Systemic Failures in Government Insulation Schemes

A new report by the Public Accounts Committee has highlighted a “clear systemic failure” in government insulation schemes, with more than 30,000 homes left with defects. For at least two years, senior officials at the Department for Energy Security and Net Zero were unaware whether these schemes were effective.

The schemes in question include the Energy Company Obligation (ECO) and the Great British Insulation Scheme (GBIS), which aimed to improve energy efficiency in UK homes. However, the National Audit Office found last year that 98% of external and 29% of internal wall insulation installed up to mid-January 2025 were defective, creating immediate health and safety concerns for occupants.

Health and Financial Risks for Households

The committee warns that many households may still face repair costs despite government assurances. Responsibility for fixing faulty insulation currently lies with the original installer, backed by guarantees covering up to £20,000 if the installer fails or ceases trading. However, some repair costs have been estimated to exceed £250,000, far beyond the guarantee cap.

Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, stated: “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.” He suggested the severity of installer failures could warrant referral to the Serious Fraud Office.

Energy Minister Martin McCluskey responded to concerns by confirming that every household with external wall insulation installed under these schemes is being audited at no cost to the consumer. He added that more than half of the non-compliant properties identified so far have been remediated.

Implications of EPC C Targets and Future Insulation Schemes

With the government pushing landlords to meet EPC C energy efficiency standards by 2030, further insulation schemes are expected. Energy Secretary Ed Miliband has emphasised the government’s Warm Homes Plan, which aims to enforce energy standards on landlords.

However, Mick Roberts, a Nottingham landlord with 28 years’ experience housing benefit tenants, warned that the new targets could exacerbate the problem. He told Property118: “Now Ed Miliband is calling for it again, there will be millions more with botched insulation in five years time.” Roberts highlighted that retrofitting older properties often leads to unintended consequences such as damp and mould, which can affect tenants’ wellbeing and property conditions.

Roberts also raised concerns about the impact on tenants paying below-market rents, questioning whether their preferences and needs have been considered in government plans.

Real-World Impact on Landlords

Mr Roberts shared his personal experience with government insulation schemes, revealing that his properties have suffered from poor workmanship. He explained: “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.”

He described the installers as “cowboys” who lacked accountability, leading him to halt further internal wall insulation work despite plans to treat 30–40 of his houses. Tenants even faced practical issues, such as a room becoming too small due to insulation, forcing one tenant to replace a sofa.

Roberts criticised the government’s approach, stating: “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.”

What This Means for UK Landlords

Landlords should be aware of the risks associated with government-backed insulation schemes, including potential defects, health hazards, and significant repair costs. The current guarantee system may not cover all expenses, especially for extensive damage.

With EPC C targets approaching, landlords must carefully consider the quality and reliability of any retrofit work commissioned under future schemes. Engaging with reputable installers and monitoring ongoing works closely will be essential to avoid the pitfalls experienced by others.

Additionally, landlords should stay informed about government audits and remediation programmes to ensure compliance and protect tenants’ safety.

Suggested internal link anchors

• government insulation schemes
• Energy Company Obligation (ECO)
• Great British Insulation Scheme (GBIS)
• EPC C targets
• energy efficiency standards
• retrofitting older properties
• health and safety risks
• repair costs and guarantees
• tenant wellbeing
• property management challenges
• Warm Homes Plan

TLA update

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