A Government-backed home insulation programme has been labelled an ‘abject failure’ by the Public Accounts Committee (PAC), which warns thousands of households may still face huge repair costs for dangerous defects.

More than 30,000 homes are thought to be affected after external and internal wall insulation installed under energy efficiency schemes was found to be widely faulty.

Previous audit findings showed 98% of external wall insulation and 29% of internal installations inspected had serious defects, some posing immediate health and safety risks including damp, mould and poor ventilation.

Ministers have said residents should not have to pay for fixes, but the PAC says current protections are unreliable. Liability rests with original installers, with guarantees typically capped at £20,000 — far below some repair bills, which have exceeded £250,000.

The committee also raised major concerns about fraud, recommending the case be referred to the Serious Fraud Office, and urged the Government to rapidly scale up efforts to identify and repair unsafe homes.

The PAC said that the recent announcement of the Warm Homes Plan is likely to lead to scaling up of other energy efficiency installations such as solar panels. It added that it is ‘vital that this is accompanied by a proper oversight of quality, that was so lacking here.’

PAC chair Sir Geoffrey Clifton-Brown said: ‘I have served on the Public Accounts Committee for twelve years. In all that time, a 98% failure rate in a public sector initiative amounts to the most catastrophic fiasco that I have seen on this Committee.’

He continued: ‘Potentially thousands of people are now living with health and safety risks in their homes, and despite Government’s protestations we have nowhere near enough assurance that they are not financially exposed to unaffordable bills to repair the defective works. All involved in the system must now move at far greater pace to make good.’

The Department for Energy Security and Net Zero has been contacted for comment.