Official: I knew cost controls were needed 18 months before RHI began

Written evidence to the inquiry from Alison Clydesdale, who was a mid-ranking official in the Department for Enterprise, Trade and Investment (DETI) as the scheme began to evolve, shows that there was a recognition that cost controls were necessary at least 18 months before the disastrous scheme was opened for applications.

None of the evidence which emerged yesterday points to the information having been passed to the minister or her special adviser.

Yesterday Ms Clydesdale appeared before the inquiry as its first witness and gave evidence for about four hours.

The inquiry published more than 250 pages of written evidence submitted by the official, who now works in Stormont’s Department of Education.

In that written evidence, Ms Clydesdale said that in May 2011 “I recognised the need for cost controls to control over/under spending and the associated risk”.

That claim is supported by an email to fellow officials on May 4, 2011 - two days before she left her role - in which Ms Clydesdale said that DFP [Stormont’s finance department’ would “require evidence of our ability to control the scheme in order to minimise over/under spending in any one year”.

The inquiry has already been told that Ofgem, which administered the scheme, repeatedly and forcefully warned the department prior to the scheme’s launch that it needed cost controls.

However, Ms Clydesdale’s evidence suggests that within the department there was knowledge of the need for cost controls at least six months before it was raised by Ofgem in November 2011.

In isolation, the evidence does not explain why the department later nodded through a scheme without tiering - based on the erroneous claim by consultants CEPA that the cost of fuel was higher than the subsidy - or any form of cost control, although by that time Ms Clydesdale had moved on.

Ms Clydesdale’s evidence also contains part of an email sent on May 3, 2011, from Bernie Brankin, a senior official in DETI’s finance branch, to four colleagues, in which she had raised the issue of cost control. In the email, Ms Brankin, who is to give evidence to the inquiry today, wrote: “Please copy Finance [branch] into your draft [RHI scheme] proposals which would need to address the controls that you would put in place to prevent significant under/over spending. These proposals will also require DFP approval.”

Ms Clydesdale also set out another occasion where the issue of tiering - a crude form of cost control which makes it less lucrative to run a boiler above a certain number of hours - had been raised early in the process of designing the scheme.

She said that DETI economists had in April 2011 gone back to CEPA after their draft interim report, saying in writing that they “also need to consider having payment tiers for biomass as per GB RHI”.