National Audit Office Report
Energy Efficiency Installations Under The Energy Company Obligation
Published by Department for Energy Security and Net Zero
On 14th October 2025 DESNZ published a report compiled by the NAO which presented damning figures for the solid wall insulation industry. In relation to their external wall insulation (EWI) audits the report concluded that:
- 92% had major issues requiring remediation because they will affect the insulation’s performance, often creating the risk of water ingress and mould
- 6% had major issues posing health and safety risks that require immediate correction, such as poor ventilation and electrical safety (these may also have other major issues)
- 1% had minor issues that may affect insulation performance over time
- 1% fully met the PAS 2035 standard
The results were not as bad for internal wall insulation (IWI) but still found that:
- 27% had major issues requiring remediation because they will affect the insulation’s performance, often creating the risk of condensation and mould
- 2% had major issues posing health and safety risks that require immediate correction, such as poor ventilation and electrical safety (these may also have other major issues)
- 35% had minor issues that may affect insulation performance over time
- 35% fully met the PAS 2035 standard
The report also went on to highlight suspected fraud and the system’s weaknesses and exposure to such fraud.
Insulation Is Not The Problem
As INCA argue and is generally acknowledged and accepted, the issues reported are NOT because insulation does not work. It is a failure in design and delivery of the scheme itself allowing rogue contractors to operate, the sub-contracting out of works in multiple layers and for it being far too easy to obtain the necessary accreditations to work within this funded market.
Of course INCA share and support Government focus on quality which is why we lead industry through the publication of best practice guidance and technical support and why we also lead on the design of the new EWI Competence Framework – currently at implementation stage. It’s also why the criteria for joining INCA, the recognised trade association for the external wall insulation industry, is far more stringent than that required for TrustMark accreditation, with proven experience and competence being at the forefront of our application process. It should be noted that, perhaps unsurprisingly, not a single INCA member installer was listed amongst the resulting Trustmark suspensions as a result of the report. We have suggested to Government and TrustMark that there may be lessons to be learned from this and our door is always open for constructive dialogue and collaboration for the betterment of the industry.
The Missing Data
Whilst the NAO report was comprehensive the actual data behind the reported numbers was clearly missing. This made it impossible for the industry to accurately respond to the finding and also to examine the clarity of current guidance. Because of this INCA have been pushing for additional information to be published in order that industry can gain better insight into the issues.
After submitting a Freedom of Information (FoI) request to DESNZ and subsequently Ofgem, the latter have now provided more information about the reported “Technical Non-Compliances” thereby giving greater insight into the 98% of homes that have had EWI installed and the 29% having IWI installed under ECO / GBIS which the Department for Energy Security & Net Zero (DESNZ) and Ofgem believe have major issues requiring remediation. We are grateful to both DESNZ and Ofgem for sharing this data.
External Wall Insulation (EWI) Non-Compliances
| Non-Compliance Description | Percentage |
| EWI – Thermal bridging risk present within installation | 10% |
| EWI – Pitched roof abutment does not meet the detail within the External Wall Insulation Specification For Weathering And Thermal Bridge Control Guide. | 8% |
| EWI – Weathering risk present | 7% |
| EWI – Below DPC detail does not meet the External Wall Insulation Specification For Weathering And Thermal Bridge Control Guide | 6% |
| EWI – Windowsills do not meet the details within the External Wall Insulation Specification For Weathering And Thermal Bridge Control Guide | 5% |
| EWI – Cables have not been sufficiently resecured to the property. | 5% |
| EWI – Exposed insulation present | 4% |
| EWI – Rainwater goods have not been sufficiently reinstated | 4% |
| EWI – Flat roof abutment does not meet the detail within the External Wall Insulation Specification For Weathering And Thermal Bridge Control Guide. | 4% |
| EWI – Competency of the roofer who completed the roofline extension has not been uploaded within the lodgement | 4% |
| EWI – Weathering issues on roofline junction | 4% |
| EWI – Gas pipework does not meet the details and guidance within the accepted industry best practice guides referenced within PAS Annex B.4 | 3% |
| EWI – Missing gas engineer competency | 3% |
| EWI – Vents have not been extended out in line with the EWI system | 3% |
| EWI – Cables do not meet the detail within the External Wall Insulation Specification For Weathering And Thermal Bridge Control Guide | 3% |
| EWI – 100% of the solid external walls have not been insulated | 3% |
| EWI – Insufficiently reinstated service | 3% |
| EWI – Soil stacks and/or waste pipework have not been sufficiently reinstated | 3% |
| EWI – Undercuts not present on all internal doors | 3% |
| EWI – Other, please see caption | 3% |
| EWI – Insufficient Roofline Overhang | 3% |
| EWI – Meter Box does not meet the details set out within the External Wall Insulation Specification For Weathering and Thermal Bridge Control Guide | 2% |
| EWI – Background Ventilation not present in all habitable rooms | 2% |
| EWI – Metal or plastic trims/capping’s have been installed | 2% |
| EWI – extract ventilation not present/functioning within bathroom(s) | 1% |
| EWI – extract ventilation not present/functioning within kitchen | 1% |
| EWI – CAT 1 Non Compliance, please see caption | 1% |
| EWI – A valid guarantee has not been lodged for the installed Roofline Closure System. | 1% |
| CAT 1 Non-Compliance – Insufficient combustion ventilation | 0% |
| EWI – Roofline Closure system is not sufficiently weatherproofed | 0% |
| EWI – Newly installed soil pipe(s) have not been installed in line with Approved Doc H | 0% |
| Non-Compliant – No photographic evidence to show the roofline has been extended. This should be a Minimum 40mm. | 0% |
| Non-Compliant – As area(s) show thermal bridging. Please Provide Picture Evidence. | 0% |
| Grand Total | 100% |
INCA Response
Whilst the additional information is appreciated it still doesn’t answer all the questions the industry has. Of course there are things that should simply never happen … exposed insulation and the non-reinstatement of rainwater goods and services for example, apart from being best practice it’s common sense and not acceptable under any circumstances. Equally however some 7% of reported issues relate to the ventilation strategy and 10% to other trades (roofers, gas engineers etc) – surely these kind of non-compliances fall under the responsibility of the retrofit designer / coordinator and not the EWI installer.
