RHI scandal: Foster’s department was warned before whistle-blower

Posted By: December 31, 2016

Sam McBride. News Letter. Belfast. Saturday, December 31, 2016

Just seven months into the RHI scheme, Arlene Foster’s department was explicitly warned about the worst abuses – buildings being needlessly heated, with windows opened, to collect lucrative subsidies.

Crucially, the warning came before a whistle-blower personally contacting Mrs. Foster in late 2013 about how the supposedly environmentally friendly energy scheme was actually incentivising claimants to waste heat.

The revelation provides new evidence of just how much the Department of Enterprise, Trade, and Investment (DETI) knew at an early stage about the key flaws in the calamitous scheme.

Yet the “cash for ash” scheme – which Stormont’s Finance Department now says could cost public services in Northern Ireland as much as £600 million over the next 20 years – ran for three full years before any cost controls were introduced.

Today’s revelation is the latest about what is now an astonishingly long line of gaffes or warnings about RHI which were delivered either to DETI officials or to Mrs. Foster – personally over several years.

Sam McBride: In the absence of humility, First Minister’s position is increasingly precarious

Yesterday the First Minister faced renewed calls from the DUP’s Stormont coalition partner, Sinn Fein, for her to step aside temporarily, but the DUP defended Mrs. Foster’s actions, insisting that her department was “operating, at that time, under a serious misapprehension about the scheme.”

In a report for Mrs. Foster’s department by two consultancies, Cambridge Economic Policy Associates Ltd and Ricardo – AEA, about extending RHI both into new technologies and to domestic properties, the consultants raised one of the most flagrant abuses of the non-domestic RHI scheme.

The warning, on page 66 of a 131-page report commissioned by the Department, sets out several risks.

Among them are problems with metering which “broadly relate to the range of issues encountered by the non-domestic RHI to date.” Under the heading “useful heat,” it goes on to say: “With direct metering, properties may be heated to higher than best practice levels, windows opened, etc., if the tariff is tied to heat generated. In this case, the tariff could exceed operating costs.”

That section of the report gives the clear impression that the problems related to the non-domestic scheme in Northern Ireland.

But the department last night said that it could not have related to its scheme as elsewhere in the report the consultants state that no RHI projects had yet been accredited in Northern Ireland.

However, even if the warning relates to the non-domestic RHI scheme elsewhere in the UK, it still shows that the department was warned of a critical potential problem at an early stage.

Throughout the report, the consultants warned that the department could not afford the rates which would be necessary if it was to reach its target of securing 10% of renewable heat by 2020.

Most starkly, on page 59 of the report, the consultants said: “In short, if DETI is spending more than 4.2p/kWh, it is not going to be able to afford the 10% target with its assumed budget. In that regard, we note that many of the tariffs in this report are above 4.2p.

“It may be that this budgetary barrier can be overcome as technologies reduce in price over time. However, at present, the target looks extremely challenging from a budgetary perspective.”

On Wednesday, the News Letter asked the DUP whether Mrs. Foster or her special adviser, Andrew Crawford, had read the report. There had been no response to those questions by last night.

However, the DUP-run Department for the Economy did respond to separate questions put to it. In a statement, the department said: “It is clear that risks should have been managed more effectively. Page 66 of the consultant’s report was part of an annex which dealt with the assessment of heat output in the domestic sector.

“Although a risk associated with the use of metering encouraging an excessive generation of heat was identified, there was no suggestion by the consultants that this was happening in practice. Indeed, page 17 of the consultant’s report noted that ‘while Ofgem has received applications for non-domestic renewable heat technologies under Phase I of the NI RHI, no installation has received accreditation as yet.’”

Last night UUP leader Mike Nesbitt said: “Mrs. Foster’s reputation was built on credibility. Both are now in shreds. How can she look a pensioner suffering fuel poverty in the eye when we now know she ignored so many warnings that some people would open the windows to burn ash for cash?

“The vulnerable suffer while the RHI abusers stuff their wallets. The only honorable outlet is to resign.”