Senior official: We knew RHI subsidy was above cost of fuel

The inquiry is scrutinising the RHI scheme's perverse incentive
The inquiry is scrutinising the RHI scheme's perverse incentive

One of the most senior officials working under Arlene Foster has accepted that her department knew that the cost of biomass fuel was less than the RHI subsidy being paid but that they failed to realise the significance of that information.

Fiona Hepper, who was a senior civil servant in Mrs Foster’s Department of Enterprise, Trade and Investment (DETI) when the scheme was being designed and in its early phase, today said that the department had access to the Sutherland Tables, which set out the cost of fuel for heating.

But Ms Hepper said that her understanding was that “the other elements” such as the hassle costs of installing a renewable boilers “were what drove it above” the fuel price.

The fact that the subsidy was higher than the cost of fuel, coupled with the absence of any cost controls, led to a perverse incentive to ‘burn to earn’.

She said that although the department was monitoring fuel prices “we didn’t see anything particularly alarming in that [data]”.

Ms Hepper was asked if the department missed signals from the heating market – including leaflets which explicitly made clear that people could make a profit from RHI. Speaking of the leaflets, she said: “We didn’t see them and looking back with hindsight, I wish I had seen them because that would certainly have triggered questions”.

When David Scoffield QC for the inquiry put to her that the department should have known, she said: “I would say, with hindsight, I don’t know how we didn’t see some of the leaflets – but we didn’t.”