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Summary

  1. Renewable Heat Incentive Inquiry examining botched energy scheme
  2. Department of Finance official Emer Morelli appears before inquiry panel
  3. Inquiry set up after public concern over scheme's huge projected overspend
  4. Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
  5. Public evidence sessions expected to last into autumn 2018

Live Reporting

By Iain McDowell and Robin Sheeran

All times stated are UK

  1. That's all for today...

    The day draws to a close in the Senate chamber, even though there's still a lot to get through with Ms Morelli - she'll have to come back another time.

    The inquiry barrister Mr Aiken tells us that's his last action before the inquiry's summer break - we'll miss his train analogies - but he'll be back in the autumn.

    Stormont's Parliament Buildings

    Back here tomorrow from 09:45 for evidence from a new witness - DETI's deputy permanent secretary Chris Stewart will start into the first of two days before the inquiry.

    His statement has been published on the inquiry's website and it'll make for interesting evening reading.

    Anyway, it's long past time we got out into the heatwave!

  2. What happened today at the RHI Inquiry?

    BBC News NI

    Finance officials should have taken more care to establish how the budget of the RHI scheme worked, the inquiry was told.

    They were too "hands-off", accepting assurances from others when they should have done more to interrogate finances.

    The RHI Inquiry panel

    They failed to "join up the dots" because there was no handover process for staff taking up responsibility.

    Emer Morelli, a senior official in the Department of Finance, admitted assurances were taken "at face value".

  3. 'Misunderstandings compounded into more misunderstandings'

    In June 2015, DETI's finance director Trevor Cooper (below) met finance department officials to try to understand the RHI scheme's funding and plan the next steps.

    What should have been an opportunity to obtain greater clarity resulted in greater confusion - he and the finance came away with completely different ideas of what was agreed.

    Trevor Cooper

    Dame Una notes that the misunderstandings that were taken away from the meeting "get compounded into other misunderstandings".

    She asks the inevitable question: "Is there any single note of that meeting?"

    Mr Aiken says there isn't - hardly comes a surprise to anyone who's been following the inquiry.

  4. 'Clarity on funding should've been our priority'

    It appears that finance officials were "spending an inordinate amount of time" trying to understand how the RHI scheme worked before asking the necessary questions about its funding, accepts Ms Morelli.

    But she explains that they were trying to understand why spending on the scheme had ballooned to double its allocated budget.

    They were also attempting to work out if there was any justification for DETI to be given more money for the initiative.

    Emer Morelli

    "We were very firm in our position that we weren't looking for extra money for the scheme until we knew what the scheme was," she says.

    Sir Patrick tells her that an ordinary member of the public would look at her evidence and ask why her officials didn't just ask their colleagues in the finance department's CED.

    Ms Morelli admits that seeking "clarity" about the scheme's funding "should've been our number one priority".

  5. 'Took four months to ask colleagues for finance clarity'

    At the start of June 2014, the finance department became aware of the financial problems the RHI scheme was facing.

    Ms Morelli was told by DETI that while the scheme had a budget of £11.6m for 2015-16 it would actually need double that - just over £23m.

    The officials in her supply division within the finance department asked DETI to clarify the funding position for the scheme with the Department of Energy and Climate Change, which was running a similar energy initiative in Great Britain.

    A man using a calculator

    Mr Aiken asks why that was done, pointing out that the finance department had its own division - central expenditure division (CED) - which was "best placed" to provide an explanation.

    Ms Morelli says her officials didn't have a enough of an understanding of the scheme and they wanted to know what they were dealing with before they went to CED.

    The inquiry barrister says that CED is "within your own department" and he's trying to understand why Ms Morelli's officials felt they "wouldn't get help from your own department", adding: "The Holy Grail was down your corridor."

    It wasn't until four months later that her officials finally asked CED about the issue - she accepts that if that had been done earlier they would've found out what they needed to know.

  6. 'Shutters should've been down on RHI spending'

    Mr Aiken says he's going to turn to "a difficult issue" - the effect of some of the errors the inquiry's heard about so far today.

    The finance department's approval from the non-domestic scheme in 2012 was based on a number of conditions, including a condition that a review of the scheme should take place before 31 March 2015.

    If the review didn't happen, "in public spending terms the shutters are down", as Mr Aiken puts it.

    Wood pellets

    The non-domestic review hadn't happened, but the department didn't pick up on that that and went ahead to approve the business case for the domestic scheme in 2014.

