RHI inquiry: civil servants often take decisions which may seem wrong, admits official

Shane Murphy, the chief economist at the Department for the Economy, told the public inquiry into the RHI scandal that civil servants believe that there is a much bigger picture and even though the rules may seem absurd to them, they trust that there is a grand plan which they cannot see and that the rules by which they operate have been put in place for good reason.

Mr Murphy made the comments as he was pressed to explain why the department had chosen to set up an RHI scheme in preference to a much cheaper grant-based alternative which consultants paid £100,000 to advise the department on the issue had favoured, saying that it would deliver more renewable heat at a saving of about £300 million.

On Wednesday, Mr Murphy – one of the few who queried that choice – admitted that it would seem “strange to the outsider” that the RHI scheme was favoured over the cheaper alternative partly because the department would in the short term not need to put as much of its own budget into running it.

The department was prepared to see taxpayers pay £300 million more for the RHI scheme at least partly because it could save £3.5 million from its own budget for administering it.

Mr Murphy had a limited role in the RHI scheme and his main involvement with the scheme was a meeting of less than three hours in which he and colleagues approved it to go to the then minister, Arlene Foster, and others for final approval.

Yesterday inquiry panel member Dame Una O’Brien, a former senior Whitehall civil servant, asked him: “Didn’t you or your colleagues find yourselves in a position of saying ‘isn’t this ridiculous that we’re in a position of going along with something that appears to be a lot more expensive just because we can manage the admin costs?’

“Did you ever observe the apparent weirdness of it?”

Mr Murphy replied: “Folks at the coal face observe those sorts of ... [Dame Una said “paradoxes”] ... yeah, that to the common person seem really odd ... somewhere in Treasury there’s a big picture where these things make sense but at the coal face these don’t always make sense.

“But the rules that they live within because somewhere somebody is making the rules for some particular reason – it’s a big picture that they’re not necessarily aware of but at the coal face it means that certain things have to be in certain budgets; those things drive certain choices and you pick the cheapest thing that you can afford to do within those [parameters].”

Dame Una asked: “You didn’t observe to each other that what to the man in the street looks like a very strange set of circumstances – and I’m not saying that you were the only people that faced that because there were other examples?”

Mr Murphy said: “Frankly, that’s the point – we see these things so often that we’ve become ... we no longer see them as odd as the man in the street thinks.”

He added that this sort of issue – making a choice which may seem nonsensical to someone outside the civil service out of a belief that it makes sense as part of a bigger picture – “would be made relatively regularly”.

As the exchange continued, inquiry chairman Sir Patrick Coghlin eventually said: “Mr Murphy, just to stop you there. You can rest assured that we are fully aware of the complexities and the bureaucracy of the way in which this organisation ran – despite the fact that to the ordinary member of the public the common sense approach would be to see if you can get a way around this because the saving is so much.”

The inquiry will next sit on January 8.