Four Arrested in Home Insulation Fraud as Construction Sector Data Shows 116,943 Building Development Companies

Four people have been arrested during dawn raids on suspicion of conspiracy to defraud following an investigation into the government's home insulation scheme, according to BBC Business^[1]. The arrests, carried out on Wednesday morning, involved 100 investigators entering homes and offices across three counties, removing computers, hard drives and crypto assets^[1].

Scale of Alleged Fraud in Government Scheme

The Serious Fraud Office (SFO) is examining what it described as a "sophisticated conspiracy" to fraudulently claim £44m in public money through the Energy Company Obligation 4 (ECO4) scheme^[1]. The ECO4 programme began in 2022 and involved the installation of heat pumps, solar panels and insulation in more than 300,000 homes^[1]. The scheme, which has since closed, was funded through a levy on household energy bills and has cost £4bn^[1].

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"^[1]. The SFO alleged that three businesses - JJ Crump of Sheffield, South Coast Insulation Services in Fareham and Cannock-based Warmfront - claimed money for insulation work on 5,000 properties they never installed^[1].

Construction and Building Sector Company Numbers

The UK construction and building sector represents a significant portion of the business landscape. According to CompanyPulse company register^[2] data, there are currently 116,943 companies registered under "Development of building projects" (SIC code 41100) and 100,871 companies in "Construction of domestic buildings" (SIC code 41202)^[2]. These figures represent point-in-time counts from the UK company register.

The broader business services sectors that often support construction and energy projects show even larger numbers, with 275,924 companies in "Management consultancy activities other than financial management" and 226,462 in "Other business support service activities"^[2].

Recent Company Formation Activity

Company formation data from recent weeks shows consistent activity in the UK business sector. On 24 April 2026, there were 2,679 new company incorporations^[2], following 2,586 incorporations on 23 April 2026^[2]. The highest single-day incorporation figure in the data was 3,742 companies on 30 March 2026^[2].

Over the past seven days, the UK has seen 15,400 new company incorporations^[2], contributing to a total of 5,733,930 companies on the register, of which 5,527,502 are currently active^[2].

Companies Involved and Response

South Coast Insulation Services, one of the three companies named by the SFO, went into administration in February^[1]. JJ Crump issued a statement saying it "completely refutes the allegations" made by the Serious Fraud Office, adding that no-one from the company had been arrested and that "we are fully co-operating with the SFO investigation. All the work we installed has been carried out in good faith."^[1]

The ECO4 scheme was targeted at elderly or vulnerable people living on low incomes^[1]. The BBC has reported for years 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^[1].

Insolvency Context in the UK Business Landscape

The UK business environment includes various forms of insolvency proceedings. Current data shows 109,621 companies in liquidation, 12,284 in administration, 5,556 in voluntary arrangement, and 403 in receivership^[2]. These figures provide context for understanding the broader business risks across sectors.

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"^[1]. He said the "sheer amount of money" that may have been fraudulently claimed, estimated at £44m, "serves only to underline further" concerns about the scheme^[1].

The SFO has asked installers and assessors who worked on these contracts to contact them at confidential@sfo.go.uk^[1]. The investigation continues as authorities work to determine the full extent of the alleged fraud in what was intended as a programme to help vulnerable households reduce their energy costs.