Weak Controls Blamed For Faulty Home Installations Under Efficiency Scheme

Almost every home fitted with external wall insulation under a key government energy efficiency programme will require major repair work, according to a damning report by the National Audit Office (NAO).

The report found that 98% of homes with external wall insulation installed through the Energy Company Obligation (ECO) scheme have serious faults likely to cause damp and mould. Between 22,000 and 23,000 properties are affected, alongside thousands more with defective internal insulation.

The watchdog said poor-quality workmanship, weak oversight and an inadequate consumer protection system were to blame. It concluded that tens of thousands of households now face disruption and potential health risks because of faulty installations.

The Department for Energy Security and Net Zero (DESNZ) introduced a new consumer protection system in 2021, appointing TrustMark as its government-endorsed quality body. But the NAO said the system failed to identify the scale of the problem until late 2024 — long after media reports had surfaced.

Investigators pointed to an under-skilled and poorly regulated workforce, subcontracting to uncertified installers, confusion over standards, and businesses cutting corners to meet installation targets. The report also noted weaknesses in auditing and monitoring that allowed installers to “game” the system, and funding delays that limited TrustMark’s ability to detect problems earlier.

Ofgem has separately estimated that between 5,600 and 16,500 ECO installations may have involved falsified claims, potentially costing energy suppliers up to £165 million.

In response, DESNZ and Ofgem have asked certification bodies to suspend underperforming installers and launched urgent reforms to the protection framework. DESNZ said lessons from the scheme would inform its upcoming Warm Homes Plan.

Gareth Davies, head of the NAO, said: “ECO and similar schemes are vital to reduce fuel poverty and meet energy efficiency goals. But clear failures in design and oversight have led to poor-quality installations and suspected fraud. DESNZ must ensure that businesses repair all affected homes quickly and that the system is reformed to prevent this happening again.”

For project managers, the findings offer a stark reminder of the risks associated with complex, multi-stakeholder delivery schemes. Strong governance, transparent accountability and effective quality control are critical to maintaining public confidence and ensuring large-scale projects deliver on their promises.