A damning audit into the UK government’s flagship energy efficiency programmes – the Energy Company Obligation 4 (ECO4) and the Great British Insulation Scheme (GBIS) – has exposed widespread failures in the quality and oversight of retrofit works carried out in UK homes.
Property Inspect, a leading provider of inspection and compliance technology, says the findings must act as a watershed moment for the entire property sector.
Launched with the goal of making homes warmer, more energy-efficient and cheaper to heat – particularly for low-income households, the ECO4 and GBIS schemes were intended to deliver real progress on housing standards and energy performance. Instead, the audit presents a stark and troubling picture.
According to sample audits from the National Audits Office, 98% of all external wall insulations installed under ECO since 2022 require corrective work, affecting an estimated 22,000 to 23,000 homes. Even more alarmingly, 6% of these homes now present immediate health and safety risks to occupants.
The audit cites poor workforce skills, confusion over standards, and deliberate corner-cutting as key drivers behind the quality failures. Ofgem has also flagged suspected fraudulent activity, with some retrofit businesses reportedly overclaiming for work. Investigations into the scale of fraud are ongoing, though it is already thought to be higher than in other retrofit schemes.
A systemic failure of oversight
In the wake of the audit, Sián Hemming-Metcalfe, Operations Director at Property Inspect said, “This is a big red flag for anyone in property operations, inspections, compliance and tech: you’ve got what was meant to be an efficiency and good-housing upgrade scheme working entirely backwards.
Homes meant to become warmer and more efficient are now at risk of being colder, damp, mould-ridden, or even worse.
We have to confront the reality that government-backed does not automatically mean compliant or trustworthy. That assumption is no longer safe. From our perspective in the inspection technology space, it’s vital that the industry lets go of the belief that ‘government scheme = quality assured’.”
I don’t think we can overstate how significant this audit is: it fundamentally changes how we assess upgrades and repairs going forward.”
Inspection and compliance must evolve
With thousands of substandard installations now embedded in homes across the UK, Hemming-Metcalfe argues that inspection and compliance processes urgently need to evolve:
“This demands an industry-wide reset. Should inspection workflows now include specific checks for works carried out under ECO4 or GBIS? Should we be flagging and monitoring homes at risk of substandard retrofits? Should contractors be allowed to effectively ‘mark their own homework’?
These are critical questions the government must provide answers to: who will be responsible for remediation, and what will be done to ensure accountability?”
Restoring trust starts with better systems
As the UK moves towards more ambitious energy efficiency targets and net-zero goals, Hemming-Metcalfe warns that the scandal risks damaging public confidence in any future government-led schemes:
“The impact of this goes far beyond defective insulation. It undermines public trust in national infrastructure programmes. Unless there is a total overhaul in how such schemes are designed, delivered, and audited, the damage will extend far beyond the properties themselves.
Technology, compliance processes, and operational frameworks must now become bulletproof. This isn’t centred only on poor workmanship, it’s about safeguarding health, ensuring public safety, and restoring faith in how we manage national housing improvements.
This growing scandal cannot be brushed aside as a bureaucratic failure. It must be a turning point in how such schemes are held to account when things go wrong. We owe that much to the people living in the homes affected.”
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