The committee highlighted failures in the design of household efficiency schemes and claimed that take-up of the Green Deal scheme was “woefully low” because it had not been adequately tested.

The forecast was “excessively optimistic” and “gave a completely misleading picture of the scheme’s prospects to parliament and other stakeholders,” it said in a report.

Th committee raised concerns about the £25 million of investment for the Green Deal finance company from taxpayers, as the Department for Energy and Climate Change (Decc) had “no formal role” in approving company expenditure. Decc spent a total of £240 million setting up and raising demand for loans under the Green Deal.

Is also found that the government lacked information it needed to measure progress and the impact of fuel poverty for the Energy Company Obligation (Eco) scheme. The scheme ran alongside Green Deal and required energy companies to provide households with energy efficiency measures such as loft insulation.

It has called on the government to ensure policy decisions are “thoroughly tested and based on accurate evidence”. The department must “be prepared to pull back on plans if it is clear they are unlikely to be successful and risk taxpayers’ money,” it said, adding that the Department “must not leave itself open to accusations of misleading parliament to achieve its own ends”.

PAC chair Meg Hillier said: “The government rushed into the Green Deal without proper consideration of concerns about its weaknesses. This blinkered approach resulted in a truly dismal take-up for Green Deal loans and a cost to taxpayers of £17,000 for every loan arranged. Savings in CO2 were minimal.”

The Green Deal and Eco schemes were implemented in 2013 to help improve household energy efficiency. The money available to Green Deal will not be renewed once it has run out, and the Eco scheme will enter a transitional year in 2017 before a new one is announced.