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Summary

  1. Design of botched scheme outlined to Renewable Heat Incentive Inquiry
  2. Finance officials Bernie Brankin and Mike Brennan give evidence
  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 today...

Mr Aiken suggests, tongue-in-cheek, that he's brought today's evidence session in "under-budget" - a good half-hour ahead of the scheduled finishing time!

Sir Patrick winds things up and apologises to Mr Brennan for dragging him back in for additional questioning.

The empty Senate chamber
Press Eye

We'll be back tomorrow at 10:00 GMT with the usual inquiry cast, plus another key civil servant Fiona Hepper, who was head of DETI's energy division - she faces an entire day's questioning so join us then.

Have a great evening!

'Finance officials think they didn't do anything wrong'

According to Mr Aiken, all of the statements that the inquiry has examined so far from finance officials appear to say: "We didn't do anything wrong; we don't think we should have done anything differently; we see this as a problem that was over there in DETI."

Mr Aiken
RHI Inquiry

He asks if that is the position of the finance department.

Mr Brennan says it's possible for everyone to be doing their job properly but "cracks do appear".

'Later mistakes rooted in original confusion'

Confusion among Stormont officials right at the outset of the set-up of the scheme "set the template for what people then had to sort out" when the scheme's fatal flaws emerged in 2015, says Dame Una.

Dame Una O'Brien
RHI Inquiry

Issues that emerged later in the scheme's lifetime were "rooted" in that misunderstandings at the early stages.

"I think that would be a fair assessment," accepts Mr Brennan.

'Cocktail of flaws led to perfect storm of horror'

The RHI scheme became a "profound threat" to Northern Ireland's expenditure and the implications of overspending were "completely misunderstood, even in the Department of Finance", observes inquiry panel member Dame Una O'Brien.

Mr Brennan agrees with her view, saying that there was no awareness of the extent to which "what seemed like a small scheme could critically undermine" Norther Ireland's block grant from Westminster.

BBC weather graphic
BBC

He says misunderstanding of the funding arrangement and inexperience of running such a scheme led to a "cocktail for a perfect storm".

"Various things [went] wrong, but when you bring them together it created the horror that we've seen."

'Minuscule budget meant no sharp focus'

The absence "clear, explicit" instructions from the Treasury about the funding plan for the RHI scheme in Northern Ireland led Stormont officials to draw "inferences and conclusions" about how it would work, says Mr Brennan.

Boiler
BBC

The £25m originally set aside for the scheme over four years was a "minuscule" amount in terms of the overall amount of money the Treasury deals with, suggests Mr Aiken, and that may have meant it didn't received a sharp focus by officials.

Mr Brennan agrees, saying that the figure is small not just in Treasury terms but also in the picture of Northern Ireland's overall £80bn budget at the time.

'You just said Treasury direction didn't apply'

Mr Aiken puts it to Mr Brennan that the email from Treasury official Mr Parker had no standing regarding the Northern Ireland RHI scheme.

"Yes, the Jon Parker email sets out how the Treasury are going to deal with DECC (the Whitehall department that operated the GB RHI scheme)," he replies.

Sir Patrick Coghlin asks what Mr Brennan understood of the Northern Ireland scheme funding arrangement was with DETI.

Sir Patrick Coghlin
RHI Inquiry

He says he understood that if there was an overrun on the £25m budget there would be a penalty to DETI's budget the following year of 5%.

"That's the Parker email," says Sir Patrick, "I thought 30 seconds ago you said it didn't apply to Northern Ireland.

Mr Brennan says DFP never received a formal letter from Treasury to say that's how it would actually work.

'Finance officials didn't understand overspend consequences'

There appears to have been a basic misunderstanding among Stormont civil servants about the repercussions of an overspend in the RHI scheme, suggests Dr MacLean.

He says there is a "whole series of people" who, up until 2015-16 - the year in which the scheme accumulated much of its vast overspend - believed that the only problem if it went overbudget would be that there would be a 5% penalty to pay to the Treasury.

A man making calculations
Getty Images

He suggests that their view might've been: "It's not that much, we'll cope with it."

But he says there are other who understood the consequences correctly - that is, any overspend would have to come out of DETI's budget and there would also be the 5% penalty.

Mr Brennan accepts that he didn't realise the full impact of overspending until the 2015-16 financial year.

'The £1.8m looks relatively small to me'

Inquiry panel member Dr Keith MacLean has been looking at some of the spreadsheets concerning the RHI scheme and other projects that were funded in a similar way.

