Expert advice against RHI altered at request of DETI

The Stormont department which set up the RHI scheme effectively tampered with what were subsequently presented as the findings of independent experts, the public inquiry has been told.

By The Newsroom
Friday, 1st December 2017, 12:19 pm
Updated Wednesday, 6th December 2017, 12:49 pm

In testimony which has potentially far-reaching ramifications for Stormont if it is shown that it has happened in other areas, a consultant who advised on the scheme said that it had probably “negotiated” with the Department of Enterprise, Trade and Investment (DETI) over a crucial finding of its report.

Mark Cockburn of Cambridge Economic Policy Associates (CEPA) said DETI did not want it to recommend a form of grant known as a challenge fund, even though it believed it was much better value for money than a Renewable Heat Incentive (RHI).

Instead, DETI wanted an RHI and CEPA, which was paid £100,000 for its work, did not insist on recommending the challenge fund.

In written evidence, CEPA said that “initially, CEPA recommended that DETI implement a Challenge Fund” because it judged it to be much better value for money.

The consultancy said that “however, in communications with DETI, it was clear this was not going to be a viable option. So CEPA left the recommendation open.”

Yesterday Mr Cockburn was pressed on why it had not clearly put forward its firm recommendation, something which it was contractually obliged to do.

Junior counsel to the inquiry Donal Lunny took Mr Cockburn to emails – which the inquiry has compelled CEPA to release – from earlier this year in which he had been discussing the CEPA report with another of its authors, Ian Morrow.

Mr Morrow said that it had been clear that DETI’s preference was for an RHI, with a concern about the department’s ability to administer a grant scheme cited as one explanation.

However, Mr Morrow went on to say that CEPA agreed with DETI “that the report would not make a firm recommendation”.

Later, Mr Morrow said that there would probably have been a “negotiation” with DETI about what the CEPA findings would be.

He said: “It sounds like ... I think there probably was a negotiation about what the final position would be.”

Mr Lunny said: “To echo a point that the panel have been making, should there be a negotiation – about your independent recommendation – with a client? It’s a different matter about whether a client wants to listen to what you have to say or wants to take your advice or wants, possibly for good reasons, to do something differently.”

Mr Cockburn said that if CEPA had been “forced into a position” where it had to make a recommendation, then it would have opted for the challenge fund.

Mr Lunny pointed out that contractually, CEPA was obliged to make a recommendation, to which the consultant replied: “Contracts change; they evolve or things come up which mean they’re not the same – certainly in consulting contracts.”

The inquiry chairman, retired appeal court judge Sir Patrick Coghlin, interjected to say: “That’s a novel interpretation of contract law.”

The evidence raises significant questions both about how Stormont uses private consultancies and how some of those consultancies appear to allow themselves to be used in shaping their recommendations to meet what a department actually wants in the first place.

The inquiry has already heard from officials – including an economist in Stormont’s finance department who said “I would have relied so much on the consultants” due to their expertise – that when they considered the proposal for a scheme the fact that the recommendation supposedly flowed from the views of the CEPA experts was given considerable weight in their thinking.

The inquiry has also already been probing how independent consultants brought in by the Northern Ireland Civil Service really are. Earlier this week, counsel to the inquiry David Scoffield put it to one official in relation to another consultancy firm that “to a member of the public reading these emails [requesting changes in another consultancy report] it might be surprising the level of direction that it appears the consultants are being given by the department when the department has engaged them to give their own independent advice”.

Mr Cockburn also said that on several occasions DETI was asking if it could increase subsidies, leading the consultants to think that the main concern was around them being too low – not too generous.

He said that DETI “were asking are there grounds to increase the tariff ... they were going in one way”.

And he said that CEPA had resisted “pressure” from DETI to include a tariff for large industrial sites because it believed that renewable heat installations in those circumstances were viable without any subsidy.

In written evidence, Mr Cockburn said: “Whilst CEPA is being criticised in some quarters for omitting to advise in respect of matters that it was never asked to consider, had the many things we did recommend been taken seriously (such as the need for active monitoring and review, particularly of biomass prices), the problems encountered could have been avoided or substantially mitigated.”

Mr Cockburn will continue giving evidence today.