The Bench Report

Warm Homes, Lower Bills: The UK’s Insulation Crisis and the £15 Billion Government Plan

• The Bench Report • Season 5 • Episode 10

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12 million households across the country are currently struggling with fuel poverty. UK homes are among the least energy efficient in Europe, losing heat up to three times faster than homes elsewhere. This poor housing quality drives up energy debt, which currently totals over £4 billion, and causes severe public health issues, contributing to an estimated 5,000 excess winter deaths among older people in 2022-23. We examine the Government's plan to combat this by committing £15 billion to the Warm Homes Plan, aiming to upgrade 5 million homes. We also discuss the need to fix the consumer protection failures seen in past schemes, like ECO4, where oversight was poor and faulty work was widespread.

Key Takeaways

  • Widespread Fuel Poverty: Approximately 12 million households in the UK are in fuel poverty, with almost 5 million spending over 20% of their income on energy.
  • Inefficient Housing: UK housing stock is highly inefficient; almost a quarter of properties with cavity walls still lack insulation.
  • Health and Financial Costs: Poor housing is linked to a public health emergency, and the cost to the NHS from non-decent conditions is estimated at £588 million per year in the North of England alone. Energy debt across millions of UK households exceeds £4 billion.
  • Government Ambition: The Warm Homes Plan has committed £15 billion to improve home energy efficiency, with a goal to upgrade 5 million homes by the end of the current Parliament.
  • Past Scheme Failures: Previous schemes, like ECO4, suffered from faulty workmanship; up to 98% of external wall insulation under that scheme was reportedly faulty. The government is now offering a free comprehensive on-site audit to households affected by faulty external wall insulation from ECO4 and other related schemes to ensure remediation.

Source: Home Insulation
Volume 776: debated on Wednesday 26 November 2025

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Amy:

Hello and welcome once more to the Bench Report, where we discuss recent debates from the benches of the UK Parliament, a new topic every episode. You're listening to Amy and Ivan. Today we're looking at a debate that, well, it affects almost everyone's wallet right now. It's home installation. And it's so directly tied to the cost of living crisis and those energy bills that keep landing on the doormat.

Ivan:

It really is. The scale of the problem is um just enormous. The figures mentioned in Parliament were that 12 million households are currently in fuel poverty.

Amy:

12 million. And within that, what, almost 5 million are spending over 20% of their income just on energy.

Ivan:

That's it. It's a huge portion of their money. And the debate really pinpointed the root cause, you know, it's structural.

Amy:

It's not just the price of gas, it's the houses themselves.

Ivan:

Exactly. The UK's housing stock is, well, some of the least efficient in Europe. Research from Imperial College London was cited, and it showed our homes lose heat up to three times faster than the European average.

Amy:

Three times faster. So you're literally just paying to heat the street.

Ivan:

In many cases, yes. And that inefficiency comes with a massive price tag. Across the UK, the total energy debt is now over four billion pounds.

Amy:

And it's not spread evenly, is it? The debate touched on a north-south divide.

Ivan:

It did. In the north of England, for example, 41% of homes were built before 1944. They are notoriously leaky, thermally speaking.

Amy:

And this goes beyond finances, doesn't it? There's a human cost.

Ivan:

A huge one. This is a public health emergency. The numbers are, frankly, chilling. It was estimated that cold homes contributed to about 5,000 excess winter deaths among older people in 2022-23.

Amy:

And that then puts a massive strain on our health service.

Ivan:

A very real quantifiable strain. Treating illnesses caused by these nondecent housing conditions costs the NHS an estimated 588 million pounds a year.

Amy:

So what's the government's response to all this?

Ivan:

Well, a new warm homes plan has been announced. It's a commitment of 15 billion pounds with an ambitious goal to upgrade 5 million homes.

Amy:

And a key part of that was getting rid of the old system, wasn't it?

Ivan:

It was. The announcement included scrapping what the debate repeatedly called the disastrous energy company obligation scheme.

Amy:

But it's not all just about top-down policy. There were some really inspiring local examples mentioned.

Ivan:

There were. Groups like Beat the Cold and Stoke on Trent are doing vital work on the ground. And the heritage work, too.

Amy:

Yes. Soltera Retrofit Reimagined. They're working on listed properties from the 1850s and 60s. It shows that even the most challenging homes can be improved.

Ivan:

It does. But, and this was the central explosive part of the debate. All this good work is being undermined by a complete collapse of trust.

Amy:

Because of the failures of that old scheme, the statistic that came out of the parliamentary hearing was just breathtaking.

Ivan:

98%. It's a systemic failure. And the consequences for homeowners have been devastating. Not only did the faulty work lead to damp and mold. So it made their homes worse. Exactly. But then the law firm, SSB Law, which was handling many of their compensation claims, collapsed. Oh no. And then the insurers for the construction companies turned around and actually countersued the individual homeowners for legal costs.

Amy:

So the victims were pursued for debts they didn't create. An incredible breakdown.

Ivan:

It is. So to try and restore some confidence, the minister has announced an immediate response.

Amy:

What's the plan?

Ivan:

Every single household that had external wall insulation installed under the ECO4 and Great British insulation schemes will be offered a comprehensive on-site audit.

Amy:

At no cost to the consumer.

Ivan:

Absolutely no cost. It's being framed as the gateway to remediation.

Amy:

But after a 98% failure rate, you have to ask if a voluntary audit is enough to restore public trust in government schemes like this.

Ivan:

Well, the immediate focus is on consumer protection, on getting that remediation. But the bigger challenge is the patchy quality control that allowed this to happen in the first place.

Amy:

And it leaves a fundamental question for you to consider. When government schemes fail on this kind of scale, where should the ultimate liability truly rest?

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