Ed Miliband has taken a blow after a fraud squad was urged to investigate a “catastrophic” £4.6 billion net zero scheme under the watch of his department.
The damning report by the Public Accounts Committee (PAC), which monitors the effectiveness of government spending, urged ministers to refer home insulation schemes to the Serious Fraud Office, after it left more than 30,000 properties with defects. The committee described it as the “most catastrophic fiasco” that had “failed at every level”, and slammed the Energy Security and Net Zero department, claiming it had received ”virtually no attention” from senior government officials, so it took them two years to recognise the scale of the issue.
The Energy Company Obligation scheme (ECO) and the Great British Insulation scheme aimed to insulate homes with poor energy efficiency. However, the committee feared fraud was involved due to the extremely poor quality of the installation.
The ECO was a Government programme first introduced in 2013, which underwent different iterations, and the GBI was launched in July 2023, both during the 14-year Tory rule.
The parliamentary committee said the schemes ECO 4 and GBIS, which began in 2022, were so badly designed they were almost “bound to fail”.
Some 98% of external wall insulation installed up to mid-January 2025 had major defects requiring repair, and some posed immediate health and safety risks, as revealed by the public spending watchdog last year.
The defects likely impacted 32,000 to 35,000 homes during that time, and less than 10% have been located and fixed since.
Sir Geoffrey Clifton-Brown, the PAC chairman, warned: “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. All involved in the system must now move at far greater pace to make good,” reports The Telegraph.
Ministers stressed that the installer is liable, that no household will have to pay for their repairs, and costs of up to £20,000 should be covered by a guarantee if the installer has ceased trading or fails to remediate.
However, they pointed out that installers and guarantee providers were closing and reopening businesses to avoid taking on the responsibility.
MPs also feared the scale of the problem may be much larger than present understanding, and called on the SFO to investigate.
It comes at a disastrous time for the energy department, after Ed Miliband announced a £15billion Warm Homes Plan, to roll out solar panels, heat pumps and insulation.
Sir Geoffrey added: “The public’s confidence will have rightly been shaken in retrofit schemes given what has happened and government now has a self-inflicted job of work on its hands to restore faith in the action required to bring down bills and reduce emissions.”
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.”
MAJOR BLOW FOR ED MILIBAND: Fraud Squad Urged to Investigate £4.6 Billion Net Zero Scheme
A major political controversy has erupted over Britain’s multibillion-pound energy efficiency programmes after MPs called for the Serious Fraud Office (SFO) to investigate potential fraud involving a £4.6 billion insulation scheme. The controversy has placed Energy Secretary Ed Miliband and his Department for Energy Security and Net Zero under intense scrutiny, raising serious questions about financial oversight, contractor accountability, consumer protection, and the management of Britain’s environmental policies.
The findings have created an uncomfortable situation for the Labour government. A programme designed to help households reduce energy consumption, improve insulation, and tackle fuel poverty has instead left tens of thousands of properties affected by defective installation work.
For homeowners, the consequences have been particularly distressing. Some properties have reportedly experienced damp, mould, water penetration, and other problems that have undermined the very purpose of the improvements.
The controversy is no longer simply about whether Britain should invest in cleaner energy. It is about whether government-backed programmes are being managed responsibly and whether ordinary households are being protected when things go wrong.
A £4.6 Billion Scheme Under Investigation Calls
On 23 January 2026, the House of Commons Public Accounts Committee published a highly critical report examining failures within the Energy Company Obligation (ECO4) and Great British Insulation Scheme (GBIS).
Together, the programmes involved an estimated £4.6 billion in expenditure.
The schemes were intended to improve the energy efficiency of homes, particularly properties with poor insulation and households experiencing fuel poverty.
However, the parliamentary committee identified serious weaknesses in the way the programmes were designed, administered, and monitored.
Its findings were particularly concerning because the schemes involved numerous private contractors, energy suppliers, certification organisations, and government agencies, with no single organisation taking overall responsibility for preventing and detecting fraud across the entire system.
The committee argued that the complicated structure created opportunities for poor-quality work and potential financial abuse.
It recommended that the government refer the matter to the Serious Fraud Office to investigate the possible extent of fraud and bring criminals to justice where evidence supports prosecution.
This recommendation represents a significant development, although it does not establish that criminal fraud has been proven or that Ed Miliband personally engaged in wrongdoing.
The report is available through the official parliamentary website.
Thousands of Homes Left With Defective Insulation
Perhaps the most disturbing aspect of the controversy concerns the condition of properties that received government-supported insulation work.
According to the Public Accounts Committee, approximately 98% of external wall insulation installations examined up to mid-January 2025 had major defects requiring remedial work.
The wider programme is estimated to have affected between 32,000 and 35,000 properties during the period examined.
Some defects presented immediate health and safety concerns, while others exposed households to damp, mould, water penetration, and potential structural problems.
For residents, the experience has been extremely frustrating.
Many homeowners agreed to have improvements installed because they believed the work would make their properties warmer, more energy efficient, and cheaper to heat.
Instead, some discovered that their homes had developed additional problems.
Imagine being a household already struggling with rising energy bills, only to discover that an insulation project intended to reduce those bills has left your property damaged.
For vulnerable residents, particularly older people and families with limited financial resources, the consequences can be severe.
The committee warned that the government needed to accelerate repairs and ensure that affected households were not left responsible for expensive remedial work.
Ed Miliband Faces Questions Over Departmental Oversight
As Secretary of State for Energy Security and Net Zero, Ed Miliband is responsible for the department overseeing the government’s energy efficiency policies.
The Public Accounts Committee was particularly critical of the department’s handling of the schemes, arguing that senior officials failed to recognise the scale of the problems for an extended period.
The committee concluded that there had been failures at multiple levels and questioned why the department had not identified the weaknesses earlier.
