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Summary

  1. First witness appears before inquiry into botched Renewable Heat Incentive scheme
  2. Civil servant Alison Clydesdale outlines role in scheme's early stages
  3. Inquiry set up after public concern over scheme's huge projected overspend
  4. Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
  5. Public evidence sessions expected to last until well into 2018

Live Reporting

By Robin Sheeran and Iain McDowell

All times stated are UK

That's all for now...

Proceedings come to a close, with darkness having long since descended on Stormont.

Parliament Buildings at Stormont
BBC

A slightly earlier start tomorrow than what was scheduled - the inquiry will begin its hearing at 10:00, so join us then.

Goodnight!

What happened today at the RHI Inquiry?

BBC News Northern Ireland

There appeared to be no evidence of a "senior hand" guiding the RHI scheme, said the inquiry chair Sir Patrick Coghlin (below).

Sir Patrick Coghlin
Pacemaker

It was complex with a big budget, he added, but there seemed to be no-one at senior level who tried to "get a grip" on it.

He was speaking as the first witness gave evidence to the inquiry at Stormont.

'Where was the overspend warning?'

Mr Aiken refers to a settlement letter of February 2010 from the Treasury to the Department for The Department of Energy & Climate Change (DECC), the government department that ran the RHI scheme in Great Britain.

It included a passage that said spending for the Renewable Heat Incentive will be budgeted through AME "but a condition of this treatment is that DECC will need to contribute towards any overspend".

The inquiry in session
RHI Inquiry

Mr Aiken explains that a similar settlement letter was sent to the Northern Ireland Executive regarding the Northern Ireland scheme but without the condition regarding overspend.

"Why is that warning given to DECC and not given to the Northern Ireland Executive?" he asks.

'Spending guidelines shouldn't be a revelation'

Mr Aiken quotes from Treasury guidelines aimed at tightening up on AME spending.

"Where the action or inaction of a department increases AME, they are assumed to fund the increases in AME by deductions in their DEL budgets."

Inquiry panel member Dame Una O'Brien asks Mr Aiken if the documents he is quoting from are publicly available on the Treasury website.

Dame Una O'Brien
RHI Inquiry

"They are, and many other websites besides," he replies.

"So this isn't a revelation that could not have been known about many years ago?" says Dame Una.

"It may be a revelation, but whether it should be a revelation is another matter," Mr Aiken replies.

'A yeti through the trees'

Now, here's where it all gets complicated - the funding of the RHI scheme in Northern Ireland - and we'll do our best to explain it in as simple terms as possible.

Mr Aiken will refer to AME a lot this afternoon - that is annually managed expenditure - basically money spent on demand-led projects.

A yeti
Getty Images

He says that finding an accurate definition of RHI scheme AME is a "bit like hunting for a yeti".

"Sometimes you think you see it through the trees and when you get there it is not to be found."

'Funding from government should be marked 'handle with care''

Junior counsel Joseph Aiken pops up to give a presentation on the funding aspects of the RHI scheme.

Mr Aiken says that all funding for the executive comes in the form of payments from the government.

He says it serves well to imagine this coming in two different boxes - "one stamped DEL (departmental expenditure limits) and the other stamped AME (annually managed expenditure)".

Mr Aiken
RHI Inquiry

Mr Aiken says new information has come from the Treasury, which suggests that the AME box "should always have come with a label bearing the warning: 'Fragile - handle with care'."

And he hints that some people may not have fully understood the funding sources: "Views about AME seem to range from seeing it as free money from London to recognising it as taxpayers' money in exactly the same way as any other pound to be found within the block grant."

'How could anyone have missed scheme's flaw?'

In Ms Clydesdale's witness statement she says that she first became aware of the RHI scheme's major flaw that led to its colossal projected overspend when she reviewed the 2012 business case for the project last year.

That flaw was that that the subsidy on offer exceeded the cost of the fuel used in boilers installed through the scheme.

Alison Clydesdale
RHI Inquiry

In her statement, she says there are two tables in the business case - one on one page, the other on the page that directly follows - that show that flaw.

Sir Patrick respectfully points out that Ms Clydesdale does not have a qualification in either economics or accountancy, and asks: "Can you think of any reason why a person with such qualifications, looking at the business case, would not have seen that?"

"No, I can't," she responds, and with that she can finally leave the witness chair.

'No-one tried to get a grip of RHI scheme'

Sir Patrick refers to the need for project management of the RHI scheme.

