Government insulation schemes fail thousands of households

More than 30,000 homes have been left with defects from government insulation schemes, according to a new report.

The Public Accounts Committee describes a “clear systemic failure,” with no senior officials in the Department for Energy Security and Net Zero knowing whether the schemes were effective for at least two years.

A Nottingham landlord has warned Property118 that the government’s new EPC C targets could lead to millions more cases of botched insulation and that some of his own properties have been affected.

Thousands of people are now living with health and safety risks

The National Audit Office found last year that 98% of external and 29% of internal wall insulation installed through the government Energy Company Obligation (ECO) and Great British Insulation Scheme (GBIS) up to mid-January 2025 were defective, leaving immediate health and safety risks.

The committee warns households may still face costs for repairs. Ministers have previously claimed no household should have to pay to fix faulty insulation, but responsibility currently rests with the original installer, with costs of up to £20,000 covered by a guarantee if the installer fails or goes out of business.

Repair costs can far exceed this cap, with some damage estimated at more than £250,000.

The committee expresses doubt that installers or guarantee providers could cope with claims on this scale.

Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, said the failures of insulation installers were so severe that the matter should be referred to the Serious Fraud Office.

He said: “Potentially thousands of people are now living with health and safety risks in their homes, and despite government’s protestations, we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works.

“All involved in the system must now move at a far greater pace to make good. The public’s confidence will have rightly been shaken in retrofit schemes given what has happened, and government now has a self-inflicted job of work on its hands to restore faith in the action required to bring down bills and reduce emissions.”

Martin McCluskey, Minister for Energy Consumers, told the BBC: “Every household with external wall insulation installed under these two schemes are being audited, at no cost to the consumer. And we have been clear that no household should be asked to pay any money to put things right. Of all non-compliant properties found to date, more than half have been remediated.”

Millions more with botched insulation in five years time

With the government now pushing for landlords to meet EPC C targets by 2030, more government insulation schemes are expected.

Energy Secretary Ed Miliband has said the government’s Warm Homes Plan will “call time on landlords who don’t meet energy-efficiency standards.”

However, Mick Roberts, a Nottingham landlord who has housed benefit tenants for 28 years, told Property118 the plan could make things worse.

Mick Roberts told Property118: “Now Ed Miliband is calling for it again, there will be millions more with botched insulation in five years time.

“You cannot retrospectively fit older houses without some side effects. Older houses, by the way, that already have a new boiler, kitchen, windows, doors, tenant very happy and paying £100+ below market rent.

“What does the government think is going to happen to those renters who are paying cheap rent? Have they been to ask them what they want in their homes of 20 years?”

As previously reported on Property118, a government consultation document admits landlords may sell up or increase rent due to EPC rules.

Landlord affected by insulation schemes

Mr Roberts says his properties have also been affected by botched insulation from government schemes.

He explains to Property118: “The installer never communicated with us, only with the tenant. I had £6,000 worth of free internal wall insulation done under a scheme, and mould appeared just one year later.

“The builders have been cowboys, start one day, pack up the next year, and no one is accountable. I stopped all internal wall insulation work, even though they wanted to do 30–40 of my houses, because tenants were calling me saying the installers didn’t know what they were doing.

“One of my tenants even had to buy a new settee because the insulation made the room too small.

“Why isn’t anyone linking this with what Ed Miliband is calling for? He’ll be in a different department in 2030 and say it’s nothing to do with him when millions more homes are left damp and mouldy because of what he’s pushed on us.”