Basic calculation on scheme’s cost ‘missed’

THE senior civil servant in charge of the failed Renewable Heat Incentive (RHI) has told the inquiry into the botched green energy scheme that led to the collapse of Stormont that her department had missed a basic calculation.

Fiona Hepper was head of the Department for Enterprise, Trade and Investment’s (Deti) energy division, which was responsible for implementing RHI.

She admitted yesterday her department had failed to calculate that the cost of biomass fuel was far less than the Government subsidies being offered to businesses to convert to green energy.

This left the scheme — later dubbed ‘cash for ash’ — open to abuse, as it meant participants could make a profit by burning more biomass than they needed to. The failure of RHI is predicted to cost the public purse at least £700m over 20 years.

The inquiry heard yesterday how Deti officials had accepted the predicted costs of RHI from financial consultants Cambridge Economic Policy Associates Ltd (CEPA). Ms Hepper said that at the time she did not think her department would have needed to “check basic arithmetic” from the work CEPA had been contracted for.

“We didn’t spot that stuff wasn’t adding up,” she said, adding: “I appreciate that doesn’t look too clever in terms of some of that arithmetic not working through, but we were so focused on: ‘Is the tariff right, how do we calculate it?’ that maybe we didn’t do some basic checks on their works.”

During yesterday’s evidence she also acknowledged that a £200m rise in the energy scheme’s cost was not brought to the attention of Arlene Fos- ter, the Enterprise Minister at the time.

Before the scheme officially began in November 2012, two options for funding it were considered: an ongoing subsidy and a single up-front payment. Two reports were produced by CEPA, the second of which showed the ongoing subsidy would have a significantly higher cost. Although the ongoing subsidy was eventually picked, Mrs Foster proceeded on the basis of the lower cost.

Ms Hepper told the inquiry she had “not specifically” made Mrs Foster aware of this when she received the CEPA report.

She went on to deny claims by CEPA that Deti didn’t pay it enough to do a thorough job.

“I would’ve preferred to have a piece of work that cost a bit more and was right,” she said. RHI was intended to mirror an existing scheme in England.

A crucial difference was a lack of cost controls, meaning users in Northern Ireland could claim subsidies indefinitely.

Ms Hepper said this had not been included in a 2012 CEPA report, and if it had Deti would have included it.

On Monday another former Deti civil servant, Peter Hutchinson, said the cost controls were omitted because of time pressures, as the measures would have required public consultation.

Ms Hepper denied this, saying a public consultation on the matter wouldn’t have been necessary.