Government Energy Efficiency Scheme Criticised for Poor Home Installations

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15 October 2025

98 per cent of homes with external wall insulation installed under the government’s Energy Company Obligation scheme have major issues due to poor oversight and insufficient installation quality.

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The Energy Company Obligation scheme (ECO) is a set of support measures designed to tackle fuel poverty in the UK, requiring energy suppliers to fund the installation of energy efficiency measures, such as installing insulation or upgrading a heating system

However, poor installation work administered under the scheme has resulted in up to 23,000 homes with major external wall insulation issues. Six per cent of these pose an immediate health and safety risk from issues such as exposed live electrical cabling or blocked boiler ventilation.

Not-for-profit Trustmark was appointed to provide a consumer protection system for the scheme in 2021, taking over from Ofgem. But the system had weak government oversight, was overly complex and allowed installers to “game” the audit process by either being certified by multiple certification bodies or transferring their certification between bodies.

Additionally, Ofgem estimated that businesses had falsified claims for ECO installations in between 5,600 and 16,500 homes, potentially claiming between £56 million and £165 million.

The National Audit Office Report recommends that the Department for Energy Security and Net Zero reforms its approach to the system, including reporting annually on the level of fraud and non-compliance in each of its retrofit schemes.

Gareth Davies, Head of the National Audit Office, 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.”

Picture: a photograph of a semi-detached residential property with parking spaces in front of it. Image Credit: Unsplash

Article written by Ella Tansley | Published 15 October 2025

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