The RHI scheme was a ‘project too far’ for the Northern Ireland Government, says Inquiry

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FINDINGS of the public inquiry into the green-energy scheme that led to the collapse of government in Northern Ireland in 2017 were published today.

Sir Patrick Coghlin, who chaired the 114-day public inquiry into the Renewable Heat Incentive Scheme, shared the conclusions the independent panel had drawn.

In his public statement Sir Coghlin illustrated that the failure of the scheme was not the result of corruption or malice.

“Corrupt or malicious activity on the part of officials, Ministers or Special Advisers was not the cause of what went wrong with the NI Renewable Heat Incentive scheme (albeit the Inquiry has identified some instances where behaviour was unacceptable).

“Rather, the vast majority of what went wrong was due to an accumulation and compounding of errors and omissions over time and a failure of attention, on the part of all those involved in their differing roles, to identify the existence, significance or implications of those errors and omissions.”

The Renewable Heat Incentive scheme’s purpose was to provide a financial incentive for businesses to move away from non-renewable sources of energy.

The Northern Ireland scheme, which has similarities to a scheme in Great Britain, was devised and implemented by the then Department of Enterprise, Trade and Investment (now the Department for the Economy) in 2012.

However, the scheme threatened to overspend by millions of pounds as the flaws in its design meant it cost more than originally intended, with fears that the overspend could have reached as much as £700m over 20 years.

The report said the responsibility for the botched scheme should be shared among a broad range of persons and organisations involved.

Sir Coghlin stated: “The non-domestic NI Renewable Heat Incentive scheme was a ‘project too far’ for the Northern Ireland Government.

“While motivated by the laudable aim of encouraging the use of renewables rather than fossil fuels in heat production, the Northern Ireland stand-alone scheme should never have been adopted.

“The NI Renewable Heat Incentive scheme was novel, technically complex and potentially volatile, especially because of its demand-led nature and the wide range of variables (such as fluctuating fuel costs) which could affect its operation.

“These features together made the scheme highly risky, yet the risks were not sufficiently understood by all those who should have understood them within the Northern Ireland Government, either at the outset or at any time during the life of the scheme.

“Without the necessary resources and capability, Department of Enterprise, Trade and Investment should never have embarked on such a novel and complicated, demand-led scheme.”

The public inquiry into the Scheme was opened in January 2017 by the Northern Ireland Minister of Finance.

The inquiry had 63 witnesses gave oral evidence, 1.2m pages of evidence were gathered and 17,000 pages of transcript material were produced.

Official figures show 1,170 sites with 2,128 boilers were on the non-domestic scheme.

Agricultural food was heavily represented, with 1,114 boilers of which 800 were in poultry sheds.

A statement from Minister Diane Dodds following the publication of the report said: “I would like to thank Sir Patrick Coghlin and his team for their work in producing a thorough and comprehensive report.

“Along with others across government and the wider NICS, I will now consider its findings and recommendations in detail.

“It is very important that we acknowledge the findings in the report, and having learned the lessons from Renewable Heating Initiative, now move forward.

“Today must be about ending the disruption of the past so we are better equipped to face the challenges which lie ahead.

“The department, which is the successor to the Department of Enterprise, Trade and Investment, has long accepted its part in this failure.

“Over three years ago, it began the task of fixing what was clearly broken.  It set up the RHI Taskforce which has worked diligently to bring the scheme back into line – with policy, with budget and with proper governance.

“The long-term future of the scheme is currently being considered and our focus remains firmly on delivering an effective and sustainable energy strategy.

“Also, we can never lose sight of the fact that we must be fair to those who joined the scheme in good faith while, at the same time, remaining fair to the taxpayer.

“Of equal if not more importance, Renewable Heating Initiative’s failure identified the significant gaps in the department’s corporate governance and assurance system which left the scheme open to abuse.

“I am reassured that these gaps have been addressed.

“Leadership, direction and experience at senior levels across the department have been significantly strengthened.

“The recruitment of industry and commercial expertise augmented by key appointments with expertise in corporate governance and business management have helped to improve the quality, transparency and accountability of strategic and operational decision making.

“More specifically, a dedicated directorate – tasked with maintaining high standards in corporate governance – has been created. It now plays an essential policing role in how the department enters into and manages commercial relationships – including grant schemes – and in overseeing how it administers projects and programmes.

“The department has strengthened its system of internal control and assurance.

“It has significantly improved its processes around business planning and performance measurement and reporting, resource and people management, risk management, whistleblowing disclosures, casework reviewing and oversight.

“It has also reorganised its organisational management structure to better align with its policy focus while at the same time strengthening operational day to day effectiveness.

“A new, well-resourced Energy Group as well as a new strong corporate centre are now in place and operating well.

“These improvements reflect my commitment to high standards of transparency and accountability. We want to secure and maintain public confidence. And to do this, we will be better.

“Today’s report, while detailing the significant failures of the past, also provides recommendations to help us move forward.

“I remain committed to do what I can to ensure those lessons are learned. We will now consider the report in full.”

The entire Chairman’s Statement regarding the Renewable Heat Incentive Scheme Inquiry can be read here