Northern Ireland news

Inquiry questions RHI approval 'weirdness'

The botched Renewable Heat Incentive scheme will have an estimated overspend of £700m over 20 years

A SENIOR economist has questioned why the botched Renewable Heat Incentive (RHI) scheme was chosen over a grants-based option which would have cost around £300 million less to run.

Shane Murphy, an economist with the then Department of Enterprise now Department for the Economy, has been questioned over two days by the RHI public inquiry.

On Wednesday the inquiry heard that an alternative to RHI, known as the Challenge Fund, was rejected because it had higher administrative costs, even though its running costs were hundreds of millions of pounds cheaper.

Mr Murphy said yesterday civil service decisions "don't always make sense".

Referring to his 2012 notes on RHI, he said that the team working on the scheme had not explained why it was choosing the subsidy scheme over the other option and had added: "DETI (Department of Enterprise) needs to spell out why".

He attended a "casework committee" meeting where the RHI subsidy scheme was approved.

When asked why he had made no note to say that the RHI scheme was significantly more expensive, Mr Murphy replied: "Maybe because I knew it in my head, it was obvious to me, I didn't note it down anywhere, or that it wasn't noted in the minutes".

RHI, which aimed to encourage businesses to switch from fossil fuels to biomass or woodchip boilers, will have an estimated overspend of £700m over 20 years.

Mr Murphy accepted yesterday that then Enterprise minister Arlene Foster approved the RHI scheme without knowing it was the more expensive option.

When a lawyer for the inquiry pointed out that Mrs Foster would not have had the cost information from the minutes of the meeting, Mr Murphy replied: "I appreciate and accept that, yes."

Inquiry panel member Dame Una O'Brien questioned the decision to approve RHI over the Challenge Fund.

"Did you ever observe the apparent weirdness of it?" she asked.

Mr Murphy said: "We see these things so often that we no longer see them as odd as the man on the street".

Enjoy reading the Irish News?

Subscribe now to get full access

Northern Ireland news