Inquiry pulls out lessons from Northern Ireland’s energy scheme scandal

By on 17/03/2020
Shepherd’s delight: farmers reportedly made large profits by heating empty barns using renewable energy sources, then claiming subsidy payments. (Photo by JuergenPM via Pixabay).

Northern Ireland’s Renewable Heat Incentive (RHI) scheme – whose botched handling led to the three-year collapse of the region’s administration – was a “project too far” for the NI Executive and “should never have been adopted”, according to an independent inquiry.

The inquiry, which was established in 2017, ruled out corrupt or malicious activity as the cause of the energy scheme’s failure, but said that an “accumulation and compounding of errors and omissions over time” – by the minister, special advisers and officials – led to its failure.

The inquiry report included criticism of Arlene Foster – then minister at the Department of Enterprise, Trade and Investment (DETI), and now Democratic Unionist Party leader and the province’s first minister – for her role in the programme. However, it pointed out that she had been incorrectly informed by officials that the project was value for money, and questioned the quality of advice provided by her special advisers.  

The scheme was meant to incentivise businesses to meet their heating needs from renewable sources, but saw applicants “perversely incentivised” to produce excess heat in order to turn a profit from subsidy payments. The scheme is estimated to have cost the public purse £490m (US$596m) before it was axed in 2016, four years after it was introduced.  

The inquiry’s 656-page report, published on 13 March, outlines 39 key failings. It found that an alternative plan set out by an external economic consultant was not considered carefully enough; the risks around the RHI scheme were not sufficiently understood; there were repeated missed opportunities to identify and correct flaws in the scheme; the DETI did not review the scheme when it should have done; and amendments made to the scheme in November 2015 were ill-considered and ineffective.

No budget control mechanism

In addition, the nature of the relationship established between DETI and Ofgem, the chosen scheme administrator, was found to be unsatisfactory; the unusual funding model behind the scheme was not made clear in submissions and business cases, nor properly explained to Foster; important documents prepared within DETI concerning the scheme were “often inaccurate, incomplete or misleading”; and “crucial ‘safety’ features”, including a budget control mechanism that was incorporated into Great Britain’s version of the scheme, were not introduced.

The inquiry report said that DETI did not ensure that adequate resources and expertise were applied to the scheme’s development, delivery or running, and that junior civil servants responsible for the scheme day-to-day were “consistently under-resourced, not equipped with the necessary expertise, nor adequately supported”.

Ultimately, it found that internal governance systems were ineffective and that officials “were not encouraged sufficiently or effectively to have a questioning attitude, to escalate concerns, to pause for investigation or to suggest that developments be stopped when problems arose”.

The inquiry pointed to Northern Ireland Civil Service (NICS) policy, which led to the deployment of generalist civil servants “without having due regard for the distinctive requirements of certain roles”, as a contributory factor to the problems.

Although the report said lessons had been learnt from the failed RHI scheme, “there is no guarantee that the weaknesses shown in governance, staffing and leadership revealed by the inquiry’s investigation… could not combine again to undermine some future initiative”. It urged the NICS to “develop a better process to learn from past failures”.

Thorough scrutiny

Among its 44 recommendations, the inquiry board – led by chair Sir Patrick Coghlin – said that a “fundamental shift” is needed in the approach used within the NICS with regard to recruitment and selection for government jobs, and that this should lead to “more job-specific recruitment and selection”. It argued that new policies should be subject to a rigorous process to determine whether the administration can assign the necessary skills and resources to deliver them safely and competently. And it said that “novel, potentially volatile and untested initiatives” should in future be scrutinised thoroughly, well ahead of ministerial and business case approval.

The report said the Special Advisor Code of Conduct should be reviewed; the advisory role of the special adviser in relation to ministerial decision-making should be clearly set out for officials to understand; and that action is needed to raise and sustain the quality of advice to ministers and the clarity with which it is expressed.

It also recommended that where other government bodies, such as Ofgem, or contractors or other third parties are involved in the implementation of a project, the ‘home’ department must retain overall control and overall project management, and that Northern Ireland’s political parties should together agree a set of actions to reduce organisational silos and promote collaboration and joined-up departmental working.

“Determined to learn from my mistakes”

The RHI scandal contributed to the resignation in January 2017 of Sinn Féin’s Martin McGuinness, Northern Ireland’s deputy first minister, citing Foster’s refusal to step down from her role while an investigation into the RHI scheme took place. His departure led to the collapse of the power-sharing arrangement until ministers returned to Stormont in January 2020.

After the inquiry report was published last week, Foster repeated an apology for her “failings in the implementation” of the RHI scheme. She said she was “determined to learn from my mistakes and to work to ensure that the mistakes and systematic failures of the past are not repeated”.

Speaking in Stormont on Monday for the first time since its publication, Foster appeared close to tears as she talked of her “dark moments” following the scandal, which included allegations of corruption.  

She told Members of the Legislative Assembly of her “deep personal regret” over her mistakes, “particularly those opportunities I had or could have taken to address some of the issues that subsequently emerged”, and concluded by acknowledging her role “in damaging public trust”. She said she was determined to play a full part in rebuilding that trust “and doing all I can to ensure a better way of working as we move forward”.

“This is not a day for recrimination, it is a day for learning,” she added.

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *