Inquiry launched into faulty energy efficiency installations

A parliamentary inquiry has been launched into faulty energy efficiency installations in the UK’s housing sector.

The Public Accounts Committee (PAC) will use the work of the National Audit Office (NAO) as a starting point from which to conduct the inquiry and “hold government to account for how it spends public money”.

Issues have been raised by the not-for-profit quality assurance company TrustMark into the work of companies installing energy efficient products such as insulation into homes.

TrustMark identified problems with the Energy Company Obligation 4 (ECO4) scheme and the Great British Insulation Scheme (GBIS), both of which are funded via energy consumers’ bills.

Senior officials at the Department for Energy Security and Net Zero and regulator Ofgem, as well as other industry figures, are expected to give evidence to the PAC.

The subjects covered will include efforts the government has taken to remediate problems, how much this will cost the public purse, and the impact on achieving carbon net zero by 2050.

Official statistics show that to the end of November last year, external and internal wall insulation measures had been fitted in around 65,000 households under the ECO4 scheme and the GBIS.

The government itself announced in January this year that issues had been raised, including insufficient ventilation and missing or exposed insulation, leading to damp and mould.

Back then, the government suspended 39 businesses from installing new solid wall insulation. The installers responsible for the substandard work were forced to fix it and households were told they would not be asked to pay. Oversight of the refit work was given to Ofgem.

At the time, the minister for energy consumers Miatta Fahnbulleh pointed out that the ECO4 scheme and the GBIS had been inherited by the current Labour government and that it was clear the existing system was in “dire need of reform”.

The PAC has form when it comes to criticising similar schemes. Seven years ago, the committee found the Renewable Heat Incentive failed to meet its objectives, and did not provide value for money against a £23bn total cost to taxpayers.

In addition, in 2021 the PAC’s report into Green Homes Grants found the scheme’s design was too complex and that the government had “persistently failed to learn lessons from previous energy efficiency schemes”.

The current inquiry, which is expected to take several months, is now inviting comments from the public and industry. It was one of 14 inquiries launched by the PAC.