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Live Reporting

By Robin Sheeran and Iain McDowell

All times stated are UK

  1. That's all for today...

    There's much still to get through with Ms Hepper, says Mr Scoffield, so she'll probably have to come back another day.

    "I think everybody could do with a finish at the moment," says Sir Patrick as he wraps it up for the day.

    Parliament Buildings after dark

    If we can make it up the hill through tomorrow's forecast snow, we'll be back in the chamber at 09:45 GMT.

    And Tuesday's star witness, DETI official Peter Hutchinson, will be back in the spotlight - join us then.

  2. 'I assumed expert advice was right'

    One of the main reasons why the RHI scheme turned into the disaster it did is because there was no tiering system in place for the subsidies on offer in the scheme.

    It was an important way of controlling the cost of the scheme and works by lowering the tariff on offer once a certain limit of usage has been reached, with the intention of preventing a claimant from overusing their heating system to collect more cash.

    Money

    Ms Hepper says she asked the CEPA consultants who drew up the subsidy model for biomass boilers whether it needed needed to be tiered and the answer came back that it didn't.

    Dr MacLean says the numbers didn't stack up in the documents presented by CEPA to DETI and Ms Hepper says she would've assumed that the expert advice would've been right.

  3. 'DETI didn't push consultants for particular conclusion'

    Last week, internal emails between senior consultants at CEPA were revealed that appeared to suggest that they felt they could not firmly recommend that DETI should pursue an ongoing subsidy scheme, which they claimed the department had wanted them to do.

    CEPA director Mark Cockburn told the inquiry that his firm's conclusion was tempered to suit DETI's policy agenda.

    Boiler

    But Ms Hepper says DETI was "certainly not pushing them in one direction or another - that is not what we were paying for".

    "We wanted evidence, we wanted information, we wanted a professional recommendation."

  4. 'Big cost increase should've set alarm bells ringing'

    Inquiry panel member Dr Keith MacLean asks whether Ms Hepper didn't think she should have drawn the minister's attention to one particular difference that emerged between CEPA's draft and final reports.

    "The costs that were being advised to you in this report, just one month later than the previous one, had gone up by almost a third, by £111m," he points out.

    "Would that not have been a significant factor to go back to the minister?"

    Dr MacLean

    "I didn't go back to her on that - I submitted the report and I didn't specifically highlight anything further," Ms Hepper says.

    Dr MacLean says the large cost increase "must have set alarm bells ringing".

  5. 'Foster was told of stark value for money difference'

    The final CEPA report said the cost benefit of a up-front grant scheme was much better than an ongoing subsidy offer - in fact, it went so far as to say the differences between the two were "pretty stark".

    The decision had already been made to go with a subsidy scheme based on the draft report, and Ms Hepper says she didn't feel there needed to be any further consideration when the final paper was received.

    Dame Una questions whether Ms Hepper clearly raised the substantial difference in value for taxpayers' money between the schemes with the minister before the decision was taken - she says she did.

  6. 'Detail in submission doesn't match consultants' advice'

    CEPA's advice on what type of scheme to pursue isn't accurately reflected in the submission to Mrs Foster, suggests Mr Scoffield.

    In the submission, Ms Hepper wrote in one section that the ongoing subsidy scheme is the "preferred approach" and offers the "highest potential renewable heat output at the best value".

    David Scoffield QC

    But the draft report had found that an up-front grant fund was better in that regard.

    When Mr Scoffield suggests it's ambiguous, Ms Hepper insists that her intention wasn't to present it that way and it was explained to the minister when they met.

  7. 'Difficult to assess if minister received full details'

    Sir Patrick says he's concerned that so much went on in the meeting with Mrs Foster on 13 June that isn't in Ms Hepper's submission and he asks if it was just held between the two of them.

    "I had somebody else with me," she says, adding that she thought it was Peter Hutchinson but it could've been Joanne McCutcheon.

    Sir Patrick Coghlin

    Ms Hepper explains that the details not in the submission were talked through to the minister at the meeting.

