RHI scheme was let down by incompetence, hopeless oversight and a catalogue of errors, court hears
Northern Ireland's Renewable Heat Incentive scheme was let down by incompetence, hopeless oversight and a catalogue of errors, the High Court heard on Wednesday.
Counsel for a group of boiler owners challenging cuts to their payments under the botched initiative claimed the Stormont department at the helm ignored opportunities to impose cost controls.
Gerald Simpson QC argued that officials apparently forgot Treasury advice that it would not foot the bill for any overspend.
He said: "It was not only badly thought out and badly designed, but it could have been rescued if the Department had taken any steps to carry out reviews.
"The incompetence starts at the beginning and goes right through to the end.
"It's quite clear they thought London is going to pay for it."
More than 500 members of the Renewable Heat Association NI Ltd are taking legal action against the decision to reduce tariffs assured under the original 2012 regulations.
They argue there was no legal power for the move announced by the Department for the Economy.
Under the scheme businesses and other non-domestic users were encouraged to move from using fossil fuels to renewable heating systems.
But with operators legitimately able to earn more cash the more fuel they burned, the cost to the public purse has been projected at up to £490 million - a figure disputed by the Association.
The debacle led to the collapse of Stormont's power-sharing administration, and the establishment of a public inquiry chaired by retired judge Sir Patrick Coghlin.
Earlier this year former Economy Minister Simon Hamilton set out revised 2017 RHI Regulations as part of cost-cutting proposals.
Lawyers for the Association contend this was an illegal step against boiler owners with 20-year contracts.
As part of a wider challenge they are seeking to have the move declared ultra vires, or beyond the Department's legal powers.
Opening the Association's application for judicial review, Gerald Simpson QC told Mr Justice Colton anyone who included in the 2012 regulations had their payment rates fixed for 20 years.
"There was a representation on the part of government that if you joined your tariff level would remain unchanged for the lifetime of accreditation," he said.
"It's precisely in breach of that, and a direct contradiction of that, that the 2017 regulations were promulgated.
"They have flown in the face of all government representations."
A letter to banks in 2013 from the then Enterprise Minister, urging them to lend to businesses using the biomass boilers, was said to back the Association's case.
With subsidy levels described in the correspondence as "reliable and long-term", the barrister claimed it amounted to a "cast-iron guarantee".
In a withering assessment of how officials ran the scheme, Mr Simpson pointed to high levels of staff turnover and alleged failures to take common sense steps to control the costs.
He contended: "Your Lordship will be long on the bench before he sees such a catalogue of errors by a government department."
Citing audits of the initiative, the barrister continued: "When one looks at these sorry failures it rather looks like the scheme was brought in and just left."
Any steps to take mitigating action following the "light bulb moment" of potential financial implications were "hopeless", he claimed.
"This is a government department and its agent who just do nothing," Mr Simpson said.
By comparison, according to his submissions, a similar incentive in Britain introduced cost controls when increased demand was spotted.
"That is light years away from the competence evinced by this Department," he told the court.
Challenged on the tiering which started in 2015, he responded: "That's long after they missed opportunity after opportunity."
Earlier, in a reference to press concerns about the potential for the scheme to be misused, Mr Simpson stressed available sanctions such as the stopping of payments and removal of accreditation.
"The Department has always had, since 2012, this panoply of powers, but seems not to have used it," he added.
During the hearing it was pointed out how Incentive was aimed at persuading businesses to replace exiting "tried and trusted" heating systems with biomass installations.
The court heard how one poultry farmer took out a loan in excess of £300,000 on the understanding that his tariff would be fixed for 20 years.
In an affidavit the operator explained how he has always been an honest participant who now feels unfairly prejudiced and concerned about being able to pay back the bank.
"The financial burden undertaken by applicants for the scheme was very considerable," Mr Simpson said.
The hearing continues.
Belfast Telegraph Digital