Political news

Value for money at heart of RHI approval, inquiry told

Department of Finance economist Rachel McAfee gives evidence to the RHI inquiry
Picture by PA 

VALUE for money was at the heart of assessing the Renewable Heat Incentive (RHI) scheme, a public inquiry has been told.

Defending the approval of a business case for the botched green energy scheme, Rachel McAfee said she was satisfied with the level of scrutiny provided.

Ms McAfee, an economist at the Department of Finance and Personnel (DFP) economic approval branch, said: "I think that the level of scrutiny I would have given it would have been reasonable, fair and just."

She was questioned for more than two hours by counsel to the inquiry David Scoffield QC during an evidence session at Stormont's senate chamber.

"In terms of assessing the business case we are looking for value for money but it is based on the evidence presented at the time," Ms McAfee said.

The RHI scheme was designed to encourage green energy use by giving businesses a financial incentive to switch to using renewable energy sources.

However, concerns have since been raised that it was badly flawed and gave greatly inflated subsidies, meaning scheme users could actually benefit from needlessly burning energy.

It has been estimated that the scheme ran up an overspend of £700 million.

Ms McAfee explained that despite staff shortages, she spent several days examining a Department of Enterprise, Trade and Investment (DETI) request for £25m that was submitted in 2012.

She accepted the accuracy of budget assumptions and took "comfort" from the fact there would be a scheduled review after four years, the inquiry heard.

"In terms of my role and my scrutiny, when a business case would come to DoF or DFP as it was, I would have given a detailed scrutiny," Ms McAfee said.

"Clearly not as detailed as what would go on in a department that would be very close to the detail, but that's why I would seek the assurance from the department.

"DFP, or DoF as it is now, is very much the last point of scrutiny when it comes to looking at business cases."

Meanwhile, it also emerged that Treasury officials could be asked to explain why they did not tell civil servants in Northern Ireland about restrictions to RHI funding.

Although they cannot be compelled to participate in proceedings, they may be asked to attend to say what, if any, help was provided to those designing the architecture of the novel energy scheme.

The calls comes after a letter sent to the Department of Energy and Climate Change (DECC), which ran an equivalent initiative in Great Britain, in 2010 highlighted that any overspend would impact on the departmental budget and another DECC document told of "critically damaging" consequences of not imposing cost controls.

Similar warnings were left out of communications with the Northern Ireland departments, the inquiry heard.

Joseph Aiken, junior counsel, said the omission may not have been intentional.

"It may be something that just slipped through the net, nobody communicated it," the lawyer said.

In January Sinn Féin pulled out of power-sharing with the DUP citing concerns DUP leader Arlene Foster may have overseen some of the errors while she was minister for enterprise, trade and investment.

Ms Foster has denied any wrongdoing in the scandal.

The RHI inquiry began earlier this month and is expected to continue into the new year.

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