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Key fraud prevention measure that would have stopped RHI claimants installing multiple boilers `dropped off' regulator's list of potential risks

Gareth John, associate director for the Non-Domestic RHI scheme with energy regulator Ofgem, gave evidence yesterday

A KEY fraud prevention measure that would have stopped Renewable Heat Initiative (RHI) claimants installing multiple boilers to maximise payments "dropped off" energy regulator Ofgem's list of potential risks to the controversial scheme.

The potential for members of the public to `game' or exploit the scheme for maximum benefit was discussed at the RHI Inquiry yesterday.

It emerged that those drawing up the initiative were aware of a loophole that allowed claimants to install "multiple boilers to heat the same space" as one large unit.

As early as 2013, poultry sheds were identified in England as an area where this could be abused and safeguards suggested to guard against disproportionate costs.

Panel member Dame Una O'Brien pointed out it was "almost a word for word description of what materialised in Northern Ireland, you've even got a photograph of a building with doors and windows open".

Such abuse was key to RHI's catastrophic overspend of a projected hundreds of millions of pounds, with some claimants installing several smaller boilers instead of a single larger one to collect the higher subsidy.

However, a clause that would have protected the taxpayer from such overpayment disappeared from the official `Risk Register' and so was never implemented.

Inquiry chair Sir Patrick Coghlin said someone "removed what on the face of it was a perfectly effective way of dealing with multiple boilers and put in one that wasn't".

"No doubt we'll come across that genius at some stage," he observed dryly.

Gareth John, associate director for the Non-Domestic RHI scheme with energy regulator Ofgem, gave evidence yesterday.

He is administrator for the Great Britain and Northern Ireland schemes and was quizzed on how the north did not incorporate the same safeguards as the latter.

Ofgem's fraud prevention strategy included `tiering' for subsidies which would reduce the subsidy payable once a claimant had reached a threshold, making overuse economically unviable.

This was not included in Northern Ireland.

Mr John said he was aware in mid-2014 of a "looseness" in the regulations in the north, allowing claimants to collect more money than intended.

The Inquiry heard that the Department of Enterprise Trade and Investment (Deti) realised in May 2015 that the scheme was running over-budget and Stormont finance officials ordered it to "please stop entering into commitments immediately".

When that proved impossible, Deti asked Ofgem to "queue applications for a few weeks" until there was "clarity".

Mr John said he was concerned that about spending commitments, that Ofgem might be asked to operate "outside the legislation" and ultimately would not be paid for its work on the scheme.

"We can't just down tools," he wrote in an email.

A further Ofgem email noted Deti's decision to ensure "continuation of business as usual", with cost controls proposed for October that year.

In the meantime, funding approval from the Department of Finance had lapsed.

"I'm surprised that there's a fairly substantial risk developing here, that affects the payments for all of the accredited parties and future obligations, but you're not sure whether that was escalated further within the organisation," panel member Keith MacLean said.

Mr John said he discussed cost controls with Deti officials in April and October 2014 - although those civil servants have a different recollection and a detailed minute makes no mention of them.

They are also absent from an email from Mr John to colleagues listing the subjects discussed.

Dr MacLean asked why Ofgem did not check whether its fraud mitigation measures were working.

"If you're not monitoring that how on earth can that be a fraud prevention measure?" he said.

"We're seeing all the words here but there doesn't seem to be any follow-up."

Mr John admitted he did not know whether Deti received Ofgem's 2013 fraud prevention strategy.

The department was belatedly sent it in 2015 as part of an annex to another document.

The inquiry also heard that Mr John mocked efforts by the counter-fraud team to catch those misusing the scheme with a picture of a joke t-shirt saying `Keep Calm and Hide the Evidence'

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