PAC Report: Three Gears of Failure and Corruption

What happens when an industry of oversight, fails to self-regulate? Is funded by those who abuse it. And shows no accountability for those it is legislated to protect? A full public enquiry is needed to ensure homes and lives are secured, trust is restored, and history doesn’t repeat itself.

ECO4 was meant to tackle fuel poverty and cut bills. Instead, Parliament’s Public Accounts Committee (PAC) has described a clear and catastrophic failure in key measures, leaving tens of thousands of households with defects and people dealing with damp, mould, damage to homes and possessions, affecting their health, wellbeing, and finances.  When homes are destroyed under government schemes, it is families and the vulnerable left to pick up the pieces.

By “private wealth”, I mean the obvious: scheme payments and considerable profits flow through the supply chain, while households and billpayers carry the consequences when quality collapses. Regulators are funded by the trade, and distanced from consumers.  Asymmetry that becomes impossible to ignore when things go wrong at scale. And the lives of those the system was intended to serve, are overlooked in favour of reward and self-preservation.  The insulation of an industry, over the insulation of a home.

Given the scale and seriousness of findings in today’s Public Accounts Committee report, the question is not “did something go wrong?”
It’s: what gear of failure is this system in? And, might the criteria of maladministration, institutional or systemic corruption have been met?

To keep this simple, I’m using “corruption” here in a plain-English sense: a system becoming corrupted away from its purpose and/or being exposed to corruption risk. I’m not claiming that any named organisation or individual has committed a crime. The point is to describe the failure modes accurately—because future success depends on our ability to assess and recognise the failures of the past. Though, the need to properly review whether these thresholds have been met, is not just about learning and development.  It cuts to the heart of justice, culture, who we are, and what we strive for as a society in which party lines are becoming increasingly blurred.

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The PAC reports that almost all (94%+) external wall insulation, and a significant share of internal wall insulation, installed under ECO4/GBIS up to mid-January 2025 have major issues needing remediation—amounting to around 32,000 to 35,000 homes, with more affected after that date. A smaller—but still alarming—portion is assessed as posing immediate health and safety risks.

It also reports that, as of early September 2025, fewer than 10% of homes estimated to have major issues had been remediated, almost a year after concerns were raised.

And it’s not just about defects. The PAC’s central message is about the system: serious failings at multiple levels, a consumer protection setup that didn’t protect, and fraud exposure that wasn’t treated with the seriousness it deserved.

Furthermore, in light of this week’s announcement of the £15bn Warm Homes Plan, scrutiny over the ECO4 delivery of solar panels and heat pumps, was largely absent, both from the NAO report, and from the PAC Committee (13^th November 2025).  Avoiding scrutiny is one thing, but avoiding the plight of homeowners whose bills have increased, rather than decreased, is another entirely.

That’s the platform. Now the gearbox.

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This is the “process failure” gear. No need to speculate about motives. Just look at oversight, governance, pace of action and resolution.

The PAC points to:

• Slow recognition and weak supervision. It says senior officials took far too long to recognise the scale—describing this as very poor supervision.
• Basic governance hygiene failing. It highlights missing minutes and weak records, leaving decision-making hard to evidence and defend.
• Risks logged… then tolerated. It describes quality and standards risks being known early, yet not acted on with enough urgency or grip.
• A remediation response too slow for the harm involved. It links delays directly to rising risk of damage and people living with unaddressed health and safety concerns.  See our recent post regarding TrustMark complaints in excess of one year.

If ECO4 is “only” maladministration, it is still brutal: a public protection system that can’t move at the speed of harm and results in serious public health risks.

In the case of our own work, meetings with officials have often been offered but not materialised, despite the known plight and health risks of victims. 

But Gear 1 doesn’t fully explain why accountability keeps dissolving. That’s Gear 2.

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This is not the “bribes” story. It’s not even necessarily illegality.

It’s what happens when a system is designed so that:

• responsibilities are spread so widely that accountability dissolves, and
• the dominant incentives become delivery, continuity, and liability containment, rather than consumer outcomes.
• this corresponds with cover-ups and a culture of opaqueness, which actively avoids transparency and scrutiny

The PAC describes exactly the kind of structure where that drift becomes routine:

• “Arm’s length” by design; limited grip in practice. It points to the way ECO was designed to operate at arm’s length, leaving the centre with limited oversight and influence.
• A system so complex that no one can describe it end-to-end. It relays the finding that nobody could fully explain how the whole consumer protection and quality assurance system was meant to work—and that there wasn’t a single, clear description of it.
• Siloed actors; unclear responsibilities. It says organisations focused on their own tasks rather than whether the system protected consumers, and that responsibilities were unclear.
• Independence gaps that corrode trust. It highlights the conflict risk created when quality oversight roles can be appointed or contracted by the installers they are meant to check—and it’s clear that reforms fall short while independence is not mandatory.

This is how a scheme can be “working as designed” on paper while failing the public in reality: the system becomes excellent at processing and terrible at protecting.

