Minister’s pledge to act over ‘jaw-dropping’ scandal
When Martin McCluskey arrived for his first day at work as Minister for Energy Consumers last autumn, he found a document containing shocking revelations at the top of his in-tray.
He must have recoiled when he read the National Audit Office (NAO) report which exposed what MPs have described as the “abject failure” of a Government insulation scheme which was supposed to ensure vulnerable consumers had a safe, warm place to call home.
The NAO found that 98 per cent of external and 29 per cent of internal wall insulation installed in connection with these schemes up to mid-January 2025 was defective.
"To be blunt, it was absolutely jaw-dropping to have a system that was so broken,’’ he told The Yorkshire Post. “That you could end up with a 98 per cent failure rate was appalling.”
The Commons Public Accounts Committee (PAC) warned that the Government-backed botched insulation scheme had left affected households potentially exposed to unaffordable repair bills.
The Energy Company Obligation (ECO) programme, which aimed to improve energy efficiency and slash bills, instead left more than 30,000 homes with faulty insulation. In some cases, this caused structural issues, damp, mould and health-and-safety risks.
Sir Geoffrey Clifton-Brown, PAC chairman, called ECO’s systemic failure “the most catastrophic fiasco” that he had seen in his 12 years of serving on the committee.
Mr McCluskey’s response has been robust. “We inherited a broken system from the previous government,’’ he said. “It was not fit for purpose and had multiple points of failure. We are cleaning up this mess."
He told The Yorkshire Post: "There are two tasks for us; how do we remediate and make sure that we put right this work that was done under ECO4, and how do we look forward, especially now we have got the Warm Homes plan out of the door to what we will do in the future. Retrofit is going to play a massive role in making sure people have energy efficient homes.
"On the first of these, we're offering an audit to every single household that we have identified as having been affected so that's around 30,000 in total,” he added.
These households have already been contacted by Ofgem, the scheme administrator, to be told that steps are being taken to arrange an audit, said Mr McCluskey, who was elected as MP for Inverclyde and Renfrewshire West at the 2024 General Election.
"We're working at pace through those 30,000,’’ he added. “We're working at about 1,000 a month at the moment but that will number will ramp up.”
Mr McCluskey, who worked in the public sector and then for the international development charity VSO UK after graduating from Oxford University, acknowledged the misery inflicted on thousands of consumers by the shoddy workmanship.
"Sometimes when people are contacted they don't want the installers back in their home because they have been so stung by this,’’ he added. “I've been doing a lot of work with MPs in areas that have been particularly affected. We want MPs to ensure their constituents take up the offer of the audit because this is the route to remediation.
"This is how this is going to get fixed. It's really important that people respond to that,’’ he added.
Mr McCluskey stressed that swift, decisive action would be taken to tackle the worst cases of faulty installation. He added: "If we find a Category 1 problem in the audit, where there's a risk to health and safety, the standard is that has to be made safe within 24 hours. That's what we're holding the installers to.
"The PAC report is a very useful exposition of all the issues and points us in the right direction for what we need to do to fix it. I would pick out one point of the PAC report; it's suggested in the language that all 30,000 are unsafe, that isn't true.
"Out of all the ECO4 installations, 92 per cent had a major issue where the energy efficiency did not operate to a level in which we want it to and 6 per cent were in category 1. The 6 per cent within Category 1 is where there is a health and safety issue.
"Every single one of these installations is covered by a guarantee,’’ he added. “The guarantee covers the work up to £20,000. In the vast majority of cases, those guarantees will cover the work that needs to be done.
"We're working through with the supply chain where there are issues where remediation may cost more than £20,000 but I am absolutely clear that no householder should have to pay for remediation of work under ECO4 that's gone wrong. As the minister responsible I don't want to see any householders have to go into their own pockets to pay for any of this.”
The PAC report also called for the Serious Fraud Office to be mobilised to investigate the extent of fraud related to the poor quality installations.
Mr McCluskey said that Ofgem and DESNZ (Department for Energy Security and Net Zero) already communicate on all aspects of the schemes.
Ofgem can reject measures found to be fraudulent based on evidence it receives. He stressed that Ofgem doesn’t have the powers to directly enforce against fraudulent activity. It can and does, refer cases to relevant authorities, including the police and the Serious Fraud Office, he added.
"We've got to have a consumer protection landscape that can protect everyone who is going to retrofit their homes. We've announced we will have a stronger system of consumer protection. We're going to consult on that in a few months.
"We've also announced the establishment of the Warm Homes Agency which will provide people with advice from the start of the retrofit process. We're trying to bring this entire landscape of advice and guidance together and make it a lot more coherent.”