In 2022 the previous government directed energy companies to spend billions of pounds, raised via levies on energy bills, on insulating homes across the UK, targetting people receiving benefits and those in very poorly insulated homes.
However, the NAO found there were “clear failures” in the design of the Energy Company Obligation (ECO) scheme, which resulted in “poor-quality installations as well as suspected fraud”.
Gareth Davies, head of the NAO, said it was now up to the Department for Energy Security and Net Zero (DESNZ) to ensure the businesses responsible repaired “all affected homes as quickly as possible”.
“It must also reform the system so that this cannot happen again,” he said.
The NAO, which monitors how public money is spent, cited an “under-skilled workforce”, businesses cutting corners and uncertainty over which standards to apply to which jobs, as some of the reasons for the substandard work.
It found that between 22,000 and 23,000 homes that had received external wall insulation, and up to 13,000 properties with internal wall insulation were now in need of repairs.
A small percentage of installations – 6% for external and 2% of internal insulation – posed an “immediate health and safety risk” from faults such as exposed live electrical cabling or blocked boiler ventilation, it said.