NAO Reveals Near‑Total Defects in Retrofit Programme

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A recent National Audit Office (NAO) investigation has uncovered widespread failures in the government’s energy efficiency retrofit programme, calling into question the integrity and delivery of critical upgrades intended to help homes reach net zero performance. According to the report, an astonishing 98% of external wall insulation installations across 22,000 to 23,000 homes were found to have major defects, with 6% presenting immediate health and safety hazards including damp, mould or inadequate ventilation. Internal wall insulation was similarly problematic, with 29% of properties found defective and 2% posing serious risks. Despite the scale of the issues, remediation by September 2025 remained limited only 8% of external and 10% of internal insulation defects had been addressed. Projected costs for repairs vary widely, from £5,000 to £18,000 per property externally and £250 to £6,000 internally, with extreme damage cases exceeding £250,000 for some homeowners. The NAO also suspects fraud, estimating between £56 million and £165 million in payments may have been improperly claimed for work that was never completed. The failure has been attributed to fragmented oversight across DESNZ, Ofgem, certification bodies and energy suppliers, with no single body accountable for quality assurance or consumer protection. The programme was launched without a fraud risk assessment, leaving it vulnerable to abuse.

This exposes serious systemic weaknesses in the implementation and governance of retrofit schemes, prompting calls for immediate remedial action.

What this means: These findings represent a major setback for the UK’s built environment net zero efforts, demonstrating how poor oversight can undermine both climate ambitions and public trust. The high cost and health implications of failing installations are likely to reverberate across the sector, increasing pressure on government and industry to reform quality controls and accountability mechanisms. Ensuring comprehensive and transparent remediation will be critical if retrofit programmes are to retain credibility and deliver genuine progress toward low‑carbon housing.

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