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Contracts on two retrofit schemes referred to Serious Fraud Office
The government has confirmed that cases relating to contracts awarded on two major government retrofit schemes have been referred to the Serious Fraud Office (SFO).
The government has confirmed that cases relating to contracts awarded on two major government retrofit schemes have been referred to the Serious Fraud Office #UKhousingThe Department for Energy Security and Net Zero (DESNZ) revealed this week that contracts relating to the ECO4 and Great British Insulation Scheme were in the hands of senior fraud officials.
The move was revealed in a response to a report from parliament’s Public Accounts Committee (PAC), published in January, which said that “given the likely role of fraud” in poor-quality installations under the schemes, DESNZ should refer the issue to the SFO.
According to the report, Ofgem has estimated that businesses could have fraudulently claimed between £56m and £165m from energy suppliers under the schemes.
More than 30,000 homes that used the two schemes have defective insulation that requires remediation.
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DESNZ’s response to the committee’s report, published this week, said that referrals to fraud officials are the responsibility of Ofgem.
DESNZ said: “The department is aware that, as part of the administration of ECO4 and the Great British Insulation Scheme (GBIS), referrals have been made to the Serious Fraud Office.
“It would not be appropriate for the government to comment on this any further at this time.”
The department did not clarify whether a formal investigation into the referrals has been launched by the SFO.
It said that as a matter of policy, the SFO does not comment on referrals and “neither confirms nor denies investigations until doing so would not prejudice law enforcement activity”.
It added that the department, Ofgem and law enforcement agencies such as the SFO will continue “to engage and work closely together”.
DESNZ has accepted 14 of the recommendations in the PAC report.
These include that households will not have to pay for the remediations bills and that DESNZ will review the risk management processes – both of which have already been implemented.
Other recommendations include extending the fraud risk assessment to levy-funded schemes by spring 2026, and reforming the consumer protection system by summer 2028.
However, DESNZ rejected the committee’s recommendation to stop insulation retrofit schemes unless independent assessors can check every job.
The department said that the non-compliance rates, found under ECO4 and GBIS, have not been replicated in government-funded capital schemes such as the Social Housing Decarbonisation Fund Wave 2 and the Home Upgrade Grant Phase 2.
DESNZ said: “There is no evidence to require an on-site audit for all solid wall insulation installations under government-funded capital schemes.
“In addition to the ongoing programme of on-site audits, the department continues to implement improvements to the current system of compliance, assurance and wider consumer protections.”
A DESNZ spokesperson told Inside Housing: “Any fraud is clearly completely unacceptable – as is failure to fix poor quality installations.
"We work closely with Ofgem to detect, prevent and tackle fraud, and wholly support their referrals to the Serious Fraud Office.
“With our Warm Homes Plan, we will overhaul the system to protect consumers and ensure failures like these are not repeated.”
The SFO has been approached for comment.
The government announced the closure of the ECO4 scheme in last year’s Autumn Budget.
Its Warm Homes Plan, published in January, pledges to establish a new Warm Homes Agency to provide stronger government oversight and drive up quality on retrofit projects.
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