Four people have been arrested as part of a £44m fraud investigation linked to the Energy Company Obligation (ECO4) scheme.
Although the scheme, which required energy suppliers to fund home insulation and heating upgrades for lower-income households, has now closed, investigators believe some firms may have claimed payment for work that was never completed.
The case adds to the growing scrutiny of retrofit insulation programmes in recent years.
Article continues belowWhat the £44m fraud investigation is about
The Serious Fraud Office (SFO), working with the National Crime Agency, carried out coordinated raids across England, arresting four individuals on suspicion of conspiracy to defraud.
The investigation centres on claims that companies submitted invoices for insulation work under ECO4 that was either not carried out or only partially completed.
Numerous other firms are being examined in connection with contracts between 2022 and 2024. Authorities believe energy suppliers may have been defrauded of up to £44m through false or inflated claims.
SFO director Graham McNulty said: “This scheme was designed to reduce carbon emissions, help households cut costs and stay warm – instead, in many cases we suspect little or no work was done.”
Wider concerns over insulation schemes
The ECO4 programme has previously faced criticism for repeated failures, including inconsistent installation quality, poor workmanship, and limited oversight across a fragmented supply chain of contractors and subcontractors.
Industry commentary and homeowner reports have highlighted cases of insulation being fitted incorrectly, unsuitable measures being installed, and disputes over whether work met required standards.
MPs have also raised concerns in recent years about how effectively schemes like ECO4 were monitored, particularly given the number of separate organisations involved in delivery and compliance checks.
What happens next
The investigation forms part of a wider crackdown on economic crime, with authorities urging installers, assessors and others involved in ECO4 projects to come forward with information.
Solicitor General Ellie Reeves said: “This scheme was meant to tackle fuel poverty and improve people’s homes. I am sickened by those who want to profit off the back of a scheme designed to help vulnerable people, and I’m confident the SFO’s investigation into allegations of substantial fraud will deliver the answers victims and the public deserve.”
The ECO4 scheme has now ended and is being replaced by the government’s Warm Homes Plan, which will continue funding energy efficiency upgrades such as insulation, solar panels and heat pumps.