    Panel member Dame Una O'Brien observes that: "It's extremely difficult to address whether fair information and full information was given to the minister."

  8. 'Biomass boilers installed on Stormont estate'

    Pariament Buildings at Stormont

    There was an intention for the public estate to lead by example in switching from fossil fuels to produce heat to using biomass boilers instead, says Ms Hepper.

    She says the Department of Finance, which controls the public estate, "availed of biomass" for parts of the Stormont estate but she's not sure if it's collecting money from the RHI scheme.

  9. 'Advice to minister based on assumption'

    In the submission, Ms Hepper told the minister that the RHI scheme would be open until 2020 as far as the Treasury was concerned.

    But given that the funding had only been guaranteed until 2015, Sir Patrick says the view expressed in the submission was based on an assumption.

    Sir Patrick Coglhin

    He asks why Mrs Foster wasn't advised that there was no guarantee from the Treasury.

    Ms Hepper says: "I think that's what I was trying to tell her."

  10. 'Foster didn't ask me for scheme preference'

    "Did the minister ask you, as the director of energy, what route you thought she should take?" Mr Scoffield asks

    Ms Hepper says they had a full discussion of the alternatives but she doesn't remember having, sharing or "being asked for a preference.

    Fiona Hepper

    Mrs Foster expressed a preference at the end of the meeting, according to Ms Hepper, but said she would "reflect and come back".

    "I think she signed the documents off the next day," she adds, saying that there could have been a further discussion between Mrs Foster and her special adviser after the meeting.

  11. 'Foster wasn't given advance copy of report'

    Matters move to a submission Ms Hepper sent to the minister, Mrs Foster, on 8 June 2011 ahead of a public consultation on a possible RHI scheme.

    Mrs Foster was told of the conclusions in the CEPA's draft paper and the point was made that "issues" had to be addressed before the final report would be published later that month.

    Arlene Foster

    A copy of the draft was not included with the submission, but Ms Hepper says she took one to a meeting with the minister shortly afterwards because it would be easier to show and talk her through the detail in person.

    Mr Scoffield suggests that is counter-intuitive, and it could've been easier for Mrs Foster to look through the figures before the meeting than to have them presented to her during it.

    Ms Hepper says Mrs Foster "appeared to be content" with receiving them at the meeting, and neither she nor staff in her private office requested a copy beforehand.

  12. 'Officials made assumption that others knew'

    We're back in the saddle, and inquiry chair Sir Patrick Coghlin informs us we'll be here until 17:00 today.

    Looking at the funding for the RHI scheme, inquiry counsel David Scoffield QC refers to the first submission to DETI minister Arlene Foster on the subject of renewable heat, in May 2011.

    Sterling banknotes

    It states that the Treasury "has advised that £25m" of funding is available, but Mr Scoffield asks why DETI did not make it clear that the funding was an unusual type and overspending would have implications for the Northern Ireland block grant.

    Ms Hepper confirms that it was described in the submission in standard terms as a way of "shorthand".

    "I certainly think it wouldn't have been unhelpful to have been a little more explicit," she says, adding that the officials "probably made an assumption that people knew there was a qualification there".

  13. Time for lunch...

    We've a short break for lunch now, and Mr Scoffield and Ms Hepper will resume their Q&A at 14:00 GMT - join us then.

  14. 'I couldn't understand consultants' logic'

    CEPA delivered its draft final report in May 2011, and it recommended an ongoing subsidy scheme, in spite of the fact that several tables in the paper indicated that a up-front grant offer would give better value for money.

    DETI's Peter Hutchinson asked CEPA for clarification, and it replied that the recommendation "is based on the assumption that DETI wants to do" a subsidy scheme.

    Fiona Hepper

    Ms Hepper says the body of the draft report weighed both up but "then we plonk into" the concluding chapter and the "sole recommendation" is to do subsidy scheme.

    It was not CEPA's place make an assumption, Ms Hepper adds, and "that was a surprising statement for them to come back with".