He asks: "If the permanent secretary, and I think now yourself, agree this was an obvious case for project management, I simply ask again, who was responsible?"

Files
Getty Images

He says there seems to be no sign of a senior official "who tried to get a grip of the way in which this scheme would be developed".

Sir Patrick adds: "I see no senior hand in this at all. I see it being left to people who were doing their best but at a lower level with a lack of communication and a lack of continuity."

'Strange that first-of-a-kind scheme was understaffed'

Inquiry chair Sir Patrick Coghlin (below) points out that the RHI scheme in Northern Ireland was one of "the first of its kind in Europe" and possibly the world.

He wonders, given the "highly technical" nature of the scheme and its "potential to be volatile", why responsibility for it was placed on just a handful of staff at DETI.

Sir Patrick Coghlin
RHI Inquiry

"Does that not seem somewhat strange?" he asks.

Ms Clydesdale says the department had to call on consultants for that very reason, but she acknowledges that DETI staff did not have expertise to challenge the conclusions provided by the consultants.

'Surprised cost controls weren't put in place'

Ms Clydesdale left DETI in 2011, before the RHI scheme was opened, but returned last year, by which time it had been renamed the Department for the Economy.

Inquiry panel member Dame Una O'Brien (below) asks her what she thought on her return about how the scheme had gone so badly wrong.

Dame Una O'Brien
RHI Inquiry

Ms Clydesdale says she was "surprised" that cost controls hadn't been included in the scheme at the beginning and that the business case for the project had been approved without them in place.

She says civil servants need to be more aware of the financial implications of potential mistakes in such schemes and more value needs to be placed on scrutiny processes.

'Never enough staff to do the work'

There "never seemed to be enough people to do the work" in DETI's energy division, which was running the RHI scheme, says Ms Clydesdale.

Staffing in the branch was a key concern that she had during her time at the department, especially as it was a "growing" area.

DETI logo
DETI

"There was always new things being added but never new staff," she adds.

She tells the inquiry that her post was a "very busy" one and she was never working solely on renewable heat: "I was working on about seven or eight other things at the same time."

Ms Clydesdale raised her concerns with senior staff, saying that a renewable heat scheme needed a specific branch, and that was done in May 2011.

'Concerns expressed about Ofgem ability'

The sitting resumes for the afternoon, and inquiry's senior counsel Mr Scoffield returns to questioning Ms Clydesdale, this time with regard to Ofgem, the administrators of the RHI scheme.

He refers to a submission from Ms Clydesdale to the then DETI minister Arlene Foster regarding a government seminar on the design and implementation of the Great Britain RHI scheme.

That was attended by staff from the DETI sustainable energy branch in the spring of 2010.

Mr Scoffield and Ms Clydesdale
RHI Inquiry

Mr Scoffield quotes from one of the issues arising: "There was widespread concern by those in attendance regarding the ability of both Ofgem and MCS to fulfill the roles that they have been tasked with."

He asks Ms Clydesdale if she can remember what the concerns about Ofgem were.

"I'm sorry, I can't," she replies, adding that the meeting was seven years ago and she cannot remember if she attended the seminar.

Time for lunch...

The day's first sessions runs beyond its scheduled 13:00 finish, and Mr Scoffield still has questions for Ms Clydesdale.

He asks if she can return for a further half-hour or so after lunch - she agrees and inquiry chair Sir Patrick Coghlin says the panel might also have some things to ask her after the break.

We'll return at about 14:10 for the afternoon session, with more from Ms Clydesdale and later from Department of Finance official Mike Brennan, so join us again then.

'Overspend penalty an unusual scenario'

An email exchange between Ms Clydesdale and Treasury official Jon Parker in April 2011 about the funding of a renewable heat scheme is next to be examined - this document has already appeared a few times in the inquiry.

She asked for clarity on whether any Northern Ireland incentive scheme would be funded for 20 years, and about what types of scheme the £25m allocated by the Treasury could be used for.

Treasury offices
Reuters

Mr Parker told her that installations funded within budget within the first four years of a scheme would be funded for the full 20-year span of the scheme, and also said that the funding had to be used for renewable heat but it was up to DETI to select the type of scheme.

He said the government was not footing any overspend - instead any overspend would need to be met by DETI in future years.

Ms Clydesdale explains that that was an unusual scenario in that there would be a "penalty" imposed in the case of an overspend.

'We didn't have powers for tariff-type scheme'

In order to set up a scheme specific to Northern Ireland, DETI needed to bring a legislative consent motion (LCM) to the Northern Ireland Assembly.

