‘Common sense’ assumption led to RHI cap omission, says consultant

A CONSULTANT has told an inquiry into the Renewable Heat Incentive scheme that his company did not mention the need for a cap on costs in the project’s plans because he assumed it would be “common sense” that one would be needed.

Mark Cockburn, director of consultancy firm Cambridge Economic Policy Associates which was involved in the setting up of the scheme, appeared as a witness before the inquiry into the botched energy project.

The inquiry began hearing evidence from witnesses this week, beginning with civil servants involved in the project.

Mr Cockburn was asked why documentation submitted from his company to the Department for Enterprise, Trade and Investnite ment (DETI) in 2011 did not contain any references to a need for a cap on costs in the RHI scheme.

He replied: “I thought it would have just been common sense that you’ve got a finite amount of money available and you commit it up to the point where there’s no more available.

“I think we were taking the assumption that we had from DETI about the amount of money that they had available. I can’t point to an email but our understanding was that that money was fi- and so some way of ensuring that there could be no overspending was inherent within it.”

In response, inquiry chairman Sir Patrick Coghlin said: “I find it strange to hear that in a novel, demand-led scheme, the experts who were advising had to make assumptions, why not ask what was the situation if they go over budget? Why make the assumption?”

Mr Cockburn said the documentation had not been intended to be an exhaustive or detailed study. He also revealed the consultancy organisation was paid £60,000 for its involvement in the project in 2011 and 2012.

Mr Cockburn defended the costs as reasonable for the amount of work the group did.

The inquiry was told the group produced two reports; an initial document in 2011 followed by an assessment of responses to the first document once it had been sent out for consultation.

This second and final report recommended subsidy tariffs which were higher than the cost of biomass fuel. This mismatch in costs appeared to be the flaw in the scheme as it gave people a financial incentive to burn fuel.

The RHI scheme is estimated to have cost over £500m due to errors in its design.

In January, Sinn Fein pulled out of power-sharing with the DUP in protest at how the scheme had been implemented while DUP leader Arlene Foster was DETI minister. Ms Foster has denied any wrongdoing in the scheme’s errors.

An inquiry was subsequently launched in a bid to understand why the error occurred. The inquiry began earlier this month and is due to continue hearing evidence into the new year.