Government-Funded Home Insulation Schemes Leave Thousands Facing Costly Repairs, Audit Finds
A National Audit Office report reveals that nearly all homes insulated under two major UK government schemes suffer from serious defects, leaving thousands of households facing damp, mold and safety hazards.
Two major United Kingdom government schemes to improve home energy efficiency through insulation have been severely mishandled, according to the National Audit Office (NAO), leaving tens of thousands of properties in need of repair, BBC News Correspondent Zoe Conway and BBC Business Reporter Pritti Mistry report.
The NAO found that 98 percent of homes with external wall insulation installed under the schemes launched by the previous government have defects likely to cause damp and mold if not fixed. Nearly 29 percent of homes with internal insulation also require remedial work.
Energy Consumer Minister Martin McCluskey said the government was addressing the issue and promised that affected homeowners would see repairs carried out “at no cost to the consumer.”
One affected homeowner, Mohammed Mahedi of Luton, described how the faulty insulation fitted two years ago has worsened his living conditions. “Some mornings I wake up breathing really heavily. I feel it in my neck and my lungs,” he said. The BBC first reported similar issues in Luton last year, but Mahedi is still waiting for his home to be fixed. “We got a scheme done that was meant to help us, but it’s made everything worse,” he added.
The NAO’s report covers England, Scotland, and Wales, focusing on work carried out between 2022 and early 2025 under the ECO4 and Great British Insulation Scheme programs. These initiatives directed energy companies to spend billions—raised through levies on consumer energy bills—on insulating homes, particularly for low-income households and those in poorly insulated properties.
However, the watchdog found “clear failures” in the design and oversight of the Energy Company Obligation scheme, leading to substandard workmanship and possible fraud.NAO head Gareth Davies urged the Department for Energy Security and NetZero to ensure all affected homes are repaired promptly and to reform the system to prevent a repeat. The NAO attributed the widespread issues to an under-skilled workforce, corner-cutting by contractors, and confusion over applicable standards.
According to the audit, between 22,000 and 23,000 homes with external insulation and up to 13,000 with internal insulation now require repairs. More than 1,000 properties pose immediate health and safety risks, including exposed live electrical wiring and blocked boiler vents.
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