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Live Reporting

Robin Sheeran and Iain McDowell

All times stated are UK

  1. That's all for now...

    He's spent two whole days in the witness chair, but Mr Sterling will have to return for another while on Thursday to conclude his evidence.

    Stormont's Parliament Buildings

    We'll be back tomorrow morning, when Stuart Wightman - a DETI civil servant who worked directly on the RHI scheme from autumn 2014 on - will face the inquiry, so join us from 09:45.

    Thanks for following!

  2. What happened today at the RHI Inquiry?

    BBC News Northern Ireland

    Northern Ireland's top civil servant admitted personal responsibility for failings in the RHI scheme.

    Arlene Foster

    David Sterling told the inquiry that he now felt he should have asked the then enterprise minister Arlene Foster (above) not to go ahead with the initiative, which could end up costing the public purse hundreds of millions of pounds.

    But he said he was not sure that even if he and senior colleagues had made that case it would have been accepted by Mrs Foster.

  3. 'Don't know why key scheme review didn't happen'

    An internal review of the RHI scheme was due to be conducted in January 2014 but that never happened.

    Asked if he knows why that was the case Mr Sterling says he doesn't know and he's "nonplussed".

    A finger pointing at numbers on a screen

    "In actual fact as the evidence has unfolded and witnesses have given their statements I'm actually at a greater loss why it didn't happen," he adds.

    It should've been in the annual operating plan for DETI's energy team.

  4. 'No intolerable pressure to prioritise domestic RHI'

    Dr MacLean asks where the "pressure" to introduce the domestic RHI scheme came from, given that there was already an initiative - the Renewable Heat Premium Payment (RHPP) - that was supporting people who wanted to install renewable heat systems in their homes.

    He asks if there was a "ministerial edict", and queries what pressure there may have been from stakeholders, such as businesses and biomass boiler installers.

    Burning wood pellets

    Mr Sterling says the RHPP was seen as an "interim" scheme that would be in place until the domestic RHI opened.

    He says he doesn't remember any order from the then DETI minister Mrs Foster, and while there was "some stakeholder pressure" it wasn't to the level that the department felt on other energy issues.

    He can't recall any "intolerable pressure from any source" to get the domestic scheme opened at the expense of introducing cost controls.

  5. 'Decision to defer cost controls should've gone to minister'

    DETI had intended to develop the RHI scheme in autumn 2013, opening up a similar offer to domestic users and adding cost controls to the non-domestic initiative at the same time.

    But somewhere along the line the cost controls fell down the department's priority list and it ultimately didn't happen, as had been planned.

    Mr Sterling says he was aware of a "desire to get the domestic scheme up and running" but he didn't believe that to be at the expense of the introduction of cost controls.

    Pound coins

    Had a conscious decision been taken for the cost controls to be pushed back to speed up the opening of the domestic scheme, it should've been referred to the minister and DETI's top management team, he says.

    DETI's then energy boss Ms Hepper has told the inquiry that cost controls should have gone hand-in-hand with the opening of the domestic scheme and she said she made her successor aware of the need for budget protection measures.

    John Mills, who succeeded her, says in his written statement that cost controls were "far from being energy division's... priority" when he took up the role.

  6. 'Hard to justify why scheme board not set up'

    A board made up of officials from DETI and the RHI scheme administrator Ofgem was to be set to keep an eye on the initiative, scrutinising and controlling its operation and cost.

    That was identified as a key way to keep a handle on the scheme, but it was never established.

    People in a meeting

    It's been suggested that critical problems were able to develop because the board wasn't in place to spot them and deal with them when they first arose.

    Mr Sterling accepts that it's "hard" for DETI to defend its actions in not setting the board up when it had been seen as an important way of dealing with scheme risks.

    "When things go wrong and you've taken that risk [of not setting up the board], it's hard to justify," he adds.

  7. 'Risks were not managed and followed-up'

    Mr Sterling says in his written evidence to the inquiry that risks associated with the RHI scheme were identified when the business case was being prepared, "but were not adequately managed and followed-up".

