“Cash for ash” is just a symptom, the real problem is a misplaced sense of our own entitlement

Posted By: December 27, 2016

Cavalier attitude to our tax money is ingrained, says Owen Polley

Owen Polley. Belfast Telegraph.Monday, December 26, 2016

Arlene Foster’s future as Northern Ireland’s First Minister has been plunged into doubt by the Renewable Heat Incentive (RHI) scandal at Stormont. The extent of her culpability has yet to be established clearly, but she was Enterprise, Trade and Investment Minister in 2012 when her department introduced a scheme that may eventually overspend by £400m, or even, the Ulster Unionists suggest, cost the Executive £660m  in funding from the Treasury.

Understandably, in the wake of the BBC’s explosive interviews with Mrs. Foster and her successor at DETI, Jonathan Bell, attention focused on how much the First Minister knew about RHI’s flaws. However, the controversy illuminates a culture of entitlement to taxpayers’ money that pervades government in Northern Ireland and extends far deeper than the DUP, or the Executive Office.

RHI’s failure hinged on an absence of basic cost controls; that would have prevented people from profiting by burning extra fuel. Curiously, though, the rest of the scheme was copied more or less directly from legislation in Great Britain that did include these vital constraints.

A number of explanations for that omission have been suggested, ranging from the low uptake of RHI in the rest of the UK to the prevalence of oil rather than gas boilers in Northern Ireland. These factors may not have been as influential as the fact that, when the scheme was introduced, officials and politicians at Stormont thought – wrongly – that its costs would be paid for by the UK Government, rather than coming from Northern Ireland’s block grant.

The RHI’s original “regulatory impact assessment” – which Mrs. Foster signed – envisaged a scheme delivered within a budget agreed by the Treasury, up to 2015. After that, it said, “additional funding will need to be negotiated” with Westminster.

Perhaps the key question around the heating scandal is not whether ministerial incompetence caused a foreseeable overspend, but whether politicians or civil servants, were relaxed about the scheme encouraging possible profiteering, so long as they thought London would pick up the bill. At an Assembly committee meeting back in February, a DETI official described potential RHI funding from the Treasury as “what you might say was free money.”

Of course, his statement was quite wrong, because UK taxpayers, including taxpayers in Northern Ireland, were paying for the scheme, but it revealed an attitude to public spending at Stormont that seems all too common. Politics here is excessively focused on maximizing the amount of cash transferred from London to Belfast and then, usually, wrangling about how it will be divided between the two main perceived communities here.

The RHI scheme certainly threatens to blow colossal amounts of money, but you could argue that the overall sums are almost insignificant compared to some of the ongoing waste that’s taken for granted in Northern Ireland.

The £400m ‘cash for ash’ overspend is calculated over 20 years, which would average out at £20m per year. That’s not small change, but it’s dwarfed by the £833m that Ulster University estimates we spend annually on maintaining a divided society, with segregated schools, housing, and other public services. The accountancy giant Deloitte puts that figure at closer to £1.5 billion each year.

Welfare reform caused particular political controversy in Northern Ireland because benefits are commonly viewed not as a way of supporting people in difficulties, but rather as a vital stimulus to our economy. Westminster pays for welfare, so, until the Government started to levy punishing fines to reflect our more expensive system, politicians here often seemed to encourage dependency, instead of tackling its causes. In other words, they viewed the ballooning bill for benefits as “free money.”

As a result of this mentality, the cost of Disability Living Allowance (DLA) in Northern Ireland, which was already by far the highest in the UK, has risen by 25% in the last five years, topping £1 billion for 2015/16, and social security payments are approaching £6 billion. That’s before the incalculable social, and economic costs of parking people on welfare are taken into account. More people of working age in Northern Ireland are “economically inactive” than in the rest of the UK. Another table we regularly top is the record of MPs’ expenses at Westminster. The DUP’s Jim Shannon and Ian Paisley are particularly high spenders, but Sinn Fein’s policy of abstaining from the House of Commons doesn’t prevent its representatives from claiming hundreds of thousands of pounds of public money, too. Critics have challenged the propriety of expenses claimed by Northern Irish politicians at Westminster and Stormont on a number of occasions.

Sometimes, it’s suggested that the parties find clever ways to divert the money they claim, to fund political activities or community organizations. In 2014, the BBC’s Spotlight program revealed that Sinn Fein was paying rent for its offices to three “cultural societies.” Sir Alistair Graham, the former chairman of a Westminster standards watchdog, said he feared that the payments were “a way of channeling public money to political parties.”

Questions were raised previously about rent payments, substantially above the market rate, paid by the DUP to a company that owned its Ballymena Advice Centre, whose sole director was also one of the party’s local councilors.

No wrongdoing was proven in those cases, and it’s unlikely that the heating scheme will prove to involve legal wrongdoing, either.

It would be misleading to view the RHI episode in isolation, though. It’s certainly not the first scandal to plunge Stormont into controversy and, arguably, it’s not even the most serious. After all, just one year ago, the crisis filling column inches around Christmas was prompted by a murder linked to the IRA.

The heating debacle is a symptom of Stormont’s broader attitude to public money, particularly when it comes directly from Westminster. A public inquiry, or resignations, may help to hold someone accountable, but they won’t make the larger problem disappear. Our entire devolved system of government will remain rooted in an addiction to spending as many taxpayers’ money as our politicians can reasonably winkle out of the Treasury at Westminster.

While the focus of Northern Ireland politics remains on maximizing public spending, rather than generating cash for the economy locally through enterprise and combating segregation in our society, bad government will continue, with the likelihood of more controversies and more overspend to come.

That attitude is not exclusive to the DUP, though it may be more surprising when unionists are cavalier about UK taxpayers’ money.

It is an attitude ingrained – to a greater, or lesser, extent – in all the political parties at Stormont.