Around 98 per cent of homes with external wall insulation installed under the Government’s ECO scheme require work to correct major issues that will cause problems such as damp and mould.

A new national Audit Office (NAO) report focusses on recent failures of installations of external and internal wall insulation and suspected fraud on the Energy Company Obligation (ECO).

The ECO scheme intended to tackle fuel poverty and reduce carbon emissions, and it obligates energy suppliers to fund the installation in homes of energy efficiency measures such as insulation. There are currently two ECO schemes: ECO4 running from April 2022 to March 2026, and the Great British Insulation Scheme (GBIS), with broader eligibility, that runs from March 2023 to March 2026.

Ofgem reported that 243,900 homes have been upgraded under ECO4 to the end of March 2025, and 60,600 homes under GBIS. Across both schemes combined there have been 28,000 installations of external wall insulation and 45,200 installations of internal wall insulation.

But during 2024, TrustMark informed the Department for Energy Security and Net Zero (DESNZ) of two separate issues on these schemes: Suspected fraud, whereby some retrofit businesses were overclaiming for work undertaken, and high levels of external wall insulation installations that were non-compliant with the relevant quality standard. The following month, TrustMark similarly highlighted issues with internal wall insulation.

Non-compliance covers a wide range of severity, from major issues that pose immediate risks to the health and safety of the household to minor issues such as missing paperwork.

The NAO has summed the situation up saying, “there have been clear failures in the design and set-up of ECO4 and GBIS and their consumer protection and quality assurance system, which have led to widespread issues with the quality of installations and suspected fraud”.

Quality of installation, skills and advice has clearly been in short supply, along with honesty, and whilst there is no audit on other energy efficiency schemes, it might benefit the sector to consider other areas of domestic renewables, such as solar and heat pumps, before it is too late.

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