    "You could have given a conditional approval to the domestic scheme conditional upon completion of a satisfactory review of the non-domestic scheme," says Sir Patrick.

    Ms Morelli accepts the point but Mr Aiken points out: "It's one thing to acknowledge all of the mistakes that have been acknowledged - it's the cumulative effect that they would have had."

  7. 'This has been long, difficult learning curve'

    Ms Morelli apologises to the inquiry for that fact that "clarity" about how the RHI scheme was funded has only dawned on Stormont's finance department "late in the day".

    That's meant it's had to provide follow-ups to its original statement to the inquiry to clarify the facts on some issues.

    The inquiry barrister Joseph Aiken tells her that the tone of her department's statements - some of which she has written - is "very different" since it first provided one in September last year, since new information has come to light.

    Emer Morelli

    That indicates a "reflective process" within the department about its responsibilities, which he says will be of benefit the inquiry.

    The inquiry chair Sir Patrick Coghlin says that the panel recognises that "this is a long and difficult learning curve" for some Stormont departments.

    He reassures Ms Morelli that she can't be criticised for having providing additional statements to the inquiry on the department's behalf - it's a matter of "appreciating, as time goes by, what becomes more and more relevant".

  8. 'RHI didn't have warning signs written all over it'

    The complexity of the RHI scheme has only been "truly appreciated in latter times" by Stormont finance officials, admits Ms Morelli.

    When DETI sent its business case for the domestic initiative to the finance department for scrutiny in 2014 it "didn't have warning signs all over it".

    She explains that programmes like the RHI scheme - with unusual funding mechanisms - are "relatively rare", with most of the department's work being on assessing capital projects.

    A biomass boiler

    But inquiry panellist Dame Una O'Brien says it's "hard to grasp why" the finance official who dealt with it were "insufficiently aware" of how different it was from the typical projects they would be assessing.

    She suggests that because it was an unusual project it should've been more carefully considered within the department.

    Ms Morelli admits that the complexity of the scheme and the necessity for cost controls "didn't jump out to the team at the time" and therefore "it wasn't prioritised".

  9. 'We rely on departments to be frank and transparent'

    The inquiry returns to the business case approval of 2014 for the domestic RHI scheme and the inconsistencies therein.

    Mr Aiken puts it to the witness that the finance department had to take degree of trust that the information contained in business cases was "accurate and full".

    Ms Morelli says that in the case of the RHI scheme the information in the business case was relied upon.

    Ms Morelli answers a question

    "There's no evidence to suggest that there was further information sought but then again there was no requirement on the [finance officials] looking at it to look for that evidence," she says.

    Mr Aiken asks what mechanism would be in place if such situation were to arise tomorrow.

    "We continue to rely on assurances from departments that they have completed the business case with all the available information in the most transparent and frank way," says Ms Morelli.

  10. What's happened so far today at the RHI Inquiry?

    BBC News NI

    The inquiry's back up and running after the lunch break but here's a quick summary of what we heard this morning...

    The RHI Inquiry

    Finance officials should have taken more care to establish how the budget of the RHI scheme worked, the inquiry was told.

    They were too "hands-off", accepting assurances from others when they should have done more to interrogate finances.

    They failed to "join up the dots" because there was no handover process for staff taking up responsibility.

    Emer Morelli, a senior official in the Department of Finance, admitted assurances were taken "at face value".

  11. Time for lunch...

    It's been a heavy opening session this week but an important one in understanding what finance officials knew - or didn't know - about the funding for the RHI scheme.

    The lunch break is upon us so join us again from 14:00.

  12. 'We didn't appreciate difficulty of RHI from the start'

    Finance officials did not "fully appreciated how novel and how difficult" the RHI scheme was "right from the get-go", Ms Morelli tells the inquiry.

    And her admission goes beyond that than that, when she puts this rhetorical question: "Should we have been more challenging and proactive in that space?

    Emer Morelli

    "It's obvious that we should have or the thing probably wouldn't have ended up as it is."

    The witness says her officials should not have been so quick to accept what they were being told by DETI, which proved to be inaccurate.

  13. 'Detail wasn't crawled over sufficiently by finance officials'

    The finance department official who handled the business case for the domestic RHI scheme raised a question regarding its affordability with DETI.

    DETI official Stuart Wightman, who has appeared before the inquiry several times, replied, attaching a number of documents, including vital communications between DETI and the Treasury, and the Department of Energy and Climate Change, which was running the Great Britain RHI scheme.

