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Civil servant in charge of energy scheme at loss to explain why no review

By Lesley-Anne McKeown

Published 01/12/2016

Parliament Buildings at Stormont. More than £1 billion of public money will be paid by 2036 to Northern Ireland-based businesses which signed up to the renewable energy scheme
Parliament Buildings at Stormont. More than £1 billion of public money will be paid by 2036 to Northern Ireland-based businesses which signed up to the renewable energy scheme

A senior civil servant charged with overseeing a controversial renewable energy scheme is unable to explain why it was never reviewed.

The Renewable Heat Incentive (RHI) aimed to cut the cost of green energy to encourage people off fossil fuels but ended up landing ministers with an overspend of hundreds of millions of pounds.

David Sterling, permanent secretary and accounting officer for the Department of Finance, said the botched initiative had not been high on his radar but accepted mistakes were on his watch.

He said: "With hindsight, I may have got my priorities wrong."

The RHI encouraged the installation of costly eco-friendly heating systems by paying a tariff per kilowatt of heat burned over a 20-year period.

However, unlike in the rest of the UK, in Northern Ireland no cap or payment tier system was placed on the money that could be claimed in proportion to the size of boiler and the hours it was operated.

That effectively enabled a business to burn unnecessary heat 24/7 just to make money.

Thousands signed up to the scheme - a deluge that ultimately forced its closure, but not before Stormont had been left exposed to a huge overspend.

Overall, more than £1 billion of public money will be paid by 2036 to Northern Ireland-based businesses which signed up to the scheme.

Last week economists claimed the failure to regularly review tariffs was the main reason for the scheme's budget-busting demise.

Mr Sterling, who left the department in July 2014, said: "I accept that a review did not take place in my time. I accept that in the business case it was said a review would take place in early 2014.

"I can't satisfactorily explain why the review didn't take place.

"Questions around that are being addressed in the fact-finding review."

During a grilling from MLAs on the Public Accounts Committee at Stormont, Mr Sterling said, at the time, he felt he had fulfilled an obligation to put in place sound internal control and governance mechanisms but with hindsight conceded he should have been more alert to the need for a review.

"It is now clear that the control system may have looked good but the application for the control system was deficient, otherwise how would you explain what has happened," he said.

"The initial tariff design would have mitigated some of the problems we faced had it had tiering introduce at the start but significantly that the review didn't take place and the other significant factor is that warning signs which were flagged up by (government regulator) Ofgem and by the whistleblower were not taken account of.

"You bring those things together and I think that, in large part, contributes to what we are facing today."

Meanwhile, Mr Sterling also rejected allegations of trying to deflect MLAs questions and shift the blame on to others.

He said: "I really would want to stress, I am not seeking to try and pass the buck to others. I will accept full responsibility for any failings which occurred during my time.

"I am absolutely clear about that."

DUP MLA Trevor Clarke was critical of some of the evidence presented and of Mr Sterling's leadership.

He said: "To me this is flagging up an issue within the department under your leadership at that time that there was an issue with this scheme; there was an opportunity to review it; you failed to review it and then it runs out of control."

Sinn Fein MLA Declan Kearney said he too was disappointed by the lengthy session.

He said "It sounded to me, in your opening remarks and then in response to questions that we were beginning to get a pattern that it was nothing to do with yourself.

"That's not just one member's perception, interpretation or conclusion. It is at least the opinion of another."

Meanwhile, Michelle Gildernew, also of Sinn Fein said the PAC's was to seeking to establish whether the scheme was a "cock-up or conspiracy".

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