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RHI scandal: Axing botched scheme 'could cost £660m in funding'

By Noel McAdam

Northern Ireland stands to lose a further £600m-plus if Stormont pulls the shutters down on its botched green heating scheme, it has been claimed.

The warning came as it emerged ministers were seeking expert advice before making any decision on how to address the Renewable Heat Incentive (RHI) that's expected to cost the taxpayer £400m over the next 20 years.

One option under consideration is to close the scheme and pay compensation to those who signed up.

But as Economy Minister Simon Hamilton pledged to bring forward proposals "as early as possible" in the new year, Ulster Unionist leader Mike Nesbitt argued the proposal to shut down the scheme raised too many questions.

"The prime concern is that the Treasury have allocated £660m for Northern Ireland to promote renewable heating. If the scheme closes, logic says this will be lost," he said.

Under RHI, businesses were able to make significantly more money than they were paying out - an estimated £1.60 for every £1 spent on fuel - which encouraged many to generate unneeded heat and still make a profit. Claims of abuse include a farmer set to pocket around £1m over the next 20 years for heating an empty shed.

First Minister Arlene Foster, who was Enterprise Minister when the scheme was set up, remains under pressure to stand aside after facing down an Assembly motion of no confidence and a walkout by all other parties on Monday.

Since then Mr Hamilton and Finance Minister Mairtin O Muilleoir have met to discuss ways of lessening the huge bill, but the Sinn Fein MLA made clear yesterday there was no indication of what would be the route chosen.

"No preferred option has been put before me and there is still much work to be done. Value for money and protecting the public purse will be my criteria in assessing any solution," he said.

"In the interim it would be inappropriate to speculate on the viability or cost of any solution. As Finance Minister, I will scrutinise any options brought forward to ensure that it stacks up and that it reduces the huge costs of RHI to a minimum."

But Mr Nesbitt asked: "Why should the people of Northern Ireland be denied access to over £600m of Government money because Mrs Foster cannot manage her department? We are seeking urgent clarification from Treasury on the status of the £660m.

"Beyond that, we need to know how closure would work, at what cost, saving how much, and how the Executive would avoid being sued for breach of contract.

"There is a real danger here that in rushing to close a botched scheme that currently stands to cost £400m, the Executive could cut the people off from access to £660m. That would not be the best way forward."

Mr Hamilton's department revealed that experts - including Attorney General John Larkin and the departmental solicitor - were still being consulted.

It said: "The department is exploring a number of cost control options to address the unacceptable levels of potential overspend. All options will need further consideration and expert advice with a view to introduction in 2017."

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