    He says now that, in spite of the risks having been identified there hadn't been "sufficient analysis of what was going on in the scheme".

    David Sterling

    Mr Sterling says DETI would've been looking to the initiative's administrators Ofgem to flag up concerns.

    "I think the significance of what Ofgem were reporting has not been recognised," he adds.

  8. 'Why wasn't DETI told about cash-for-ash leaflets?'

    "Joined-up government" is one of those popular political buzz phrases from recent decades.

    Sir Patrick asks about an instance where it seems to have failed in connection with the RHI scheme.

    Mr Sterling tells him he is now aware of events organised by Stormont's agriculture department, at which biomass boiler firms distributed leaflets advertising the scheme as "cash for ash" and "burn to earn".

    Burning wood pellets

    "Can you think of any reason why, on the basis of good inter-departmental relations, DETI should not have been informed [of that activity] by the Department of Agriculture?" the inquiry chair asks.

    Mr Sterling replies that if agriculture department officials were aware that a scheme "was operating in a clearly perverse way" then DETI should have been informed.

  9. 'Staff didn't apply sufficiently sceptical eye'

    Officials didn't apply a "sufficiently sceptical eye" to the RHI scheme, says Mr Sterling.

    A woman looking through a magnifying glass

    The concern drawn to DETI's attention bythe so-called whistleblower Janette O'Hagan, who said that scheme claimants were producing unnecessary heat simply to collect cash, should have been investigated, he adds.

    He says civil servants are being given training that will be equip them the necessary commercial awareness to work on and fully understand business-based projects.

  10. 'Staff should've stopped need for cost control'

    DETI has to accept some responsibility for the lack of tiering of subsidies in the RHI scheme, says Mr Sterling.

    An important method of controlling the cost of the scheme, tiering works by dropping the subsidy rate on offer once a certain limit of heat usage has been reached, with the intention of preventing a claimant from overusing their heating system to collect more cash.

    Wood pellets

    He says it should've been spotted by those who were involved setting up the scheme, and those who assessed and approved it in value-for-money terms, including the department's economist and the senior staff who sat on the internal scrutiny committee.

    He "trusted" those people and did not consider them to be "error-prone", saying some of them had "quite considerable experience in this type of work".

    Asked how many people missed the same error, he says people could maybe not have bene "questioning sufficiently".

  11. 'Five key reasons for the failure of RHI scheme'

    Back after lunch, Mr Scoffield is straight into it, asking the witness if the scheme represented value for money.

    "No, I don't think I could conclude that it did," Mr Sterling replies.

    He refers to the conclusions in the July 2016 report from the Northern Ireland Audit Office, in which the catastrophic failings in the scheme were firs laid bare, and again to the last month's report from National Audit Office on the Great Britain RHI scheme.


    So, what went wrong? Five key factors appear in Mr Sterling's evidence - they are:

    • the non-inclusion of tiering of subsidies at the start of the scheme
    • the lack of monitoring of risks and following them up
    • phase two cost proposals not being introduced
    • a failure to review the scheme as had been planned
    • the lack of appropriate attention given to warning signs

    "I think they remain the questions that need to be answered," Mr Sterling says.

  12. Time for lunch...

    A cup of tea

    The questions for Mr Sterling don't end there, so he'll be back in the inquiry hotseat after a sandwich and a cuppa tea.

  13. 'Lesson to be learned for staff with spending concerns'

    Matters move to the budget arrangement for the RHI scheme, which the inquiry has heard from numerous witness was "unconventional" and they hadn't encountered it before.

    The initiative was funded on a hybrid arrangement using capped annually managed expenditure (AME) funding.

    As part of that arrangement, the Treasury was to impose a monetary penalty of 5% if the budget for the scheme was exceeded.

    Sterling banknotes

    Some witnesses have accepted that they didn't fully understand it, and was not discussed by DETI's internal scrutiny, nor was it mentioned to the minister.

    A "lesson to be learned" for staff, says Mr Sterling, is that if they have concerns about overspending or underspending a budget they should "immediately seek advice from their department's finance experts.