INCA also call for greater clarity in respect of the high level of non-compliance (10%) due to a risk of thermal bridging and weathering risk present (7%). The word “risk” does not define the actual issue … could this therefore mean more of a snagging, maintenance, admin or evidence related non-compliance rather than system installation? We would certainly benefit from further clarity to identify any action we need to take.
The Weathering And Thermal Bridge Control Guide is referenced a number of times – although this is an industry rather than an INCA document we will request that it be reviewed and look at steps that INCA can take to ensure the guidance is clear and obvious. It should be noted that this guidance was updated in August 2024 and therefore any projects completed prior to this date should have been audited against the previous version.
There’s also a need to ensure that installed systems are maintained regularly and properly. INCA have published an industry Maintenance Guide for this purpose.
All technical guidance can be downloaded for free from the INCA Knowledge Hub
The Case For EWI
As stated earlier, it is generally acknowledged and widely accepted, the issues reported are NOT because insulation does not work. It is a failure in design and delivery of the scheme itself allowing rogue contractors to operate, the sub-contracting out works in multiple layers and for it being far to easy to obtain the necessary accreditations to work in this funded market.
Retrofitting Britain’s housing stock is a climate change imperative and a public health emergency. Making homes more energy efficient and therefore cheaper to heat is better for both the resident and the environment and will save billions of pounds in heating, health and welfare payments and pursuing carbon reduction alongside energy efficiency will tackle fuel poverty and climate change simultaneously.
There are still in the region of 7.6 million uninsulated solid wall properties and addressing these on a fabric first basis should be prioritised. Insulate before installing a heat pump, solar panels and batteries because, in the words of industry expert Colin King, “the most affordable, clean and dependable energy is the energy you never have to use”.
Download a copy of the INCA Fabric First Report >>>
Download a copy of the INCA Benefits Of EWI Report >>>
Internal Wall Insulation (IWI) Non-Compliances
Whilst the sole purpose of INCA is to support the external wall insulation (EWI) industry we wanted to also share the data shared by Ofgem in relation to internal wall insulation (IWI) installs under ECO and GBIS as also reported in the NAO report and provided to INCA:
| Non-Compliance Description | Percentage |
| Non-Compliance – Thermal Bridging Concern caused by installation of IWI | 20% |
| Non-Compliance – Other, Please see notes section on report | 14% |
| Non-Compliance – Background Ventilation not present in all habitable rooms | 12% |
| Non-Compliance – CMEV not present in all wet rooms | 11% |
| Non-Compliance – Non-wet room walls (Solid Wall Construction) uninsulated | 10% |
| Non-Compliance – Penetrations through insulation not sealed | 9% |
| Non-Compliance – Services not reinstalled correctly | 7% |
| Non-Compliance – insufficient or no heating in wet room | 5% |
| Non-Compliance – Insufficient undercuts present on internal door(s) | 5% |
| Non-Compliance – Extract Ventilation not present in all wet rooms | 4% |
| CAT 1 Non-Compliance – Insufficient combustion ventilation | 1% |
| CAT 1 Non Compliance – Other, Please see notes section on report | 0% |
| Non-Compliant – No evidence to show the wetrooms have been insulated, therefore we require evidence to show continuous MEV is in place. | 0% |
| Non-Compliant – Missing Post Install Photographic Evidence of key parts of the installation including close ups of thermally sensitive areas for the IWI ie window reveals, internal cupboard space etc. | 0% |
| Non-Compliant – Concern of Thermal Bridging. | 0% |
| Non-Compliant – PIBI is missing for the IWI measure. | 0% |
| Non-Compliant – Missing Mid Install Photographic Evidence of key parts of the installation including close ups of thermally sensitive areas for the IWI ie window reveals, internal cupboard space etc. | 0% |
| Grand Total | 100% |
Comment
This follows a similar pattern with many of the reported non-compliances relating to retrofit coordination / design rather than the installation of the actual system itself with issues relating to ventilation strategy making up some 38% of reported non-compliances.
It is right, however, that we share this data for the sector to respond directly.
Contact Details:
Email: info@inca-ltd.org.uk
LinkedIn: https://www.linkedin.com/company/inca/
Telephone: 0330 124 6585
About INCA
- INCA is the recognised trade association for the External Wall Insulation (EWI) industry in the UK representing system designers, specialist installers and key component suppliers
- INCA has proven longevity as a trade body dating back 40 years. Current membership is 93, please refer to the INCA website for a current breakdown of our membership types: contractors, manufacturers, and associates
- INCA’s vision: The delivery of growth in sustainable fabric performance solutions as the primary focus in combating fuel poverty and protecting the environment
- INCA’s mission: To represent members of the External Wall Insulation industry through technical excellence, education, effective collaboration, strong marketing, communications, and member benefits.