Mr Scoffield wants to know why DETI sought the LCM in February 2011 before officials had a chance to view the recommendations of the CEPA economic appraisal of a potential incentive scheme.

Ms Clydesdale says DETI had to "dovetail" into the Westminster timetable set aside for the Great Britain scheme.

Sir Patrick Coghlin
RHI Inquiry

Inquiry chair Sir Patrick intervenes to ask why DETI specifically sought enabling powers for an RHI scheme, saying: "There was no reason why you couldn't have made the LCM for generic powers.

"It didn't have to be RHI, it could have been challenge fund," he adds.

Ms Clydesdale says the department already had powers for a challenge fund, "but we didn't have powers in relation to an incentive-type mechanism".

'Energy industry lobbied for tariff scheme'

There were "stakeholder acceptability issues" with an up-front grant scheme option for the RHI scheme, according to a renewable heat initiative economic appraisal commissioned by DETI in 2011.

Burning wood pellets in a biomass boiler
BBC

The consultancy Cambridge Economic Policy Associates (CEPA) drew up the report, assessing several options for a heat scheme, and Mr Scoffield asks Ms Clydesdale what she understands by the stakeholder concern.

She believes that came about after some within the renewable energy industry "had been lobbying" for a tariff scheme, similar to what was operating in Great Britain.

'Tariff scheme supported 20 years of heat generation'

Ms Clydesdale explains part of the reasoning behind DETI's decision to opt for an continuing tariff initiative for the RHI scheme rather than a challenge fund, with up-front grants offered for the installation of heating equipment.

"In the short term, if there was just a challenge fund then once the funds ran out you would stop delivering any more installations of heat," she says.

Biomass boiler
BBC

She says that with a tariff scheme the generation of heat would have been "supported in generating heat for over 20 years".

And Ms Clydesdale adds that an EU energy target that prompted the concept of the RHI scheme was a generation target: "Generation is what was being measured, not the number of installations."

'Economists advised us to look at other options'

Mr Scoffield questions whether there was a "misunderstanding" within DETI about the funding arrangements for a renewable heat scheme.

He quotes the witness statement of DETI economist Sam Connolly, who said his understanding was that the Treasury's funding of £25m "could only be used for" a tariff-type scheme, not an up-front grant scheme.

A man looking at figurs on a screen
Getty Images

Ms Clydesdale says she disagrees with that, saying that DETI looked at a range of options for incentivising renewable heat, and it was actually the department's economists who advised that they should do that.

She adds that Mr Connolly was involved in meetings where the various options for a scheme were discussed.

'Trade body representative knowledgeable and helpful'

The then DETI minister Arlene Foster's special adviser Andrew Crawford asked for a trade body representative to sit on the steering group for a potential RHI scheme, says Mr Scoffield.

He outlines an email from Mr Crawford asking for John Martin of Biomass Energy Northern Ireland organisation to be added to the group.

Wood pellets
BBC

Ms Clydesdale is asked why he was put forward to join the panel, and she points out that the Aecom Pöyry report had "raised as a concern" the supply of biomass in Northern Ireland.

Mr Martin was "very knowledgeable" about the supply of biomass from a commercial position, and was therefore "helpful".

'Recommendation was removed from report'

Still looking at the Aecom Pöyry report, Mr Scoffield asks why a recommendation that DETI should review the up-and-running Great Britain RHI scheme before making a decision on its own initiative appears to have been removed.

Ms Clydesdale says her memory of the final report is that it was contained in the final report.

The RHI Inquiry
RHI Inquiry

Inquiry chair Sir Patrick Coghlin steps in to ask why, if it was a recommendation, it was taken out.

Ms Clydesdale reiterates her initial point that that particular recommendation, or one that was similar, was included in the final draft.

'Correcting inaccuracies in the report'

Mr Scoffield takes the witness through a number of emails from Aecom, the consultancy that drew up a report on a possible RHI scheme, to DETI in 2010 regarding their final paper.

In one of these, Andrew Turton of Aecom suggests that a meeting should be used to ensure that their recommendations should "fully reflect DETI's views".

Wides hot of the inquiry
RHI Inquiry

He puts it to Ms Clydesdale that to "a member of the public reading these emails it might be surprising the level of direction which it appears that the consultants are being given by the department".

Ms Clydesdale says much of this interaction is to do with "correcting the report, correcting inaccuracies in the report - cross-referencing the report in terms of tables and recommendations not matching".

