Faulty Wall Insulation Risks Thousands of Homes

Cowboy installations of external wall insulation under government green schemes aimed at cutting energy bills have left thousands of homes in need of extensive repairs.

The National Audit Office (NAO) says 98 percent of homes that have external wall insulation and 29 percent of those with internal insulation will develop problems leading to damp and mould unless they are fixed.

In a savage examination of the previous government's £4 billion drive to meet green targets at all costs, has left more than 23,000 homes unsafe, damp and not fit to live in, says the NAO.

The NAO investigation has found 6 percent of homes with external insulation installed pose an immediate risk to health, with issues like exposed live electric cabling or blocked boiler ventilation.

Just shy of 3,000 homes have already been repaired at a cost of between £5,000 and £18,000 a property for external work and £6,000 for internal refurbishment. The worst case is expected to cost around £250,000 to remedy.

Poor installations and suspected fraud

Energy Consumer Minister Martin McCluskey pledged the government would put the shambles right and that the homes would be fixed at no cost to householders.

The NAO report looked at work carried out between 2022 and the start of 2025 on two schemes - ECO4 and the Great British Insulation Scheme.

In 2022, the government ordered energy companies to spend billions of pounds, raised from levies on energy bills, on insulating homes. People receiving benefits and those in poorly insulated homes were targeted.

However, the NAO investigation uncovered "clear failures" in the Energy Company Obligation (ECO) scheme, which resulted in "poor-quality installations and suspected fraud of between £56 million and £165 million."

Installers to foot the bill

NAO head Gareth Davies explained the Department for Energy Security and Net Zero (DESNZ) said: "DESNZ must now ensure that businesses meet their obligations to repair all affected homes as quickly as possible. It must also reform the system so that this cannot happen again."

The original installer is liable for the cost of repairing faulty installations in affected homes.

Read the full report: Energy efficiency installations under the Energy Company Obligation