Britain’s fraud squad has been urged to probe a ‘catastrophic’ £4.6billion Net Zero scheme which is feared to have left thousands of homes unsafe.
In a scathing report, MPs have criticised the Government’s botched insulation scheme that left more than 30,000 properties with defects.
The Commons public accounts committee (PAC) has branded the home retrofit scheme the ‘most catastrophic fiasco’ and found that fraud probably played a major role.
The committee has warned that some of the defects pose ‘immediate health and safety risks’ and has urged the Government to refer it to the Serious Fraud Office (SFO).
MPs on the committee also took aim at Ed Miliband’s Department for Energy Security and Net Zero (DESNZ), saying senior officials took two years to recognise the scale of the problem.
More than £4.6billion is estimated to have been spent under two household energy-saving schemes: the Energy Company Obligation (ECO) scheme and the Great British Insulation scheme.
The cost is borne by energy suppliers, but passed on to consumers as higher bills. Despite the huge costs, the schemes have been derailed by poor installation.
The ECO programme, which aimed to improve energy efficiency and slash bills, instead left between 32,000 and 35,000 homes with faulty insulation. In some cases, this caused structural issues, damp and mould.
MPs have criticised Energy Secretary Ed Miliband, saying senior officials took two years to recognise the scale of the problem
MPs warned that fraud was likely to have played a major role in the poor quality of insulation. Energy regulator Ofgem has identified a fraud rate of 1.75 per cent of the work conducted – equivalent to more than £80million. But MPs said this figure was likely to be a ‘significant underestimate’.
Sir Geoffrey Clifton-Brown, the PAC chairman, called ECO’s failure ‘the most catastrophic fiasco’ that he had seen in his 12 years on the committee.
He said: ‘Potentially thousands of people are now living with health and safety risks in their homes and despite Government’s protestations, we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works.’
Ministers have said no household should have to pay to fix the issues, with the original installer liable to foot costs of up to £20,000 covered by guarantee.
But the PAC report warned households do not have any real assurance that the repair costs will be covered where they exceed this cap.
The cross-bench group was sceptical that the original installers and guarantee providers will be able to survive the potential scale of claims, citing cases with damage put at more than £250,000.
Minister for energy consumers Martin McCluskey said: ‘Every household with external wall insulation installed under these two schemes are being audited, at no cost to the consumer.’
A DESNZ spokesman said: ‘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.’
