MPs Demand Fraud Squad Investigation into 'Catastrophic' £4.6bn Net Zero Scheme
Britain's fraud squad has been urged to launch a major investigation into a £4.6 billion Net Zero insulation scheme that MPs have branded a catastrophic fiasco, leaving thousands of homes potentially unsafe. In a scathing new report, the Commons public accounts committee (PAC) has criticised the Government's botched home retrofit programmes, which have left more than 30,000 properties with serious defects.
Immediate Health and Safety Risks Identified
The cross-party committee has issued a stark warning that some of the defects uncovered pose immediate health and safety risks to occupants. The PAC has formally urged the Government to refer the matter to the Serious Fraud Office (SFO) for a full criminal investigation, stating that fraud probably played a major role in the scheme's failures.
Sir Geoffrey Clifton-Brown, the PAC chairman, described the Energy Company Obligation (ECO) scheme's collapse as the most catastrophic fiasco he has witnessed during his twelve years on the committee. He expressed grave concerns about the financial exposure facing affected households.
Scheme Failures and Government Delays
The report highlights two major household energy-saving schemes:
- The Energy Company Obligation (ECO) scheme
- The Great British Insulation scheme
Together, these programmes have cost an estimated £4.6 billion, with costs borne by energy suppliers but ultimately passed on to consumers through higher bills. Despite this enormous expenditure, the schemes have been derailed by widespread poor installation practices.
MPs on the committee specifically criticised Ed Miliband's Department for Energy Security and Net Zero (DESNZ), revealing that senior officials took two full years to recognise the scale of the problems emerging from the insulation programmes.
Widespread Defects and Fraud Concerns
The ECO programme, which aimed to improve energy efficiency and reduce household bills, has instead left between 32,000 and 35,000 homes with faulty insulation. In numerous cases, this has caused:
- Structural issues compromising building integrity
- Persistent damp problems
- Dangerous mould growth
Energy regulator Ofgem has identified a fraud rate of 1.75 per cent of the work conducted – equivalent to more than £80 million in potentially fraudulent claims. However, MPs have warned that this figure likely represents a significant underestimate of the true scale of fraudulent activity within the schemes.
Financial Protection Gaps for Homeowners
While ministers have stated that no household should have to pay to fix the issues, with original installers liable for costs up to £20,000 covered by guarantee, the PAC report reveals significant protection gaps. The committee warned that households have no real assurance that repair costs exceeding this cap will be covered.
The cross-bench group expressed scepticism that original installers and guarantee providers would survive the potential scale of claims, citing individual cases where damage estimates exceeded £250,000 per property.
Government Response and Ongoing Audits
Minister for energy consumers Martin McCluskey stated: Every household with external wall insulation installed under these two schemes are being audited, at no cost to the consumer.
A DESNZ spokesman responded to the report by saying: It is categorically untrue there are widespread health and safety risks – for the vast majority, this means a home may not be as energy efficient as it should be.
The PAC report represents one of the most damning indictments of a government environmental scheme in recent years, raising serious questions about oversight, implementation, and financial accountability in Britain's transition to Net Zero.