'Significant intervention needed to meet heat target'

Ms Clydesdale settles back into her seat for her questioning by the senior counsel, which it's important to remember is inquisitorial in nature, not adverserial.

Her full written witness statement is available to read here on the inquiry's website.

Alison Clydesdale
RHI Inquiry

Ms Clydesdale outlines the details of the Aecom Pöyry report in 2010, which was a research paper commissioned by DETI into the potential for the development of renewable heat production in Northern Ireland.

It looked at whether a target of producing 10% of Northern Ireland's heat through renewable sources was possible - it determined that it would be, but to do so would need "significant government intervention", says Ms Clydesdale.

First witness is sworn in

The inquiry's senior counsel David Scoffield QC introduces the day's business, and says that there will have to be an extra session on 18 December to catch up on missed business from a couple of weeks ago.

Ms Clydesdale is sworn in
RHI Inquiry

The inquiry's first witness Alison Clydesdale is then sworn in.

Mr Scoffield explains that Ms Clydesdale worked at a senior level in the Energy Division at the Department of Enterprise, Trade and Investment (DETI) during the early years of the RHI scheme.

Inquiry set to hear from first witness

Conor Macauley

BBC News NI Agriculture and Environment Correspondent

What is the RHI Inquiry?

BBC News Northern Ireland

An independent inquiry into the RHI scandal was established in January by the then finance minister Máirtín Ó Muilleoir.

He ordered it in the wake of the huge public concern and what was then a developing political crisis surrounding the scheme.

Sir Patrick Coghlin
Pacemaker

The RHI Inquiry began three weeks ago and Sir Patrick Coghlin (above), a retired Court of Appeal judge, is its chair and has been given full control over how it will operate.

It will look at:

  • the design and introduction of the RHI scheme
  • the scheme's initial operation, administration, promotion and supervision
  • the introduction of revised subsidies and a usage cap for new scheme claimants in 2015
  • the scheme's closure

For more information on the RHI Inquiry, you can read our handy Q&A.

RHI scheme - the fallout

When the scale of the overspend emerged, public and political concern rocketed.

As the minister in charge of the Stormont department that set up the RHI scheme, the Democratic Unionist Party (DUP) leader Arlene Foster faced calls to resign from her role as Northern Ireland's first minister in December last year.

Martin McGuinness and Arlene Foster
PA

She resisted, and Sinn Féin's Martin McGuinness then quit as deputy first minister in protest at the DUP's handling of what had by then become a full-blown political crisis.

That move brought about the collapse of the Northern Ireland Executive, and as we near a year on from that Northern Ireland remains without a devolved administration.

If you want a bit more detail on the background to the scandal and the subsequent inquiry, here's our need-to-know guide on the RHI scheme.

RHI scheme - the flaws

There were critical flaws in the way the RHI scheme was set up that left it open to abuse and that later saw its budget spiral out of control.

Crucial cost curbs that existed in a similar scheme in Great Britain were not replicated and claimants could effectively earn more money the more fuel they burned.

A biomass boiler
Getty Images

That was because the subsidies on offer for renewable fuels were far greater than the cost of the fuels themselves - the scheme was later nicknamed "cash-for-ash" for that very reason.

As a result, the scheme racked up a huge projected overspend - £700m at the most recent estimate, if permanent cost controls are not introduced - and the bill will have to be picked up by the Northern Ireland taxpayer.

RHI scheme - what was it?

Need a quick refresher on the Renewable Heat Incentive (RHI) scheme? Well, we're here to help...

It came to the fore of the Northern Ireland public's knowledge in autumn last year - few people, if anyone, would have expected it to have the consequences it has done in the months that followed.

Burning wood pellets
BBC

It was set up by the Northern Ireland Executive in 2012, as a way of encouraging businesses to switch from using fossil fuels to renewable sources for generating their heat.

Those who signed up were offered financial incentives to buy new heating systems and the fuel to run them.

Good morning

It's a bright-but-chilly day up here at Stormont's Parliament Buildings.

Still no sign of a deal to restore power-sharing and get the Northern Ireland Assembly up and running again, but we're here for more of the RHI Inquiry.

Parliament Buildings at Stormont
AFP

It paused from the public evidence sessions last week after an opening fortnight of introductory statements.

Today we'll hear from the first witness - Department for the Economy (DfE) civil servant Alison Clydesdale - and we'll bring you live video and text commentary throughout the day.