A flagship Conservative government scheme, touted as a solution to fuel poverty and pollution, has been exposed as a shambolic failure that allowed rogue traders to run rampant in thousands of households, a damning report from the public spending watchdog has revealed.
The Energy Company Obligation (ECO) scheme, designed to insulate the homes of the most vulnerable, has instead created a new crisis. A report from the National Audit Office (NAO) details “clear failures” that have led to dangerous, low-quality installations and widespread potential fraud, leaving a trail of damp, mould, and fire hazards in its wake.
A System Riddled with Failures
The scale of the failure is staggering. The NAO found that almost all homes—a shocking 98%, affecting up to 23,000 properties—fitted with external wall insulation under the scheme now require major remedial work. A further 29% of homes with internal wall insulation (9,000-13,000 dwellings) are also affected.
Most alarmingly, the report confirms that a small but significant percentage of these botched jobs are putting lives in immediate danger. Issues include poor ventilation that could lead to carbon monoxide poisoning and electrical faults with the potential to cause fires.
Gareth Davies, the head of the NAO, stated that while the scheme’s aims were important, “clear failures in the design and set-up” had directly led to “poor-quality installations, as well as suspected fraud.”
Letting the Cowboys Through the Door
So, how did a well-intentioned policy go so catastrophically wrong? The NAO points the finger at a perfect storm of incompetence and weak oversight. The work was heavily subcontracted to individuals and firms who were neither competent nor properly certified. This created a Wild West environment where businesses could “cut corners” and “game the system” with little fear of consequence.
The energy regulator, Ofgem, estimates that businesses falsified claims for installations in up to 16,500 homes, potentially fraudulently claiming up to £165 million from energy suppliers—a cost ultimately footed by the British public through their energy bills.
Fuel poverty campaigners have not minced their words. Simon Francis, coordinator of the End Fuel Poverty Coalition, warned that the system had “let cowboys through the front door, leaving thousands of victims living in misery and undermining public trust.”
A Damning Indictment and a Promise to Fix
The criticism has been universal. Sue Davies of Which? called the report “a damning indictment of a failed scheme, where poor oversight has allowed rogue traders to cause huge damage to people’s homes and lives.”
In response, the current Labour government has been forced to react. Martin McCluskey, the minister for energy consumers, criticised the “unacceptable, systemic failings” inherited from the last government—a clear swipe at the Conservative administration that oversaw the scheme’s implementation. He promised “comprehensive reforms” to introduce “clear lines of accountability.”
While the government has urged affected households to take up a free audit and promised that installers will be forced to remedy issues free of charge, for thousands, the damage is already done. Their homes, which were meant to be made warmer and safer, have been left defective and dangerous.
This is more than a policy failure; it is a direct reflection of a hands-off approach that prioritised targets over quality and outsourcing over oversight. It is a stark lesson in what happens when vital public services are, in effect, run by cowboys.
