Department in charge of N Ireland botched green energy scheme hits back at Ofgem

A lawyer representing the department which designed Northern Ireland’s botched green energy scheme claimed Ofgem failed to warn of a ‘bear trap’, an inquiry has heard.

Neasa Murnaghan QC said that the Department for the Economy’s current permanent secretary Noel Lavery accepts that the department “could have done more and should’ve done more”.

However, she rejected a claim by Ofgem that it had adequately warned of flaws in the design of the Renewable Heat Incentive (RHI) scheme.

The claims came during final submissions to the public inquiry in Belfast which was set up to probe how costs in the RHI scheme spiralled.

Renewable Heat Incentive inquiry
Renewable Heat Incentive inquiry

The scheme sparked a scandal in 2016 when it emerged that costs had spiralled due to over-generous subsidies being paid to encourage the use of green energy.

The result was an anticipated massive overspend, falling to the Northern Irish taxpayer to pick up.

The fiasco led to a political row, the resignation of Northern Ireland’s then deputy first minister Martin McGuinness and the collapse of the powersharing government in January 2017.

The RHI Inquiry, led by retired judge Sir Patrick Coghlin, is hearing final submissions this week before it reaches its conclusions at a later date.

Earlier on Wednesday, a lawyer appearing on behalf of Ofgem said it accepted significant failings, but insisted those failings did not cause the key problems in the scheme.

Jason Beer QC said: “Ofgem lucidly and cogently identified a number of the risks about the design of the scheme to the department when the department was drafting the regulations in November 2011.

Renewable Heat Incentive inquiry
Renewable Heat Incentive inquiry

“We say these are not failures by Ofgem to communicate concerns about the design of the scheme at its inception, they are failures by those to whom the concerns were communicated to heed them and to act upon them.”

Ms Murnaghan responded later as she made final submissions for the Department for the Economy, formerly the Department of Enterprise, Trade and Investment.

“We say that although we accept primary responsibility for the development of the policy, others are not absolved of responsibility where they perceived a bear trap … to fail to draw that again to Deti’s attention,” she told the inquiry.

She said: “Undoubtedly the lion’s share rest with the department,” but added “it would be misleading to look at the department in a vacuum”.

“What we expected from Ofgem was some vital feedback as our delivery partners in real-world perspective, experienced as they were from their role in the GB RHI scheme,” she said.

“With all of that in mind, we say that the recommendations were certainly not as clear as Mr Beer’s portrayal this morning would have them.”

The department was led by Democratic Unionist leader Arlene Foster (2008-15) when the RHI scheme was designed, and later her colleague Jonathan Bell (2015-16) over the period that costs spiralled.

The inquiry previously heard claims that DUP special advisers pushed to delay the introduction of cost control measures to the scheme.

This has been denied by a number of special advisers.

It also heard claims that DUP ministers did not follow the protocol in the appointment of its special advisers, and that senior civil servants had been aware of this.

Sir Patrick asked Ms Murnaghan whether there was “a problem in intimidation of civil servants”.

She said she had no instruction on that, but when pressed she accepted that “some compromises were unfortunately made”.

Earlier in the hearing, Sir Patrick described hearing how Ofgem lawyer John Jackson advised a colleague against handing police some of the information it held about an application to the scheme by then DUP special adviser Stephen Brimstone as a “rather extraordinary development”.

Ofgem audited Mr Brimstone’s RHI boiler and concluded he joined the scheme legitimately.

The Police Service of Northern Ireland investigated an allegation of fraud it received over Mr Brimstone’s application. No crime was detected.

Mr Jackson said in a written submission: “Nothing in the documents … would’ve assisted the police in a criminal prosecution of Stephen Brimstone.”

Mr Beer told the inquiry on Wednesday it may not be appropriate for the inquiry to “draw broad conclusions” about Ofgem’s “attitudes and cultures” on the basis “of a relatively junior lawyer’s emailed advice in one case”.

Closing submissions to the RHI Inquiry will continue to be heard across Thursday and Friday.