Fraud Squad Urged to Probe £4.6bn Net Zero Scheme After ‘Catastrophic’ Failures

Summary: A parliamentary watchdog has urged ministers to refer a £4.6bn home insulation programme to the Serious Fraud Office after widespread defects, suspected fraud, and mounting fears households could face unaffordable repair bills. The scheme sits at the centre of the Government’s net zero strategy.

Why is a net zero insulation scheme under investigation?

Related: Report demands abolition of Ed Miliband’s net zero ministry over soaring bills

MPs have called for a fraud investigation into a flagship energy efficiency programme after concluding it has failed on delivery, oversight, and value for money.

The Public Accounts Committee found tens of thousands of homes were left with defective insulation, despite billions being spent through government-backed schemes.

What went wrong with the insulation programme?

The scheme relied on energy suppliers funding insulation work, with costs passed on to bill payers. In practice, poor-quality installation became widespread.

Investigators found that almost all external wall insulation installed during a key period contained serious defects, some posing immediate safety risks.

How many households are affected?

Between 32,000 and 35,000 homes are estimated to have been impacted so far, with the true number still unknown.

More than a year after the scale of the problem became clear, fewer than one in ten affected homes had been identified and repaired.

Is fraud suspected?

The energy regulator has already identified fraud equivalent to more than £80m of work, but MPs warned this likely understates the real scale.

The committee urged ministers to involve the Serious Fraud Office to determine whether criminal behaviour played a significant role.

“This is the most catastrophic fiasco that I have seen,” the committee chair said, warning that thousands of households may still be living with unresolved safety risks.

Who pays when things go wrong?

Ministers insist households will not be left to cover repair costs, arguing installers or guarantee schemes are responsible.

However, MPs found repair bills can exceed the £20,000 guarantee cap, citing cases where remediation costs ran into hundreds of thousands of pounds.

Why this matters now

The findings land as the Government prepares to expand green retrofit programmes under a new £15bn Warm Homes Plan.

MPs warned that confidence in future net zero schemes is at risk unless accountability improves and existing failures are properly resolved.

“The public’s confidence has been shaken,” the committee concluded, adding that restoring trust will require faster action, clearer responsibility, and tougher enforcement.

Government response

The Department for Energy Security and Net Zero rejected claims of widespread danger, saying most cases involved homes being less efficient rather than unsafe.

Critics argue that minimising the issue ignores both the financial exposure for households and the credibility damage to the wider net zero agenda.