Audit finds 98% of insulation under Tory schemes faulty, leaving homes damp and unsafe

A damning investigation has revealed that almost every home insulated under the previous Conservative government’s energy efficiency scheme was so poorly fitted that the work now needs repairing or complete replacement.

The National Audit Office (NAO) found that 98% of the roughly 23,000 homes fitted with external wall insulation under the Energy Company Obligation (ECO) and the Great British Insulation Scheme (GBIS) require urgent remedial work. Thousands of other properties were also found to have dangerously substandard internal insulation.

The findings have sparked outrage among consumer groups and energy campaigners, who say the government’s failures have left homeowners facing damp, mould, blocked ventilation and serious health risks.

“This report exposes a system that has let cowboys through the front door,” said Simon Francis, coordinator of the End Fuel Poverty Coalition. “Thousands of victims are now living in misery, and public trust in tackling cold homes has been shattered. What should have been a national success story has become a cautionary tale.”

According to the NAO’s report, between 9,000 and 13,000 homes fitted with internal insulation also suffer from major defects — affecting around 29% of installations. Worse still, more than 3,000 properties pose immediate health and safety risks, including exposed cabling and blocked ventilation shafts.

The ECO and GBIS initiatives were designed to fight fuel poverty and reduce carbon emissions by making homes more energy efficient. But investigators say weak oversight and fragmented accountability across multiple agencies allowed poor-quality workmanship and even fraud to flourish.

The NAO criticised the Department for Energy Security and Net Zero (DESNZ), the energy regulator Ofgem, certification bodies, and private scheme providers for creating what it called an “overly complex system” riddled with unclear responsibilities.

Installers were reportedly able to “game the system” by swapping certification bodies to evade scrutiny, leaving regulators with incomplete or misleading data.

Fraud was also rife. Last November, Ofgem estimated that retrofitting firms had falsified installation claims for 5,600 to 16,500 homes, potentially stealing between £56 million and £165 million from energy suppliers.

For thousands of homeowners, the consequences have been devastating. Many have found their properties unsellable or unfit for remortgaging, as poorly installed insulation traps moisture and worsens damp conditions.

“People’s homes and lives have been damaged by these faulty installations,” said Jess Ralston, an analyst at the Energy and Climate Intelligence Unit. “Many were already in fuel poverty and have faced even tougher times as a result.”

Sir Geoffrey Clifton-Brown MP, chair of the Commons public accounts committee, described the failures as “stark”, warning that the true scale of fraud remains unknown due to a lack of reliable data.

“DESNZ and Ofgem acted only after widespread problems became unavoidable,” he said. “It’s now imperative that households know how to fix their homes — and that these failures are never repeated.”

Under the rules of the schemes, installers are legally liable for repairing faulty work in full. Affected residents are being urged to contact Ofgem for assistance.

Responding to the NAO’s findings, Energy Minister Martin McCluskey condemned the situation as “unacceptable”, vowing to overhaul the system and ensure consumers are not left out of pocket.

“Today’s report shows systemic failings that have directly affected tens of thousands of families,” McCluskey said. “We’re taking decisive action to ensure all poor installations are fixed at no cost to the consumer. Our reforms will make accountability clear and guarantee quick resolutions when things go wrong.”

For many, however, the damage has already been done. What was once billed as a green energy revolution now stands as one of the most embarrassing failures in Britain’s home energy history — leaving walls rotting, ceilings moulding, and public confidence in ruins.