    He adds that he doesn't understand why there were misunderstandings by staff about ho the funding arrangement worked.

  14. 'Did department feel that RHI was running itself?'

    Dr MacLean is concerned that once the new team working on the RHI scheme was in place there was a feeling that the project "is up and running - it's running itself".

    Mr Sterling says he can't remember the scheme being "flagged up as a particular issue or concern" in his discussions with Ms Hepper's successor, John Mills.

    Dr Keith MacLean

    Dr MacLean says there seems to have been a culture in DETI of "nobody was telling me".

    "If you weren't being positively told something then it meant it didn't exist," he suggests.

  15. 'We should've deferred move of key RHI staff member'

    A number of staff involved in the development of the RHI scheme moved on from DETI's energy division within a few months of each other.

    Energy boss Ms Hepper left in November 2013, while Mr Hutchinson (below) and Ms McCutcheon departed in spring 2014.

    Peter Hutchinson

    Mr Sterling says he agrees with his then subordinate Mr Thomson, who told the inquiry that it was "an incorrect decision" to have allowed that to happen.

    "It probably would have been sensible to defer Peter's move for a period of say three, maybe even six months just to allow continuity," he adds.

  16. 'I accept responsibility for light allocation of staff'

    Asked if two people were sufficient to oversee a project with the "novelty and complexity" of the RHI scheme, Mr Sterling accepts that it was an "extremely light allocation of resources".

    He admits that "we were taking a risk relying on such a small number of staff to do such a complex project".

    David Sterling

    "I would accept some personal responsibility for that."

    But he reiterates his point that he didn't see it as his position to know how many people were working in every division within his department.

    He explains that the Northern Ireland Civil Service was under huge financial pressure and had faced much deeper cuts than administrations elsewhere in the UK.

  17. 'Staffing figures given to assembly committee were misleading'

    In 2016, Mr Sterling told the Northern Ireland Assembly's Public Accounts Committee (PAC) that staffing levels had increased in DETI's energy division from 29 in March 2010 to 38 in June 2014.

    By June 2014, there were five staff working on the RHI scheme, he said.

    People looking at charts

    But there was, in fact, only one full-time and one part-time staff member working on the RHI scheme throughout much that time, and that figure had not increased.

    Mr Sterling accepts that the figures he gave to the PAC were "misleading" and he apologises for that.

    He explains that he had asked DETI for a staff breakdown and he misinterpreted what he was provided with.

  18. 'Critical to assign more staff scheme'

    Just two DETI staff - one working full-time and one part-time - developed the RHI scheme.

    They were Peter Hutchinson and Joanne McCutcheon, and they didn't have energy expertise.

    In contrast, 77 people were working on Great Britain's RHI scheme and some of them were specialists.

    Long shot of senate chamber

    Reading from the scheme's risk register from 2012, Mr Scoffield explains that it was assessed that there was a risk risk of inadequate resources - including staffing - to deliver the project.

    The action required to manage that risk includes providing extra resources and was described in the document as being "of high criticality" and must be "actioned immediately".

  19. Watch: Civil service boss admits cash-for-ash failures

    BBC News Northern Ireland

    Video content

    Video caption: Senior civil servants should have viewed the RHI scheme as an "unnecessary risk", says David Sterling
  20. 'We should've viewed RHI scheme as unnecessary risk'

    Mr Sterling admits that he should have seen that the RHI scheme was "an unnecessary risk", given the lack of resources his department had.

    DETI "didn't foresee the difficulties that were going to arise", and he accepts that there were shortcomings in what he believed to be robust controls within the department that he had relied upon.

    Burning wood pellets

    There was a responsibility on him, his second-in-command David Thomson and energy team boss Fiona Hepper to tell the minister Mrs Foster that the scheme shouldn't happen, he says.

    That's because they wouldn't have have been able to guarantee that it could be delivered "in a safe and secure way".

    But he adds: "There would've been resistance to that... and I'm not sure if we had made that case that it would've been accepted."