Its classic government incompetence, mixed with criminal lobbying.
It starts off ok. "We must do something about fuel poverty"
So they do some sums about the number of people on low incomes and the cost of fuel, and someone (probably a 23yr old political science graduate) comes up with a figure.
Then there is some horse trading between departments and the treasury, and any other source of finance that they pressurised (like quasi-monopolistic energy suppliers). Eventually, they find some money. Since the government has no money of their own, the money must either come from tax payers, or from utility bill payers.
The politician gets his soundbite as they announce the programme.
The actual implementation of the programme is either a) run by a middle ranking career civil servant, who has no expertise in the industry OR outsourced to some QUANGO which has too many industry contacts for its own good.
There is then a process of "consultation" where the companies that are large enough to be able to afford lobbyists, tell the people running the scheme how the nuts and bolts should work. Since the civil servant neither knows nor cares about the industry, he takes the line of least resistance. If its a QUANGO, then its board is already made up of directors of those large firms, or people who next year will leave the QUANGO to take up lucrative directorships or consultancies, so either way the big companies get their own way.
Stuff the fact that the process no longer helps the people it was intended to help. That story will never make it onto Newsnight.
The core problem is that most people in fuel poverty don't control their appliances and insulation, since they are in rented property. The landlord doesnt give a toss because he isn't paying the utility bill, and the tenant isn't going to upgrade a boiler which will benefit the landlord in the long run.
A better solution would be to introduce a variable rate of tax on income from rented housing, with tax surcharges for properties which have bad EPC ratings, and lower rates for properties with good EPC ratings.
That rewards the good landlord making sensible investments, and punishes the slum landlord.