It also highlighted the absence of sufficiently effective coordination between the organisations involved.
This raises an important political question: how could a government-supported programme involving billions of pounds operate for such an extended period without adequate oversight?
It is important to distinguish between responsibility for the current departmental response and responsibility for introducing the original schemes. ECO4 and GBIS were established before Labour took office in July 2024.
Nevertheless, Miliband’s department must now address the consequences, protect affected households, and demonstrate that future programmes will operate under stronger safeguards.
The political pressure is therefore significant, even without evidence of personal wrongdoing.
Potential Fraud Raises Further Concerns
One of the most serious findings concerns the possibility that fraud may have contributed to the widespread defects.
Ofgem, Britain’s energy regulator, identified installations worth approximately 1.75% of the scheme’s value as fraudulent.
However, the Public Accounts Committee questioned whether this figure represented the true scale of the problem.
It argued that the absence of effective system-wide monitoring and information sharing meant that detected fraud could significantly underestimate the actual level.
The National Audit Office had previously reported estimates suggesting that businesses could have fraudulently claimed between £56 million and £165 million from energy suppliers under ECO.
These figures demonstrate why MPs believe further investigation is necessary.
However, defective workmanship, administrative failures, and criminal fraud are different matters. Investigators would need to establish whether specific individuals or organisations deliberately obtained money through dishonest conduct.
If criminal wrongdoing is established, those responsible should face the appropriate legal consequences.
The wider lesson is that government-funded and government-mandated programmes require effective financial safeguards from the beginning, not only after serious failures become apparent.
Ordinary Households Could Pay the Price
Another important aspect of the controversy is how the programmes were financed.
Although the schemes were government-backed, their costs were borne by energy suppliers and ultimately passed on to consumers through energy bills.
This means households could face financial consequences even if they never directly benefited from the insulation programmes.
For families already struggling with the cost of living, the possibility that money has been wasted through poor administration or fraud is particularly concerning.
Consumers expect energy efficiency schemes to deliver measurable benefits, not create additional financial burdens.
The government has stated that households should not be responsible for the costs of repairing defective installations.
Under the arrangements described by ministers, original installers are expected to correct faulty work. Where installers have ceased trading or fail to undertake repairs, guarantees of up to £20,000 may provide protection, subject to their terms and conditions.
However, the practical challenge is ensuring that affected residents can actually obtain the repairs they need.
Promises of compensation and remediation mean little if homeowners are left waiting for months without effective assistance.
The Government’s Response and the Serious Fraud Office
The parliamentary committee’s recommendation has placed further pressure on ministers to explain what action will follow.
In a parliamentary written answer published on 13 April 2026, the government stated that the Department for Energy Security and Net Zero would respond to the Public Accounts Committee through the standard Treasury Minute process.
That response did not itself confirm that the matter had been formally referred to the Serious Fraud Office.
The distinction is important because recommending an investigation and formally opening a criminal investigation are separate developments.
Nevertheless, the committee’s position makes clear that MPs believe the potential fraud risks deserve much closer examination.
The government must now demonstrate that it is taking the findings seriously and that affected households will receive practical assistance.
Transparency will be particularly important in restoring public confidence.
What Does This Mean for Britain’s Net Zero Ambitions?
The controversy has wider implications for the government’s environmental strategy.
Miliband has placed clean energy, home insulation, renewable electricity, and reduced dependence on fossil fuels at the centre of his political agenda.
Supporters argue that improving the energy efficiency of British homes is essential to reducing emissions and lowering household energy consumption.
However, poorly managed programmes risk undermining public confidence in these objectives.
If homeowners associate insulation projects with defective workmanship, expensive repairs, and bureaucratic confusion, they may become reluctant to participate in future initiatives.
That would create difficulties for the government’s wider plans.
The solution is not necessarily to abandon energy efficiency programmes. Instead, the government must ensure that they are designed properly, independently monitored, and supported by effective consumer protection.
Environmental objectives and financial accountability should work together rather than compete with one another.
A Political Test for Labour
For Labour, the controversy presents a difficult test of its ability to manage public money and deliver major policy commitments.
Opposition politicians can reasonably demand answers about how the schemes were administered, why the problems were not identified earlier, and whether sufficient protections were available to homeowners.
Miliband’s department must also explain what changes will prevent similar failures in future programmes.
The issue could become particularly significant as the government continues investing in its wider Warm Homes Plan.
Taxpayers and energy consumers will want assurances that future spending will produce genuine improvements rather than repeat the mistakes identified by the Public Accounts Committee.
The government’s credibility will depend on the evidence it provides, the speed of remedial action, and whether stronger safeguards are introduced.
Conclusion: Billions Spent, Thousands of Homes Affected, Questions Still Unanswered
The £4.6 billion insulation controversy has exposed serious weaknesses in the administration of Britain’s energy efficiency programmes.
The Public Accounts Committee’s findings concerning defective installations, inadequate oversight, and potential fraud have raised important questions about how public policy is implemented and who is responsible when it fails.
For Ed Miliband, the challenge is to demonstrate that his department can restore confidence, protect affected homeowners, and ensure that future environmental spending is properly monitored.
For the public, the most important issue is straightforward: people should not be left with damaged homes because they trusted a government-supported improvement scheme.
The recommendation for a Serious Fraud Office investigation must now be considered through the appropriate legal and administrative processes.
If criminal wrongdoing is established, those responsible must be held accountable. If institutional failures are identified, they must be corrected.
Britain needs an energy transition that is financially responsible, transparent, and genuinely beneficial to ordinary households.
Net zero policies cannot succeed on political promises alone. They require competent administration, reliable contractors, effective regulation, and public trust.
When billions of pounds are involved, accountability is not optional. It is an essential responsibility of government.