ECO4 Scheme Redress

Jim Shannon Excerpts

Wednesday 2nd July 2025 Westminster Hall

[Wendy Chamberlain]

I will go on to mention the particular challenge with older properties, but my hon. Friend’s example illustrates exactly what the issue is. This scheme is under the auspices of Ofgem and is funded through the Government levy on energy bills, but does not have any real oversight, so consumers end up being let down.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for securing this debate. She always brings applicable issues to Westminster Hall, and today is as an example of that, with the horrific example of the almost inconceivable standard of work done to her constituent’s house.

The ECO4 scheme does not apply in Northern Ireland, where we have a fuel assistance scheme. Eligibility can be very tight and residents with more than a certain amount in their savings accounts find that they may not qualify. Does the hon. Lady agree that more could be done to loosen the rules for our elderly generation, particularly in boiler replacement or energy schemes?

[Wendy Chamberlain]

It would not be a Westminster Hall debate without an intervention from the hon. Member. He illustrates that, although this is a GB scheme and not applicable in Northern Ireland, consumers and more vulnerable residents in Northern Ireland face the same challenges regarding energy efficiency. The Government have a responsibility, working with the Northern Ireland Assembly, to improve the situation there.

We need to get this right, not just so there is faith in the schemes—although that is vital—but so works under them do not end up costing people even more in lost energy costs. It is clear that some things are going badly wrong under the ECO schemes as they stand. The Government need to address them for the remainder of properties that might do upgrades under ECO4 and for future iterations of the scheme.

First, there is a complete lack of transparency in how households are driven to the scheme and, as far as I can tell, there is no regulation either. I have talked about how Jackie and her husband felt railroaded from wondering if they would be entitled to anything for upgrades, to their home being pulled apart. She is not a vulnerable person, but she thinks that the company she dealt with was totally unprepared for being challenged over what was happening. Another constituent who had a terrible outcome under the scheme has described themselves as vulnerable and feels that the system was set up to target people like them.

As my team and I have gone further into such cases, I was surprised that more MPs are not shouting about this issue. Clearly, it is not limited just to one company or to North East Fife. When I spoke to Fuel Poverty Action this week, it told me that it is seeing only the most determined victims complaining—the rest are highly vulnerable people. From what I have seen, if companies offer to pay any compensation at all after months of fighting—even if it will not cover the cost of the remedial works—it is on the condition that all complaints be withdrawn. I therefore cannot help but wonder how many people have felt that they had to accept, and now are not in a position to tell us about their experiences.

Secondly, the funding model for ECO4 places incentives on companies to upgrade rural homes, which my hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) referred to. I understand the logic of that, but rural homes, as he said, tend to be a lot older and less uniform than urban ones, so we would ideally want a proper survey to be not only done, but carried out by a specialist retrofit co-ordinator. The fact is, however, is that we do not have anywhere near enough of them.

TrustMark data indicates that although more than 2,000 individuals have completed the retrofit co-ordinator qualification, just 612 are registered with the quality mark and only 230 are actively lodging work in the data warehouse. Of the 230 active co-ordinators, around 30% are lodging the majority of those projects. That means around 66 specialists are overseeing the vast majority of retrofit works. We clearly need more, and the Government need to worry about that skills shortage.

According to Ashden, the UK will need up to 50,000 retrofit co-ordinators in coming years if we are going to reach our goals for making homes energy efficient. In the meantime, what requirements are there for works to be properly overseen by a specialist? Do contractors have to employ one and risk cutting into their margins? Are there requirements for co-ordinators to actually visit a property, provide plans, speak with the owners and review works as they go? I wonder if the mysterious middle man I mentioned earlier was a retrofit co-ordinator—it is just not clear. What is clear is that none of these steps took place in that case.

Similarly, the short-term nature of the scheme means that we are not skilling up the workforce—the plasterers, electricians and plumbers—that we need to do these works. ECO4 is the longest iteration of the schemes and has been running for almost four years, but it is due to close next spring, and we still do not know what will replace it. Short schemes with short-notice changes do not allow businesses to invest in training or properly plan for the future. Even for the best-intentioned companies and tradespeople, that is not commercially viable. That was all underlined by evidence from across the sector in the recent Energy Security and Net Zero Committee report. The industry needs a 10-year plan so that it can invest in upskilling, take on apprenticeships knowing there will be work for them after their training, and be prepared to take on the challenge of making our homes future-proof.

Finally on ECO4, there desperately needs to be some clarity over how works are certified and payments are made. These are not just individual contractual disputes; the fact that Ofgem is administering the scheme tells a very different story. As I understand it, to get paid, an installer needs to register the works with TrustMark, providing photos, energy performance certificate ratings and so on. That is then validated before Ofgem releases the funds.

Considering the hundreds, if not thousands, of homes being damaged around the country, what precise validation is happening? Is money being released for those ruined homes? What requirements are there on traders not just to say, “Sure, we installed a heat pump,” but to actually prove they have put a home back to the way it was? Where else is the money going in the supply line of referrals that I talked about earlier? Who is getting paid, by whom and for what?

I have talked a lot about ECO4, but I want to touch briefly on the wider consumer protection landscape because, now that things have gone wrong, that is where my constituents and many others are battling. I do not think it is controversial to say that it is a bit of a mess. The Competition and Markets Authority confirmed that in its 2023 report on consumer protection in green heating and insulation sector. It was reiterated by Citizens Advice in its “Hitting a Wall” report last year, and again by the ESNZ Committee in its “Retrofitting homes for net zero” report in spring.

I am aware—as I am sure the Minister will reference—that the Government are currently considering responses to a consultation on requiring the microgeneration certification scheme to be the sole certification scheme for clean heat installations. Having seen constituents, and my caseworkers on their behalf, battle through a maze of different accreditation and oversight bodies to try to find someone to take responsibility for this work, a single body seems incredibly sensible, but I still have some questions.

How would that one body sit alongside TrustMark and Ofgem? Would it replace TrustMark and, if so, how would it be better equipped to accredit and oversee retrofit contractors? Would it solve the problem of traders being able to say they are accredited, and showing that they are accredited, when complaints have already started coming in? At the moment, it is far too easy for them to chop and change logos, or to continue to display a logo that they should not be able to. How do we make that new, single body sufficiently powerful and reactive so that it can be trusted by consumers?

Policy specialists recently suggested to me that local authorities could be trusted to keep a list of accredited local traders. I had to tell them that some already do. Indeed, in North East Fife, a contractor just told constituents that they were not displayed yet due to a delay in the application process. That is very believable, given how stretched local government is.

What happens to consumers when their homes are left ruined, with works poorly carried out, and the companies have lied about being certified or have now dissolved and vanished? What will happen to people stuck in the original system, whose works were carried out under the current failing scheme, who are being pushed from pillar to post with no end point in sight? Those are the experiences of my constituents and many others. To keep fighting for someone to be on their side is breaking them. Where is their solution?

Failures in consumer protection clearly go beyond the ECO4 scheme, but there are particular problems for consumers funded via ECO4. So many people, often vulnerable, are pushed into having work done, and the nature of the schemes increases the chances of being allocated an unskilled or rogue trader. Some of the people I have spoken to in the run-up to today have said that this is a scandal that no one takes responsibility for, and they are very concerned about speaking out about it. I hope that the Minister will address my concerns this morning.