{"id":536723,"date":"2026-01-23T12:49:35","date_gmt":"2026-01-23T12:49:35","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=536723"},"modified":"2026-01-23T12:49:35","modified_gmt":"2026-01-23T12:49:35","slug":"catastrophic-failure-on-insulation-schemes-leads-to-calls-for-sfo-probe","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/government\/catastrophic-failure-on-insulation-schemes-leads-to-calls-for-sfo-probe-23-01-2026\/","title":{"rendered":"\u2018Catastrophic failure\u2019 on insulation schemes leads to calls for SFO probe"},"content":{"rendered":"

MPs have called for the Serious Fraud Office to investigate after finding a \u201ccatastrophic failure\u201d over government-backed insulation schemes.<\/p>\n

In a new 34-page report<\/a>, the cross-party Public Accounts Committee (PAC) found that more than 30,000 homes had been left with defects due to failures under ECO4 and the Great British Insulation Scheme (GBIS).<\/p>\n

Around 98 per cent of external wall insulation and 29 per cent of internal wall insulation installed under the ECO up to mid-January 2025 are estimated to have major issues that need remediation.<\/p>\n

Today\u2019s report, which follows an earlier investigation by the National Audit Office<\/a>, also said the \u201cknown levels of fraud\u201d involved with the schemes are likely to be a \u201csignificant understatement\u201d of the \u201ctrue level\u201d of fraud.<\/p>\n

The PAC described \u201ca clear and catastrophic failure with the quality of installations of external and internal wall insulation in ECO4 and GBIS\u201d.<\/p>\n

It added: \u201cGiven the likely role of fraud in the poor-quality installations, the department should refer the issue to the Serious Fraud Office to investigate the extent of fraud across ECO and bring criminals to justice.\u201d<\/p>\n

Ofgem has estimated businesses could have fraudulently claimed between \u00a356m and \u00a3165m from energy suppliers under ECO.<\/p>\n

Noting that the scheme is due to end this year, the PAC report also warned the end of ECO could shrink the market, making it harder to retain enough qualified installers to complete remediation.<\/p>\n

Separately, on the level of poor-quality work, the MPs were told that 38 installers \u2013 81 per cent of the external wall insulation market \u2013 had been suspended.<\/p>\n

However, 22 were reinstated after promising to fix their work, according to the report.<\/p>\n

The PAC warned that households have \u201cnot yet claimed on guarantees in large numbers\u201d.<\/p>\n

But it said: \u201cNot all installers are complying with the remediation process, and some company directors are closing and restarting their businesses to avoid remediation responsibilities.\u201d<\/p>\n

As a result, the MPs have called for the Department for Energy Security and Net Zero (DESNZ) to confirm that it is \u201cnow working with Companies House and the Insolvency Service to reduce the risk of incompetent and dishonest company directors closing and restarting their businesses\u201d.<\/p>\n

It is understood that energy suppliers are now carrying out extra desk-based and onsite checks as part of an increased oversight of subcontractors.<\/p>\n

The committee said it was aware of cases with damage worth more than \u00a3250,000 and was \u201csceptical that the original installers and guarantee providers will be able to withstand the potential scale of claims\u201d.<\/p>\n

PAC chair Sir Geoffrey Clifton-Brown said: \u201cPotentially thousands of people are now living with health and safety risks in their homes, and despite government\u2019s protestations we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works.\u201d<\/p>\n

He added: \u201cAll involved in the system must now move at far greater pace to make good.<\/p>\n

\u201cThe public\u2019s confidence will have rightly been shaken in retrofit schemes given what has happened, and government now has a self-inflicted job of work on its hands to restore faith in the action required to bring down bills and reduce emissions.\u201d<\/p>\n

A DESNZ spokesperson said: \u201cIt is categorically untrue there are widespread health and safety risks \u2013 for the vast majority, this means a home may not be as energy efficient as it should be.\u201d<\/p>\n

The report also found that TrustMark, the government-endorsed quality scheme, did not tell DESNZ of \u201chigh levels of faulty installations of external wall insulation until October 2024, more than two years after the start of ECO4 in April 2022\u201d.<\/p>\n

In a statement, TrustMark said it \u201cremains totally committed to ensuring strong consumer protection for all types of home improvements\u201d.<\/p>\n

It added: \u201cWe are working with DESNZ to deliver the \u2018Find and Fix\u2019 programme of audits, offered to those households where external wall insulation was installed under ECO4 or GBIS.<\/p>\n

\u201cWe are continuing to work with government, our scheme providers, registered businesses and, where appropriate, guarantee providers, to get these problems found and fixed.<\/p>\n

\u201cThese examples of poor-quality workmanship are completely unacceptable and underline the need for change and reform to the current system, enabling stronger oversight by TrustMark on businesses and strengthening of consumer protection.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

MPs have called for the Serious Fraud Office to investigate after finding a \u201ccatastrophic failure\u201d over government-backed insulation schemes. In a new 34-page report, the cross-party Public Accounts Committee (PAC) found that more than 30,000 homes had been left with defects due to failures under ECO4 and the Great British Insulation Scheme (GBIS). Around 98 …<\/p>\n","protected":false},"author":29901,"featured_media":476878,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[565,556],"tags":[],"class_list":["post-536723","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","category-sustainability"],"yoast_head":"\n\u2018Catastrophic failure\u2019 on insulation schemes leads to calls for SFO probe | Construction News<\/title>\n<meta name=\"description\" content=\"MPs have called for the Serious Fraud Office to investigate after finding a \u201ccatastrophic failure\u201d over government-backed insulation schemes. 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