Energy Systems Catapult published a report on 8 July 2025 finding that the Energy Company Obligation scheme, known as ECO4, is not reaching health-vulnerable people living in cold homes. The report, Making ECO Work for Health: Bridging the Gap Between Policy Intent and Delivery Reality, is based on a service trial run by the Catapult with ScottishPower, which tested whether ECO4 could fund retrofits for people whose health conditions are made worse by living in a cold home, using the Catapult's Warm Home Prescription model1.
The trial found that just four out of 42 surveyed homes, or 9.5%, qualified for a fully funded ECO4 retrofit, which the report attributes to misaligned funding rules and the whole-house approach. The average contribution required from residents was £17,850, described in the report as unaffordable for most vulnerable households1.
The report states that although ECO4 includes health-related eligibility routes on paper, delivery excludes many eligible residents because of cost caps, administrative burden and a delivery model driven by commercial installer priorities. It also cites unlinked or decentralised datasets, which it says make targeting eligible homes difficult for public sector bodies and lead to installer-led, profit-driven lead generation, and says complex rules and admin-heavy procedures limit health-centred delivery models1.
"This trial exposed a significant gap between the policy goals of ECO4 and its operational reality. The scheme is failing to support those most at risk from cold homes, not because the need isn't there, but because the structure of the programme makes it virtually inaccessible to them."
The report sets out seven policy reforms. These are: targeting interventions using local health and housing data, with NHS bodies and local authorities identifying and prioritising homes; linking health, housing and welfare datasets; broadening the criteria for fully funded jobs so more homes qualify without resident contributions; funding independent advice and wraparound support within ECO delivery; running ECO schemes over longer periods to build supply chain stability; moving from cost-savings modelling to outcome-based metrics covering health and social outcomes; and aligning retrofit policy with health, housing and care strategies1.
| Reform area | Recommendation as published |
|---|---|
| Targeting | Local targeting by NHS and local authorities, rather than installer-led targeting |
| Data | Integrated health, housing and benefits data |
| Funding rules | Broader criteria for fully funded jobs |
| Support | Independent advice throughout the retrofit journey |
| Duration | Longer-term ECO schemes for supply chain stability |
| Metrics | A people-first approach focused on lived outcomes |
| Policy | A joined-up health, housing and energy policy framework |
Why it matters for households
ECO4 is one of the main routes by which a low-income or health-vulnerable household can have insulation or heating measures installed at little or no cost, so whether it reaches those households determines whether a cold home gets improved or stays cold. The trial indicates that for the homes it worked with, the scheme's funding rules and whole-house approach meant most did not qualify for fully funded work, and that where a contribution was required it averaged £17,850. For a household on a low income or with a health condition worsened by cold, that figure is the practical barrier between eligibility on paper and an installed measure.
The findings also bear on how households are identified in the first place. The report says targeting is currently installer-led rather than led by local health and housing data, which affects which homes are approached and on what basis. The grants and schemes landscape in the UK is devolved, with separate provision in Scotland and Wales, and the report's recommendations on data linking and local targeting would sit alongside those existing routes. The report does not set out how its proposed reforms would interact with devolved schemes, and no such detail has been reported.
What happens next
The report's seven reforms are recommendations to government; no timetable, consultation or implementation date is given in either the news announcement or the report page. The report itself, Making ECO work for health: Bridging the gap between policy intent and delivery reality, is available from Energy Systems Catapult, which asks for contact details before download or accepts requests by email1. No response from the Department for Energy Security and Net Zero, which sets energy policy for Great Britain, has been reported.
Sources2 cited
- ECO4 scheme failing health-vulnerable households - Energy Systems Catapult, es.catapult.org.uk
- Making ECO work for health - Energy Systems Catapult, es.catapult.org.uk