FMB renews calls for mandatory licensing scheme in wake of shock NAO report on retrofit scheme failures

The Federation of Master Builders has renewed calls to introduce a mandatory licensing scheme for all domestic retrofit workers following yesterday’s National Audit Office report on widespread failures in two government energy efficiency schemes.

A survey by the NAO found 98% of homes fitted with external wall insulation through the Energy Company Obligation (ECO) 4 and Great British Insulation Scheme (GBIS) will need remediation work to fix “major issues” including damp and mould.

The report also uncovered evidence of widespread suspected fraud, including falsified claims for installations in up to 16,500 homes and the use of installation claims to facilitate “wider criminal activity”.

FMB chief executive Brian Berry said the NAO’s findings were a “stark reminder of the urgent need for reform”, reflecting a lack of regulation in the domestic building sector which has left homeowners vulnerable to poor workmanship and rogue traders.

“It’s not right that any Tom, Dick or Harry can call themselves a builder, without any minimum standards in place,” Berry said, adding the report’s findings were “deeply concerning but sadly not surprising”.

“As there is little oversight, apart from a complex web of schemes which are frankly covering for a lack of intervention from government, even well-intentioned schemes like ECO risk being undermined by substandard delivery.

“This whole saga has once again tainted hard working builders because rogues have ripped off consumers by falsely claiming money for non-existent schemes, at a time when energy bills are sky high, and then gone on to deliver shoddy work.”

Berry said a mandatory licensing scheme would create a clear route into the industry, raise standards and protect consumers, calling for the government to act on the NAO’s recommendation to introduce licensing in the upcoming Warm Homes Plan.

Gavin Smart, chief executive of the Chartered Institute of Housing, said the NAO report had exposed “systemic failures” in the delivery of government retrofit schemes which had led to “devastating consequences” for some homeowners.

The CIH has also called for enhanced oversight and quality assurance in future schemes, alongside an improved system of consumer protection and redress.

The ECO4 and GBIS schemes attempted to reduce fraud and poor work by separating the retrofit assessor and coordinator roles. However, the NAO found that in practice these roles are often contracted and paid by the installer, and sometimes employed by the same business.

Of homes fitted with internal insulation through the two schemes, 29% were found to contain major issues in need of remediation, with a small percentage of problems with both internal and external insulation posing “immediate” health and safety risks.

The Department for Energy Security and Net Zero has said it is planning to apply lessons learned from the two schemes in the design of future schemes including the Warm Homes Plan.