Foster’s officials ‘were warned of key RHI flaw’

Arlene Foster

Five months before the RHI scheme began, experts warned Arlene Foster’s department to delay the launch so that cost controls could be included – but officials said that the DUP minister was determined to press ahead with the scheme, the public inquiry into the scandal has been told.

In evidence which points the finger at the DUP leader for what turned out to be the critical flaw in the disastrous green energy project, Ofgem has told Sir Patrick Coghlin’s inquiry that it attempted to delay the scheme in 2012 due to the absence of mechanisms to control the cost of the green energy project.

DUP leader Arlene Foster

The claim – which was made by Ofgem, which was the organisation then running the RHI scheme in Great Britain and which would eventually be asked to run the Northern Ireland scheme on behalf of Mrs Foster’s department – was made in a meeting involving officials from Mrs Foster’s department.

It was not clear from what was said at the inquiry yesterday whether the warning that cost controls were necessary was ever explicitly put to Mrs Foster, and David Scoffield QC, counsel for the inquiry, said that there was a “paucity of [documentary] evidence” within the department around the issue.

Mrs Foster has consistently said that she was not at any point advised that cost controls were necessary and it is understood that that remains her position.

Yesterday the inquiry was also told that a whistleblower from within Ofgem had come forward to Sinn Fein in January and had submitted evidence to the inquiry.

David Scoffield

He has made a series of serious allegations about Ofgem, including a cover-up. It denies the allegations.

The absence of cost controls, along with a subsidy level which was higher than the cost of fuel, were the two critical flaws, although there were myriad other failures, which led to the vast overspend – something which the department now claims could be as high as almost three quarters of a billion pounds over 20 years.

Yesterday evidence opened at the inquiry alleged that Mrs Foster, who over the last year has repeatedly sought to distance herself from the key flaws in the scheme, made a decision to press ahead with setting up the RHI scheme without cost controls, despite advice from Ofgem that her department should wait and include cost controls which were about to be introduced in GB.

At that point in Great Britain there was one form of cost control – tiering – which was stripped out by Stormont.

But even with that one cost control measure, Whitehall’s Department of Energy and Climate Change (DECC) wanted a further cost control, degression, to address potential problems which it had identified.

In response to questions from the News Letter in February, the DUP said: “At no point did Mrs Foster ever refuse to introduce cost controls.”

And in December, in an interview with Stephen Nolan, Mrs Foster was asked if she could say “I am sorry I didn’t put in cost controls”. She responded: “Well of course I’m sorry I didn’t put in cost controls but I wasn’t advised that I needed to put in cost controls at that particular pointing time – I mean, this is all very well looking back, knowing now what we know but at that particular point in time the recommendations, the submissions from all of the experts in the field here in Northern Ireland were that this was the scheme that we needed to go forward on.”

Mr Scoffield yesterday referred to written evidence which the inquiry has compelled Ofgem to release. Referring to that evidence as he continued his lengthy opening statement, Mr Scoffield said that in 2012 Ofgem had said it advised DETI not to proceed with the Northern Ireland regulations until the pending amendment to the GB regulations.

However, he said that Ofgem had said that “DETI’s response was that Northern Ireland ministers wanted the scheme to go ahead as soon as possible and did not wish to wait for amended GB regulations”.

Mr Scoffield said that the issue was then raised at a conference call between Ofgem and DETI on June 26, 2012. According to an Ofgem minute of that call, Mr Scoffield said that “Ofgem personnel advised DETI to wait until the GB regulations were amended as those amendments would negate risks which the draft Northern Ireland regulations currently posed.

“Ofgem’s evidence is that the department recorded the minister’s wish to proceed without waiting or having reviewed the amendments to the GB RHI scheme”.

Mr Scoffield said that the minutes of the call showed that someone from Ofgem’s legal department had fed in some comments on the regulations and on the issue of cost controls which DETI “said were helpful and would consider as part of the process to finalise the regulations.

“DETI confirmed that it was their intention to have a phase two update to the regulations in summer 2013 which will reproduce the amendments on which DECC intends to consult this summer”.

Mr Scoffield highlighted that those changes promised by DETI never happened in 2013.

Outlining extensive Ofgem concerns at the time, Mr Scoffield went on: “The point was made by Ofgem that this [pressing ahead with the regulations, as DETI wanted to do] would mean replicating the issues that have proven necessary to address in the GB regulations. Ofgem’s advice was to wait until the GB regulations were amended as the amendments will serve to negate any risk that the regulations currently pose.”

Witnesses to the inquiry are operating under a prohibition from the inquiry chairman which means that they are expected to refrain from commenting on evidence as the trial goes along and restrict their comments to their written evidence and then their appearance in person at the inquiry.

Last night Mrs Foster’s solicitor, John McBurney, told the News Letter that Mrs Foster “will clearly have much to say in due course about the various aspects being outlined in these preliminary stages and evidence to be given in due course by others.

“She will challenge as necessary much that may be said by some but wishes to be respectful to the inquiry processes and wait for the opportunity to give a full and effective account of her position at all relevant points.

“She and indeed the other individuals for whom I am also acting are very mindful of the cautionary remarks from the chairman about dealing with all of these significant matters within the forum of the inquiry and not elsewhere.”

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