Tens of thousands of households in the UK that underwent energy efficiency upgrades through a government initiative are now facing significant issues like dampness and mold, according to a recent report by the National Audit Office. The report highlighted concerns about the Energy Company Obligation program, indicating potential fraudulent claims amounting to £165 million and safety risks in certain homes.

The Energy Company Obligation scheme, aimed at addressing fuel poverty and reducing carbon emissions, mandates energy companies to finance the installation of energy-saving measures like insulation in residential properties, with costs passed on to consumers.

The National Audit Office report exposed widespread deficiencies in the ECO program, pointing to substandard workmanship in the installation of external and internal insulation in thousands of homes, some of which pose immediate health hazards. Possible causes identified include a lack of skilled workers, subcontracting to unqualified individuals, ambiguous standards, and shortcuts by businesses during installation.

Efforts to improve consumer protection in the scheme were implemented by the Department for Energy Security and Net Zero in 2021, with TrustMark overseeing the process. However, shortcomings in the system were only flagged in October of the same year. Ofgem also identified potential fraudulent activities by businesses, estimating false claims ranging from £56 million to £165 million.

Gareth Davies, head of the NAO, emphasized the importance of programs like ECO in addressing fuel poverty but called for urgent reforms to rectify the current issues and prevent future occurrences. Meanwhile, Simon Francis from the End Fuel Poverty Coalition criticized the system for allowing inadequate installations and emphasized the need for quality assurance, trained installers, and swift remediation.

Minister for Energy Consumers Martin McCluskey acknowledged the systemic failures in the solid wall insulation installations under the scheme and assured corrective actions by the government to rectify poor installations at no cost to the affected families. He highlighted ongoing reforms to streamline the process, enhance transparency, and ensure accountability for any errors.