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RHI: Watchdog that exposed scheme still has 'significant concerns'

A row of biomass boilers in Co Fermanagh attracting subsidies under the Renewable Heat Incentive scheme
A row of biomass boilers in Co Fermanagh attracting subsidies under the Renewable Heat Incentive scheme A row of biomass boilers in Co Fermanagh attracting subsidies under the Renewable Heat Incentive scheme

THE financial watchdog that first exposed the scale of the RHI scandal says it still has concerns about "ongoing weaknesses" in Stormont's botched green-energy scheme.

A new report by the Northern Ireland Audit Office (NIAO) provides an update on its examination last year of the non-domestic Renewable Heat Incentive.

The 'cash for ash' controversy led to the collapse of the executive, a snap assembly election and political deadlock at Stormont.

In its latest report, NIAO said 10 boilers ran virtually round-the-clock – attracting subsidies worth at least £50,000 per machine.

Each burned wood for more than 21 hours a day last year, and were installed before November 2015 when the scheme was modified to cap subsidies and significantly reduce the taxpayer bill.

Comptroller and auditor general Kieran Donnelly said there are "ongoing weaknesses in controls in the non-domestic RHI scheme".

He added: "I continue to have significant concerns about the operation of this scheme and the serious systemic weaknesses in controls that have facilitated the possibility of funding that is at best not in line with the spirit of the scheme and at worst is fraudulent."

A public inquiry has been launched into RHI after it ran a projected £490m over budget amid claims of abuse – including a farmer allegedly heating an empty shed for profit.

The state-funded initiative was supposed to encourage the use of eco-friendly wood pellet boilers, but paid out more in subsidies than the cost of fuel.

Mr Donnelly's report said:

:: Of 1,687 boilers in the scheme before November 2015, 39 per cent are using them for more than half the available hours in a year – "more than 12 hours a day and seven days a week all year round" – with an RHI subsidy per boiler in 2016/17 of at least £28,000.

:: Ten are being used for 90 per cent or more of available hours, creating a subsidy per boiler of at least £50,000 in 2016/17.

:: There is a considerably different pattern of usage in the revised scheme after November 2015. Of the 251 installed and operating, 96 per cent were being used for 30 per cent or less of the hours in a year and only one used for more than 50 per cent.

:: Out of 2,128 boilers in the scheme, 1,419 were part of multiple installations at 437 single sites.

The auditor said: "I am concerned at the extent of the use of multiple boilers which allowed applicants to claim a considerably higher level of subsidy payments than would have been payable for installations with a single boiler of a more appropriate size."

The Department for the Economy (DfE) told NIAO it is exploring with its legal advisers the eligibility of some sites with multiple boilers.

The cost of RHI was originally intended to be met by HM Treasury, but last year alone the scheme overspent by £27 million, which had to be taken from the Stormont budget.

In 2016/17 the non-domestic RHI cost DfE £45 million, with £18 million provided through Treasury funding and £27 million from the executive.

DfE estimates the scheme will cost £24 million in 2017/18 compared to £52 million had action not been taken to control costs.

The cost to the Northern Ireland budget in 2017/18 is projected to fall to £2 million compared to around £30 million had the old rates continued to stand.

DfE had planned for 100 per cent site inspections, but has had difficulty identifying a firm to complete the work. Instead, a "pilot programme of inspections" in partnership with energy watchdog Ofgem will take place later this year.