A further example rests in the core premise of the ECO4 scheme: the reduction of emissions and carbon savings.  However, these savings are believed to be substantively over-reported.  In many cases we are aware of, there have been clear failings to deliver benefits in accordance with the spirit of the ECO Order 2022.  Possibly many thousands. Despite non-delivery – including many cases of bills rising, rather than falling – cases appear to be reported as successful in the public record, irrespective of the misery they have caused.  Such reporting subsequent to known breaches, defects, fraud, misrepresentation, and over-forecasting, may amount to a material misrepresentation of scheme value.

If we’re in Gear 2, the cure isn’t another leaflet or hotline. It’s structural: simplify the system, centralise grip, and hard-wire the independence of regulators, advocacy and safeguarding.  Real-world data is urgently needed, both to expediate resolution of complaints, and to significantly increase the accuracy of reporting.

And then there’s Gear 3 — the one the PAC itself drags into view.

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This is the sensitive gear, so let’s be precise.

The purpose of this article is not to point to any individual case of fraud, though its systemic presence is well-recognised. The PAC identifies conditions consistent with serious fraud exposure, and recommends escalation given that the system has proven incapable of sufficient constraint, measurement, or enforcement.  Instead, calls for fraud checks have appeared to receive the cold shoulder.

The PAC highlights:

• Fraud risk wasn’t properly baked in at the start. It says a full fraud risk assessment wasn’t completed before ECO4 was implemented, and that ownership of some known fraud risks was only clearly allocated later. To our own experience, fraud processes have been exceptionally weak, both in reporting, monitoring, and enforcement.
• No one owns proactive system-level fraud detection. It says the regulator’s role is largely limited to investigating allegations, and that no organisation is responsible for proactively looking for fraud across the system—nor does any one body hold all the data needed to do that well.
• Detected fraud likely under-states the true level. It references detected fraud figures and then makes the blunt point: given the scale of non-compliance, it is implausible that fraud is as low as detected numbers suggest.
• And it explicitly points to the Serious Fraud Office. The PAC report clearly states that the Serious Fraud Office should look at the case and recommends the Department refer the issue. We strongly support this demand, as was further echoed by Liz Saville Roberts in parliament this week.
• The backdrop is one of weakly mitigated self-regulation.  Grant monies are determined based on ‘Annual Bill Savings’ (ABS) as a simulated metric of real-world savings, rooted in RdSAP, itself arguably weakly correlated to building performance.  Less scrupulous installers have been able to write their own cheques in mis-reporting certain parameters, which correspond to higher grant payments. The scale of this is likely serious, though unknown.

That Parliament / Ofgem is saying: “we take it seriously” simply isn’t enough. Indeed, when raised by Liz Saville Roberts MP, the narrative was quickly returned to the Warm Homes Plan.  This in itself is no allegation; simply the prioritsation of future focus, over past scrutiny. 

What makes this alarming is not just the loss of learning that can be achieved through scrutiny, but the deep injustice represented by the imbalance of supercars and mouldy walls.

So: are we in third gear? The role of the PAC is not to prosecute— but it has laid out a picture of widespread failure and weak fraud architecture that makes third-gear risk a probability, not a conspiracy.

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You can call it maladministration. You can point to dynamics that might be present in institutional corruption. There is also clear risk of systemic corruption. And this is why further independent review is so important. We cannot let this become an acceptable part of our culture.

However you label it, the shape is hard to deny:

A public failure — inspiring private wealth — with largely absent protections — on an industrial scale.

If government disagrees, it has clean, credible ways to prove it, with numbers, not rhetoric.

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A full review of ECO4 is essential to the presence of justice in the wake of scandal.  Its aversion and diversion emblematic of the precise problems that require urgent attention.

1) Follow the PAC recommendation: refer ECO4/ECO fraud exposure to the Serious Fraud Office

The PAC has already recommended referral. That referral should happen, and it should be transparent: scope, timeline, and public reporting. If there’s nothing there, clear it publicly. If there is, confront it properly.

2) A full National Audit Office end-to-end review of ECO4

Not a narrow “installation quality” post-mortem. An end-to-end review of ECO4’s design, governance, quality assurance architecture, fraud controls, failed consumer protections, and the credibility of the promise that households won’t pay when the standard remediation route fails.

3) Independence must be mandatory — not optional

If the checker can be appointed by the doer, trust is structurally impossible. Independence needs to be a hard requirement, properly resourced, and enforced across future retrofit schemes—not treated as a nice-to-have.

4) Promises to ‘clear up the mess of ECO4’ must correspond with actions

No matter how eager government and industry are to get behind the Warm Homes Plan, it is of fundamental importance to the restoration of trust in future schemes, that present schemes are assessed and remedied, and promises delivered.

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Gear 1 can be fixed with competence and urgency.
Gear 2 needs systemic redesign and independence.
Gear 3 demands external scrutiny — because once fraud risk becomes survivable, the system will keep producing victims until the incentives change.

The question is, what happens when scrutiny is absent and its importance diminished?

The PAC has already raised the alarm. The only acceptable response now is scrutiny with teeth — and repairs completed properly, quickly, and without households being left to absorb the cost.