UK Insulation Schemes Left Most Homes With Faulty External Work

(Bloomberg) -- Nearly all British homes that had external wall insulation installed with funding from two government-run programs were left with faulty workmanship that risks damp and mold. 

A report from the National Audit Office (NAO) found that about 22,000 — or 98% — of the homes that had this work done under the Energy Company Obligation (ECO) 4 and the Great British Insulation Scheme (GBIS) require remediation. The findings come after an audit by the UK government and the energy regulator revealed the jobs had been badly carried out in almost all cases, citing poor skills, cut corners and outsourcing to incompetent workers. 

The NAO blamed the problems on the design and set-up of the programs, which had limited government oversight on the quality of the workers and contractors involved. The government is now overseeing remediation on thousands of homes to fix defects, at a cost of around £5,000 to £18,000 per property for external wall insulation. The most extreme case cost £250,000 to resolve because of mold and rot, the NAO said.

The UK has set targets to improve home insulation as part of efforts to cut energy bills and lower carbon emissions. To meet these goals, it launched programs funded by energy companies to provide free or subsidized insulation and other energy-saving upgrades for households. Each supplier must deliver a set amount of bill savings through energy efficiency upgrades, based on their market share.

ECO programs are aimed at low-income households or people with disabilities, while the GBIS is open to anyone living in a home with a low energy efficiency rating.  

The NAO has raised concerns about installations done before Jan. 16, 2025 through the most recent iteration of the lower-income program, ECO4, launched in April 2022, and the GBIS, which was created in March 2023. Both programs are due to end next March.

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