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Stormont's botched £1bn green heating scheme a disaster, says top civil servant

By Michael McHugh

Published 10/11/2016

Experienced: Dr Andrew McCormick
Experienced: Dr Andrew McCormick

A senior civil servant has admitted he cannot remember a scheme producing worse value for money than the renewable heat incentive (RHI).

It aimed to cut the cost of green energy to encourage people away from fossil fuels - but ended up landing ministers with an overspend of hundreds of millions of pounds.

Dr Andrew McCormick is permanent secretary at the Economy Department.

He said: "It has given us more pause for thought than anything I can remember."

A lack of cost controls enabled businesses to claim huge sums of public money for running biomass boilers, with some applicants claiming vast sums for heating empty buildings.

The Department of Enterprise, Trade and Investment (Deti, now the Department for the Economy) designed the RHI.

Mr McCormick said ever since he was a junior civil servant in the Department of Finance in the 1980s he had been taught to 'ask why' repeatedly, and that had not happened in this case.

He added: "I cannot recall anything that was on the scale in relation to both opportunity costs to public services and...poor value for money."

Millions will have to be set aside annually to cover the cost of the 20-year scheme.

Mr McCormick reassured Public Accounts Committee (PAC) members at Stormont that lots of mechanisms in the Government did work following decades of learning.

Committee member Daniel McCrossan said: "This is an unprecedented scandal beyond belief.

"It has damaged the credibility of this institution."

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

The firms installed new appliances under the RHI scheme, which is now closed.

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.

Thousands signed up to the scheme, which started in 2012 and was extended to domestic customers in 2014.

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.

In effect, that enabled a business to burn unnecessary heat just to make money.

According to whistleblower claims, a farmer is allegedly in line to receive £1m over the next 20 years for heating an empty shed.

Large factories in Northern Ireland are also allegedly on course to pocket £1.5m over two decades for running incentivised biomass boilers all-year round in premises which previously were not heated.

In July an Audit Office report found "serious systematic failings" in the Stormont-run renewable energy scheme.

The Auditor General said there was insufficient evidence that the department's controls over the spending on the scheme were adequate to prevent or detect abuse.

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