    She says she had a meeting with the renewable heating team "because I couldn't understand the logic" behind the recommendation.

  15. 'My staff didn't accept all they were told'

    DETI did not have the necessary economic expertise to set up the RHI scheme without the help of external consultants, accepts Ms Hepper.

    She is asked therefore what assurance she had that her staff had the necessary knowledge to understand what the consultants ultimately recommended and and spot and challenge the errors they made.

    Fiona Hepper

    Ms Hepper says the reviewing her staff did it was "as good as we could do" and when they didn't comprehend what they were told they "kept going back to ask until we got an explanation that was understandable".

    She insists that her staff did not simply accept everything they were told.

  16. 'Economist didn't have necessary energy knowledge'

    The consultancy Cambridge Economic Policy Associates (CEPA) drew up the report in 2011 that assessed several options for a heat scheme.

    Ms Hepper says DETI economist Sam Connolly provided "the required professional challenge" to the work - he was not an energy expert but he had experience of energy issues, she adds.

    the RHI inquiry in session

    Mr Scoffield says the economist's written evidence shows he felt didn't have "the knowledge or experience to look in detail at the calculation of tariffs, or assumptions, or modelling".

    Ms Hepper says that while he did consider the wider economic analysis "he did provide some perceptive comments in and around the tiering issue".

  17. 'Did Foster specify preference for subsidy scheme?'

    Dame Una asks whether Ms Hepper had "an explicit steer" from the minster Mrs Foster along the lines of: "I really want a scheme like the [GB RHI] scheme - that's what I'm after".

    Dame Una O'Brien

    The minister would never have given a specific direction like that, says Ms Hepper.

    "I don't recall any conversation across the whole time that we were doing the work where she would have been as specific as that," Ms Hepper replies.

  18. 'Scheme model not selected before economic report'

    One of the key questions the inquiry has focused on so far is whether DETI had a preference for the type of renewable heat incentivisation scheme before any economic appraisal was carried out on the options for it.

    An up-front grants scheme for installing biomass boilers was found in an economic report to offer a much better cost benefit than an ongoing subsidy scheme similar to the Great Britain RHI initiative.

    A man making calculations

    But the subsidy scheme was ultimately adopted, and Mr Scoffield picks out documents from 2010 that appear to suggest that DETI had already decided it wanted to go with that model before a review was done.

    Ms Hepper accepts that it looks that way "in the cold light of retrospection" but says it would have been wrong to "pre-judge the economic appraisal" and insists that no decision was taken before it was produced.

  19. 'Renewables sector felt it was being left behind'

    Mr Scoffield takes the inquiry through the recommendations of consultants at Aecom and Pöyry in 2010, who DETI commissioned to research the potential for developing renewable heat production.

    He asks whether there was an assumption at DETI that an incentivisation scheme similar to the RHI in Great Britain was "the way to go".

    Burning wood pellets

    Ms Hepper says the view was that money was available and DECC was using it for an RHI scheme.

    "The (renewable heat) sector were saying: 'What's happening here? We're going to be disadvantaged and we're going to be left behind'," she says.

  20. 'No references to cost controls in key handover note'

    A first review of the RHI scheme was to take place in early 2014, which would have allowed a chance to identify any problems with it and make the necessary changes to it, but it never actually happened.

    Ms Hepper outlines some of the work she did in preparation for the review before she left DETI in November 2013.

    Inquiry panel member Dame Una O'Brien wants to know what Ms Hepper laid out for her successor John Mills in terms of what he needed to do concerning the review.

    Two people look at a note on a clipboard

    Ms Hepper says she had a half-day handover session with Mr Mills and "talked him through the key issues" but can't say what level of detail she gave him, although she can remember telling him about the need to add cost controls to the scheme.

    Sir Patrick indicates that her handover note of almost 30 pages included only "two or three" on renewable heat and there were no references to cost controls: "It was all verbal, was it?"

    Ms Hepper says it was, and with that Sir Patrick sits back in his chair: "Thank you very much..."