits and additional monitoring to ensure quality.

What recommendations is the NAO now making to the Government to fix the scandal?

Take clear responsibility for schemes such as ECO, even when they are funded through consumers’ electricity bills.

Clarify its approach to repairing faulty ECO scheme installations alongside its Warm Homes Plan.

Reform the consumer protection system for retrofit schemes.

Report annually on a statistically robust estimate of the level of fraud and non-compliance in each of its retrofit schemes.

Gareth Davies, head of the NAO, said: “ECO and other such schemes are important to help reduce fuel poverty and meet the Government’s ambitions for energy efficiency.

“But clear failures in the design and set-up of ECO and in the consumer protection system have led to poor-quality installations, as well as suspected fraud.

“DESNZ must now ensure that businesses meet their obligations to repair all affected homes as quickly as possible. It must also reform the system so that this cannot happen again.”

The Burnley Express and SSB Law Victims Support Group call for the Government to extend its remedial process to CWI victims. Many have found that their installers have gone bust and the 25-year guarantees will not cover the huge costs to remove the insulation, which in some cases surpass £100,000.

Burnley, Padiham, and Brierfield MP Oliver Ryan raised the issue in Parliament in January and asked if the Government would ban directors of suspended companies from creating new firms.

Minister Fahnbulleh, who has been replaced in the role by Michael Shanks MP, responded to say that the department is working with certification bodies to prevent companies from dissolving and establishing a new, similar firm to avoid repair work.

If you have been impacted by this issue and would like to join the SSB Law Victims Support Group, please contact [email protected]

To sign our petition for justice for CWI victims, which has garnered nearly 40,000 signatures, visit https://www.change.org/CWIscandal