    The RHI Inquiry

    Referring to a particular paragraph, Mr Aiken puts it to Ms Morelli that someone from the finance department looking at those documents should've noticed inconsistencies.

    "Whether the detail in that paragraph was crawled over sufficiently - it's obvious now it wasn't because there are no further questions asked," the witness replies.

  14. 'Officials had to take on detective role'

    If proper civil service procedures for departments communicating with each other had been strictly adhered to there could've been a better understanding of the RHI scheme budget and its complexities.

    Ms Morelli says that if official correspondence had been exchanged between departments "we wouldn't be relying on officials at a relatively generalist grade conversing with each other".

    Sherlock Holmes

    Instead, with formal correspondence "the key people" in the finance department would've seen it and could've dealt with queries and misunderstandings about the scheme.

    She says that the lack of that meant officials had to take on a "detective role" to "piece together the various bits of information that really should've been quite straightforward" to find.

  15. 'Formal request could've led to funding clarity'

    DETI did not formally ask the finance department for clarity on the budget for its RHI scheme.

    Instead, a DETI official appears to have made a phonecall to make the query.

    Burnin wood pellets

    Ms Morelli says if that formal letter had been sent instead it may have allowed finance officials to investigate and to give clarity on what could be spent on the scheme.

    "It would've been another opportunity to bring this issue maybe to a wider audience in [the finance department]," she adds.

    Dame Una says: "These are really basic things," aren't they?

  16. 'How well did officials understand public finances?'

    Stormont finance department officials did not have had a "good understanding of the broad definitions of the public finances", suggests Mr Aiken.

    That, he adds, could be the "root of the misunderstanding" of how much funding would be available for the RHI scheme.

    A man using a calculator

    Looking at a covering letter that accompanied the business case for the domestic RHI scheme, which DETI sent to the Department of Finance in August 2014, he demonstrates that there are major inconsistencies concerning the financial arrangements within the letter.

    The inquiry counsel says that DETI had a responsibility to set out factually correct information in its business case but points out concerns about the finance department's ability to recognise and raise issues about the problems within the document.

  17. 'Need for good old-fashioned public administration'

    A lack of "old-fashioned public administration" is to blame for how the RHI scheme turned out the way it did, suggests Dame Una.

    "Record-keeping, linking things - the fundamental basis of what normal public administration should be."

    A person looking in a filing cabinet

    "Unfortunately, yes," agrees Ms Morelli.

    She explains that the finance department is trying to improve the process of how it deals with business cases.

    "I do fully, fully agree that we need stronger linkages between what we're doing and we are assessing and our records."

  18. 'No full understanding of domestic RHI scheme'

    Dame Una O'Brien

    Inquiry panel member Dame Una O'Brien (above) asks about the unusual mechanism for funding the RHI scheme.

    She asks if there was a relaxation on the finance department's part when it came to consider a scheme funded by demand-led mechanism where the Treasury carried the risk rather than directly from the budget given to Northern Ireland in its block grant?

    "In my view, no" says Ms Morelli, adding that she didn't think there was "a full understanding of what the domestic scheme was".

  19. 'Finance officials took everything at face value'

    Finance officials at Stormont took what they was being told by DETI about the scheme "at face value", admits Ms Morelli.

    And they "should have been more proactive" in establishing what the funding arrangements were for the RHI scheme.

    Emer Morelli

    The scheme had what's been described as a unique funding method, which many of the civil service witnesses to the inquiry have said they never encountered and didn't fully understand.

    Ms Morelli says officials at the Department of Finance were "more hands-off than we should've been" and instead "should've been hand-in-hand with DETI through this".

    "On first read it appeared to be not as novel and contentious as it turned out to be and that should not have happened."

  20. 'Blinding silence in consideration of schemes'

    Sir Patrick says the work to approve the domestic RHI scheme was "not a question of expertise - it's one of common sense".

    "It's one of trying to control a fundamental drive of bureaucratisation that seems to prevent anything being done from one department to another," he adds.

    A magnifying glass

    Ms Morelli says that her department accepts that the domestic RHI scheme was given approval without consideration of the non-domestic initiative: "We've conceded that we didn't do it."

    "I don't want to give the impression here today that the Department of Finance washed its hands of this issue," she adds.

    Sir Patrick says there is a "blinding silence" in the two scheme's having not been considered in the round.