On 17 July the Government updated the House on widespread, systemic issues in the delivery of solid wall insulation under the energy company obligation 4 scheme and the Great British insulation scheme. These schemes place obligations on large and medium-sized energy suppliers to install energy efficiency and other improvements to homes, typically delivered through contractors. ECO4 commenced in 2022, and GBIS in 2023. Around 65,000 households have received solid wall insulation installed under those schemes.
The issues identified were the result of unacceptably poor standards of work from a number of contractors, enabled by a flawed oversight and protection system established by the previous Government. In the most severe cases, this has led to damage to homes, including serious problems with mould and damp. People placed their trust in the system to deliver safe, long-lasting home upgrades that would reduce their energy bills, but they have been severely let down.
This statement presents the results of our independent audit programme, published on gov.uk, and outlines the comprehensive actions that this Government are taking to help those people whose homes are affected and to ensure that this never happens again.
In October 2024, routine audits conducted by TrustMark—the independent body that oversees the quality of retrofit work done by tradespeople working in homes–identified significant levels of poor-quality solid wall insulation that had been installed under ECO4 and GBIS. TrustMark began to suspend installers, and the Department commissioned a much fuller audit.
In November, the Department asked Ofgem to oversee an expanded programme of checks, working with TrustMark, certification bodies and others to understand the scale of the issues. When it became clear that this was likely to be a widespread problem, the Department informed the House of its initial findings and committed to publishing the results in the autumn of an independent audit of the installation of solid wall insulation.
The statistically representative audit programme, launched in the spring, has now completed and I have now published the results on gov.uk. Results show that 92% of external wall insulation installations and 27% of internal wall insulation installations of those audited under these schemes were found to have at least one major technical non-compliance. A major non-compliance indicates an issue that will compromise the effectiveness of the insulation rather than pose a direct risk to safety.
Additionally, a small percentage of installations audited—6% of EWI and 3% of IWI—were categorised as posing potential risks to health or safety. Wherever these kinds of risks are identified, installers are required to make them safe within 24 hours.
Installers are responsible for putting right any issues found with their work; we have been clear that no household should be asked to pay any money to put things right. This is an unacceptable level of non-compliance that points to serious failings in oversight of these schemes, set up under the previous Government.
The Department also commissioned audits of our Government-funded schemes supporting energy efficiency: the social housing decarbonisation fund, the home upgrade grant and the local authority delivery schemes. Fortunately, these show that there is no widespread problem with those schemes, in part as they are subject to more oversight and scrutiny. We will take the lessons from those programmes into any future work carried out on behalf of energy suppliers.
Over the last several months it has become clear that this Government inherited a system that was not fit for purpose and that had multiple points of failure. These included: a system of oversight that had too many gaps, and which allowed issues to go unidentified for far too long; a lack of safeguards and incentives for installers and the certification bodies to carry out and ensure high-quality work; and a failure of the previous Government to grip properly the confusing and fragmented oversight system that it had allowed to develop.
All these failures must be addressed, so that the scale and nature of these problems can never be repeated. We are taking action. First, we have taken immediate steps to strengthen the safeguards in the system and ensure accountability. This includes:
Suspension of 38 installers and a rigorous process for reinstatement following remediation of all issues in identified properties;
Energy suppliers carrying out enhanced checks and increased oversight of their contractors;
Greater oversight by my Department of TrustMark’s operations;
New restrictions preventing installers from evading accountability by operating through multiple certification bodies;
Updated standards to require site visits from retrofit co-ordinators, giving an additional layer of on-site assurance, and requiring higher standards of qualification for retrofit designers.
Secondly, we want to go further. The Government are offering comprehensive on-site audits to every household with external wall insulation installed under the two schemes, at no cost to the consumer. We are committed to helping households, who through no fault of their own have not received the standard of service they deserve. Every affected household will be initially contacted by Ofgem, which is supporting the Government response, and Ofgem’s contact centre is available for any household with concerns. Details for this are:
ECOhelD@ofgem.gov.uk, a webform on our gov.uk pages, and freephone number 0808 169 4447, Monday to Friday, excluding bank holidays, from 9.30 am to 4.30 pm.
We strongly urge all individuals who are contacted for an audit to take up the offer, even if they have no current concerns with their external wall insulation. I am aware of examples of households who have refused access to installers seeking to fix issues found. I encourage anyone who has had an audit carried out to allow access to the qualified professionals to put the work right. Even where the original installer is no longer trading, all works carried out under ECO4 and GBIS must be covered by guarantees, and householders can contact their guarantee provider for assistance.
These are important short-term improvements, but we are clear that we must now go much further. This episode reveals systemic failures with ECO4 and GBIS that were set up under the previous Government, which is why we are conducting a sweeping overhaul of consumer protection for retrofit measures. High-quality and safe installations with strong consumer protections are essential to building trust in the retrofit market.
The system we inherited was fragmented, privatised, and has weak oversight—leading to unacceptably poor outcomes for consumers. Too many organisations, often with overlapping roles and responsibilities, make it more difficult for consumers to obtain redress when work is defective. Compounding this, the lack of a clear line of accountability to a strong oversight body has allowed poorly performing installers to carry out substandard work without proper accountability. This is unacceptable and does not give the consumers the outcomes they deserve.
We will change all of this: Instead of a multitude of organisations with overlapping responsibilities, we will have clear centralised oversight. Rather than private companies in the driving seat, the Government will be at the fore, instituting tight controls and tough sanctions. We will do this by bringing in a single system of oversight for retrofit work with consistent standards and processes for installers, delivering stronger, formal Government assurance and driving up quality.
Further detail will be provided in the warm homes plan, with reforms to deliver on three key objectives:
Work should be right first time: despite the unacceptable failures uncovered in ECO4 and GBIS, in most cases work on Government schemes is safe and carried out to a high standard. Consumers must be able to trust that work will be done right the first time in all but the rarest circumstances.
Simplicity: people should not be expected to navigate a variety of organisations when they want to make changes to improve their homes. The installation process for low carbon heating and energy efficient home upgrades will be clear and straightforward.
Swift remediation and a straightforward process for redress: in those rare cases where things do go wrong, there must be clear lines of accountability, so that consumers are guaranteed to get any problems fixed quickly.
The Government retrofit system reform advisory panel will continue to support us to develop these proposals, and we are working closely with the Ministry of Housing, Communities and Local Government, the building safety regulator and others. The Department will consult on proposals early next year.
Home upgrades are one of the best ways to get bills down for families, to cut bills and to deliver warmer homes, so it is vital that we address these issues in a way that ensures we retain public confidence in home upgrades.
This Government are acting—prioritising help for those households who might be affected while ensuring that we learn the lessons from these failures, and that as we drive for reform, we take the opportunity to make lasting change. That is why we are bringing forward comprehensive reforms to the retrofit consumer protection system—to make it stronger, more transparent, and more accountable, so that this cannot happen again.
[HCWS953]