Northern Ireland

RHI inquiry: Northern Ireland officials not told of restrictions

There are about 2,000 boilers accredited to the scheme
Image caption The inquiry was set up in response to public concern about the scheme's huge projected overspend

The Treasury did not tell officials in Northern Ireland about restrictions on Renewable Heat Incentive (RHI) scheme funding, an inquiry has been told.

The public inquiry was set up to investigate the circumstances surrounding the green energy initiative, after its costs spiralled.

It was told officials running the equivalent scheme in Great Britain were clearly told of the restrictions.

Those meant that any overspend would have to be met by department funding.

Junior counsel to the inquiry, Joseph Aiken, said the warning may have "slipped through the net".

He said when a letter setting out the amount available for an Northern Ireland RHI scheme was sent to the Northern Ireland Executive in October 2010, it did not contain the detail.

But an equivalent letter sent to the Department of Energy and Climate Change (DECC), which ran the Great Britain scheme, did.

It emerged that the DECC clearly understood the risks posed by the RHI scheme.

An official noted that spikes in applications could be "critically damaging" to its departmental budget.

Mr Aiken said the lack of warning by the Treasury may not have been a deliberate omission.

Image copyright RHI inquiry
Image caption Sir Patrick Coghlin is chairing the RHI Inquiry, which is expected to last for several months

"Nobody thought of communicating it, rather than a positive decision to say 'that's all a matter for them over there in Northern Ireland and we'll not tell them what we are doing here'," he said.

Inquiry chair Sir Patrick Coghlin said the Treasury had not directly addressed the question of whether it had passed the warnings to Northern Ireland.

He said if it had answered it "completely and straightforwardly", it would have simply said that it had not told Northern Ireland officials about its extensive communication with DECC around the funding formula.

He described the Treasury written evidence to the inquiry as "fairly opaque statements with big repercussions" for Northern Ireland.

Sir Patrick said because Treasury was a Great Britain department he could not compel it to attend to give evidence.

Mr Aiken said consideration might be given to requesting it to attend.

'Exposure'

Later, a senior official in Northern Ireland's Department of Finance said had he received the warning about the funding it would have "set off an alarm bell instantly".

Mike Brennan said his "primary concern" would have been to protect the departmental budget.

"That basically says there's an exposure there," he said.

Sir Patrick asked why, given that the funding had restrictions and was "completely novel", no-one in his department had checked with Treasury about the implications.

Mr Brennan said finance had taken comfort from the fact the permanent secretary in the Department of Enterprise Trade and Investment, as departmental accounting officer, had signed off on the scheme; that initial funding was limited to four years; and that there was meant to be a review of the scheme in 2014.

More on this story