62nd Report - Faulty energy efficiency installations

Select Committee

Public Accounts Committee HC 1229 23 January 2026

Report Status Government responded

Conclusions & Recommendations 39 items (19 recs)

Source View on Parliament website

Government Response (AI assessment · 38 of 39 classified)

Accepted 9

Accepted in Part 2

Acknowledged 1

Deferred 3

Not Addressed 12

Rejected 11

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Sixty-second report from Session 2024-26 · published 7 Apr 2026

Read the government response ↗ Response on the tracker

Recommendations & Conclusions

11 results

6 Recommendation 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 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 detecting fraud on ECO4 and GBIS. The Department did not carry out a fraud risk assessment during the design of ECO4 and the ownership of some known fraud risks was agreed only in October 2025. Ofgem’s role in relation to fraud is limited to progressing counter-fraud investigations where allegations have been made. Yet no organisation is responsible for pro-actively looking for fraud, nor holds all the data it would require to do so effectively. Ofgem has identified installations worth 1.75% of the scheme value as fraudulent but, given the above, we suspect the true level of fraud to be much higher and above the Departments tolerance threshold of 2%. If the Department had paid more attention to preventing and detecting fraud, it would likely have avoided some of the poor quality installations too. We suggest that the Serious Fraud Office should look at this case. recommendation a. Given 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. b. HM Treasury should extend its requirement in Managing Public Money for a Fraud Risk Assessment on all new major areas of public spend to include levy-funded schemes instigated by the government, such as ECO. c. In future schemes, the Department should ensure that one body is responsible for fraud prevention and detection at the system level, enabled by counter-fraud activities of and data from other organisations in the system. d. HM Treasury should amend its guidance in Managing Public Money to recommend public bodies design fraud out of all new schemes as far as is sensible, and have one body responsible for fraud prevention and detecti Show less

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

View Details

9 Conclusion Rejected

Over 32,000 homes affected by major ECO4 and GBIS insulation faults

Conclusion

The Department and Ofgem believe that an estimated 98% of external wall insulation and around a third (29%) of internal wall insulation fitted under ECO4 and GBIS up to mid-January 2025 have major issues that need fixing. Between 32,000 and … Read more

Government Response Summary

The government disagrees with the Committee's assessment regarding the scale of non-compliant insulation, stating it has greater confidence in local authority retrofit programmes. It outlines ongoing actions to offer on-site audits for all EWI and address IWI concerns under ECO4 and GBIS, noting existing 25-year guarantees.

HM Treasury

View Details

10 Recommendation 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

View Details

11 Recommendation 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

HM Treasury

View Details

12 Recommendation 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

HM Treasury

View Details

14 Recommendation 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

HM Treasury

View Details

19 Recommendation 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

View Details

33 Recommendation 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

View Details

34 Recommendation 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

View Details

35 Recommendation 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

HM Treasury

View Details

36 Recommendation 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

View Details