insulation

nobody checked

Problem statement

Retrofit at scale is a workmanship problem before it is a technology problem, and Britain's flagship retrofit subsidy has just shown what happens when the quality-assurance layer is not built to the same scale as the installation layer. Under the Energy Company Obligation (ECO4, 2022–26) and the Great British Insulation Scheme (GBIS, 2023–26), 28,000 homes received external wall insulation (EWI) and 45,200 internal wall insulation (IWI). Statistically representative audits of 758 homes commissioned by DESNZ and Ofgem found that "98% of homes with external wall insulation have major issues requiring remediation (between 22,000 and 23,000 homes)" and 29% of IWI homes (9,000–13,000): 92% of EWI homes have major issues that "will affect the insulation's performance, often creating the risk of water ingress and mould," 6% have "health and safety risks that require immediate correction, such as inadequate ventilation" (elsewhere the report cites exposed live cabling and blocked boiler ventilation), and just 1% "fully met the PAS 2035 standard." The unsolved problem is not how to install insulation correctly — PAS 2030/2035 specify it — but how to design a subsidised, high-volume, many-small-installer retrofit market whose assurance system cannot be gamed and actually scales with volume.

Why this matters

Solid-wall homes are the hardest and most carbon-intensive part of the housing stock to decarbonise, and every country pursuing renovation-wave targets will need to push wall insulation through thousands of small contractors paid by public or obligated money. Here the failure produced tens of thousands of damp-prone homes occupied largely by low-income and vulnerable households, an Ofgem estimate that retrofit businesses "falsified claims for ECO installations in between 5,600 and 16,500 homes to potentially claim between £56 million and £165 million," and a remediation programme that by September 2025 had fixed only 8% of affected EWI homes and 10% of IWI homes, with 40% of contacted households refusing auditors entry. The NAO's headline conclusion: "there have been clear failures in the design and set-up of ECO4 and GBIS and their consumer protection and quality assurance system." Because damp and mould damage compounds, the cost of the same defect rises the longer it goes unfound — and public trust in retrofit, the scarcest input to any renovation wave, erodes with each headline.

What’s been tried and why it hasn’t worked

The system was designed as an answer to earlier failures: after the 2016 "Each Home Counts" review, government built an arm's-length quality regime — installers certified to PAS 2030 by UKAS-accredited certification bodies, projects overseen by PAS 2035 retrofit coordinators, all lodged with TrustMark, energy suppliers accountable to Ofgem, DESNZ setting policy. The NAO found each layer failed in a specific, mechanistic way. The audit rate was set by standard, not risk: PAS 2031 required certification bodies to inspect only "between 3% and 7% of external wall insulation and between 4% and 10% of internal wall insulation installed by each installer," and "no-one asked if they were adequate to collectively show that most ECO measures were installed correctly." Installers gamed the sample: they could be "certified by multiple certification bodies or transferring their certification between bodies," resetting their history to earn the lowest audit rate, and certification bodies' records "understated the number of installations compared to the installations lodged in TrustMark's data warehouse" — the auditors did not know how many jobs existed. The NAO adds that "it was commercially beneficial to installers to remediate the small proportion of projects subject to audit rather than meet the required PAS standards across all their projects." The independent check inside each project was captured: retrofit coordinators, "originally intended as a control against the incentives on the installer," were "often contracted or employed by the installer." TrustMark's funding model "did not allow it to employ enough trained staff who could audit against PAS 2035," its analytics were not operational until late 2024, and until March 2025 there was no common way even to categorise the severity of audit findings. Root causes named by DESNZ, Ofgem, TrustMark and UKAS: "poor workforce skills, including subcontracting work to others who are not competent or registered with TrustMark; uncertainty over how the different standards apply to different jobs; and shoddy work produced as retrofit businesses 'cut corners' in both the design and installation." Fixes so far — a 20% audit sample for ECO4 EWI, a ban on multiple certifications, data-sharing agreements — patch the sample without changing the incentive that made gaming pay.

What would unlock progress

The reframing is to treat installation quality as an adversarial verification problem rather than a compliance-paperwork problem: sampling that installers cannot predict or dilute (drawn from a single register of every job, with the rate set by risk and published), independence for the coordinator role (paid from the subsidy, not by the installer), payment structures that hold back a share of the subsidy until an independent post-installation check clears, and audit findings that are categorised consistently so trends surface within weeks rather than years. Adjacent precedents: financial-audit independence rules and rotation, food-safety and aviation-maintenance inspection regimes that scale audit intensity to installer history using a single mandatory registry, and photographic/geotagged evidence requirements used in agricultural subsidy verification. Cheaper verification (guided photo capture at defined stages, thermal imaging at handover, occupant-reported checklists) would let a higher fraction of jobs be checked at the same budget.

Entry points for student teams

A team could design and simulate a risk-based, gaming-resistant audit-sampling scheme for a market of many small installers — modelling installer strategies (multi-certification, under-reporting, remediate-only-the-audited) and finding the sampling and payment rules under which cutting corners no longer pays. A product team could prototype a stage-gated photo/thermal evidence app for EWI/IWI installs, aligned to PAS 2035 checkpoints, and test with a local installer or housing association. A policy team could produce a comparative design proposal for a successor scheme (retrofit-coordinator independence, retention payments, single job register), using the NAO evidence as the baseline. Relevant skills: mechanism design/game theory, building physics and retrofit practice, data systems, public-policy analysis.