Public were never told of better alternative to RHI, says civil servant

A CIVIL servant at the heart of the botched RHI scheme has claimed the public were never consulted on a better “value for money” scheme because of a preference to copy the existing scheme in the rest of the UK.

He also accepted that then DETI minister Arlene Foster should have been made aware of £200m cost differences between an upfront grant-based alternative in July 2011.

Peter Hutchinson told the inquiry yesterday there was a “natural tendency” within his department towards a subsidy scheme, so the alternative was not included in the consultation.

Mr Hutchinson said staff were determined to go ahead with the consultation on the subsidy version as it was the preferred option.

“It had gathered a degree of momentum,” he said.

“At the time I think it felt like a logical, rational decision.”

Mr Hutchinson also told the inquiry — which noted that a lot of conversations do not appear anywhere on paper — that he “thinks” there would have been a discussion concerning the risks involved with a grant scheme.

Mr Hutchinson insisted he was unaware in 2011 of the danger that RHI scheme claimants could be overcompensated.

“I had a false kind of understanding that if people were using it more they would be paying more for their fuel bills and that would be ‘netting off ’ the benefit of the subsidy in some regards,” he said.

Counsel to the inquiry Donal Lunny questioned why a Cambridge Economic Policy Associates (CEPA) report — which stated that an upfront grant scheme would be more flexible and cheaper — was ignored. Mr Hutchinson said it didn’t detail the potential impact.

The significant cost differences were also omitted from the business case for the RHI scheme, something the inquiry chair Sir Patrick Coghlin said he found “difficult to understand”.

“I don’t think there was any reason behind it,” Mr Hutchinson added.

Mr Hutchinson said once Mrs Arlene Foster endorsed a subsidy scheme which was backed by respondents in the consultation process, the idea gained more momentum.

He said an alternative scheme wasn’t considered the “right policy match” from that stage, despite emails from CEPA stating they were not willing to firmly recommend the subsidy scheme.

DETI issued a consultation document in July 2011 which stated that an ongoing subsidy scheme was preferred because it “offers the highest potential renewable heat output at the best value”.

But yesterday Mr Hutchinson agreed with Mr Lunny that it is “absolutely clear” from the final CEPA report that it didn’t.

Mr Hutchinson will return to give evidence when the inquiry reconvenes in the week before Christmas.