Britain's fraud squad has been called upon to investigate a £4.6billion net zero scheme, described as "catastrophic," which is believed to have compromised the safety of thousands of homes.
MPs have criticised the Government's poorly executed insulation scheme, which resulted in over 30,000 properties with defects.
The Commons Public Accounts Committee (PAC) has called the home retrofit scheme the "most catastrophic fiasco" and suggests that fraud likely played a significant part.
PAC warned that some of the defects pose an "immediate health and safety risk", calling upon the Government to refer the matter to the Serious Fraud Office (SFO).
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MPs on the committee also criticised Ed Miliband's Department for Energy Security and Net Zero (DESNZ).
They found fault with senior officials taking two years to realise the scale of the problem.
Over £4.6billion is estimated to have been spent under two household energy-saving schemes: the Energy Company Obligation (ECO) scheme and the Great British Insulation scheme.
Energy suppliers bear the costs, which are then passed onto consumers through higher bills.
MPs on the committee criticised Ed Miliband's Department
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Despite these significant expenses, the schemes have been hindered by subpar installation.
The ECO programme, designed to enhance energy efficiency and reduce costs, ended up leaving 32,000 to 35,000 homes with poor insulation.
In certain instances, this led to structural problems, dampness, and mould.
MPs warned that fraud likely contributed substantially to the low quality of insulation work.
Ofgem, the energy regulator, reported a fraud rate of 1.75 per cent
| GETTYOfgem, the energy regulator, reported a fraud rate of 1.75 per cent, amounting to over £80million.
However, MPs argued this estimate probably significantly underrepresents the true extent of fraud.
Sir Geoffrey Clifton-Brown, the PAC chairman, called ECO's failure "the most catastrophic fiasco" that he had seen in his 12 years on the committee.
He said: "Potentially thousands of people are now living with health and safety risks in their homes and despite the Government's protestations, we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works."
Sir Geoffrey Clifton-Brown, the PAC chairman, called ECO's failure 'the most catastrophic fiasco'
| WIKICOMMONSMinisters have stated that no household should bear the cost to fix the problems, as the original installer is responsible for covering repair costs of up to £20,000 through the guarantee.
However, the PAC report warned that households have no guaranteed assurance that repair costs exceeding this cap will be covered.
The cross-bench group expressed scepticism that the original installers and guarantee providers could handle the potential volume of claims, citing instances with damages exceeding £250,000.
Minister for energy consumers Martin McCluskey said: "Every household with external wall insulation installed under these two schemes are being audited, at no cost to the consumer."
A DESNZ spokesman said: "It is categorically untrue there are widespread health and safety risks - for the vast majority, this means a home may not be as energy efficient as it should be."
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