SFO arrests four in dawn raid over £44m government insulation scheme fraud

Four people have been arrested during a dawn raid on suspicion of conspiracy to defraud following an investigation into the government's botched home insulation scheme. In the early hours of Wednesday morning, 100 investigators entered homes and offices across three counties and removed computers, hard drives and crypto assets. The Serious Fraud Office (SFO) is examining what it said is a "sophisticated conspiracy" to fraudulently claim £44m in public money through the scheme. The BBC has, for years, reported on the poor quality of insulation work carried out under the government programme, which has led to damp and mould and put some people's health at risk. The BBC joined a team from the SFO as they put on stab vests and raided a company office at a business park in Cannock. Lead investigator Ross Corrigan said the SFO suspected this was a "sophisticated and systemic fraud within the government's Energy Company Obligation 4 (ECO4) scheme which was designed to help people in fuel poverty". "And yet here we have suspected criminality which might have exploited that good cause," he said. The ECO4 programme began in 2022 and involved the installation of heat pumps, solar panels and insulation in more than 300,000 homes. It was targeted at elderly or vulnerable people living on low incomes. The scheme, which has since closed, was funded through a levy on household energy bills and has cost £4bn. The SFO said that three companies were involved in the fraud: JJ Crump of Sheffield, South Coast Insulation Services in Fareham and Cannock-based Warmfront. South Coast Insulation Services went into administration in February. The SFO alleged the three businesses claimed money for insulation work on 5,000 properties they never installed. The BBC has contacted the firms for comment. The SFO said it wants installers and assessors who worked on these contracts to contact them at [email protected]. Sir Geoffrey Clifton-Brown MP, chair of the Public Accounts Committee, said the SFO investigation showed that the ECO4 scheme was looking increasingly like a "charlatan's charter". He said the "sheer amount of money" that may have been fraudulently claimed, estimated at £44m, "serves only to underline further that the known levels of fraud in the scheme, as our committee warned earlier in the year, must be being significantly underestimated". Almost all of the external wall insulations delivered under the scheme – 98% – required repairs, according to the a report by the National Audit Office. The BBC has spoken to homeowners across the UK over many years who said their properties have been ruined by poorly installed insulation under ECO4. In one case in Luton, the dry rot was so extensive that the house has been gutted and is costing more than £250,000 to fix. The repairs are being paid for by the installer's insurer. The government said it is implementing a find-and-fix programme to help homeowners and said more than 3,000 out of 30,000 affected homes have been repaired. Energy minister Martin McCluskey said: "It is appalling that people have allegedly tried to line their own pockets with funding intended to help families lower their energy bills and live in a warm, comfortable home."