Dr Keith MacLean
RHI Inquiry

"It looks like there are other things that are being [carried over] and moved around and in that bigger picture the £1.8m is actually relatively small," he says.

"For me, at the moment it's not screaming out that this is really unusual because that's a small line amongst a dozen others, and its a tiny sum in comparison with the total," Dr MacLean adds.

'Unspent RHI funding carried over to next year'

Back to the chamber then, and to the carrying over of unspent funding in the first financial year - 2011-12 - of the RHI scheme.

A total of £2m had been set aside for DETI to used for the initiative in its first year but a low number of applications meant the vast majority of that money was not spent.

£10 notes
BBC

Typically, that unspent funding would then be lost to the department - in other words, it would have to hand it back to the finance department - but in this case it applied for the money to be carried over to the next year.

That request was approved, and the budget for the next financial year, which had been due to be £4m, was increased to £5.8m.

Second whistleblower raised RHI abuse concerns

Conor Macauley

BBC News NI Agriculture and Environment Correspondent

Away from the Senate chamber, it's emerged that another whistleblower raised concerns with officials running the RHI scheme about allegations of abuse.

The renewables company Solmatrix wrote to DETI to highlight problems about "unscrupulous beneficiaries", according to documents published by the inquiry.

The inquiry had heard that only Janette O'Hagan, who ran an energy business, had flagged such issues, but her concerns were ignored.

Burning wood pellets
BBC

Stormont's Department for the Economy - formerly DETI - says it has also examined other material that has added to its understanding of what went wrong.

It had seen new evidence that has caused concern that there had been a "conspiracy of silence" about the scheme's problems.

"Indeed, some of the evidence appears to go beyond even that description," it adds.

'Mr Brennan returns, but not for long'

Mike Brennan, the the head of the Department of Finance's central expenditure division, has returned to finish giving his evidence after the session had had before the inquiry last week.

Inquiry counsel Mr Aiken reassures him, and the rest of us, that his questioning will not take all afternoon.

Mike Brennan
RHI Inquiry

The session begins with questions on a subject touched on just before lunch.

It emerged that money not used in the first year of the RHI scheme first financial year was carried over to the following 12 months.

It had originally been understood by DETI officials at the time that any unspent money would have to be handed back to the Treasury.

Time for lunch...

Mr Aiken tells the panel that he's not finished with his questioning of Ms Brankin and she'll have to come back another day to finish giving her evidence.

Chicken salad sandwiches
Getty Images

That's hardly surprising since almost every single session appears to be overrunning its time slot.

We'll be back at 14:00 to hear from Department of Finance official Mike Brennan - join us then.

'Good reason needed for NI to deviate from GB schemes'

Grant and subsidy schemes in Great Britain are "normally copied to the letter of the law" when they are implemented in Norther Ireland, says Ms Brankin.

We know now that the Northern Ireland RHI scheme was missing crucial cost controls that were added to the Great Britain scheme, and it was those missing features that led to the scheme going vastly over its budget.

A man pointing at figures on a screen
Getty Images

Ms Brankin says there would not normally be a deviation from GB schemes because they are the "benchmark", and she adds: "If you were deviating from that you would need a very good reason."

She adds that her message to DETI had been that there needed to be budget controls in place in the RHI scheme.

'Concerns about overspend and underspend'

Ms Brankin says her concern about the budget for the RHI scheme was two-fold.

She didn't want an overspend, because that would result in a penalty, but she understood that if the budget was not spent the remainder would have to be given back.

Wide shot of the inquiry
RHI Inquiry

She says she made that point in an email to Alison Clydesdale, one of DETI's energy officials, who was working on the scheme.

She says she met Ms Clydesdale to beforehand to discuss the funding arrangement in detail because she saw it as significant: "I tried to make the email as clear as possible".

Mr Aiken points out that the inquiry has recently discovered that what Ms Brankin had feared in the case of an underspend did not actually happen - the money not used in the scheme's first year was carried over to the next year.

'I wouldn't have kept 30 years of notes'

The inquiry has found no documentary evidence of the conversation Ms Brankin had with Stuart Stevenson, says Mr Aiken.

She says she would have made notes of their conversation but she cannot remember as it happened too long ago.

Bernie Brankin
RHI Inquiry

Inquiry chair Sir Patrick Coghlin asks whether she kept her notebooks after her retirement in 2016.

"I have 30 years service so I wouldn't have kept them all," Ms Brankin says.

Ms Brankin says the relationship between DETI and DFP officials were good but it was "quite an informal" one and she adds: "I don't think you're going to find it documented in many cases."

'I needed advice on funding plan'

Mr Aiken asks Ms Brankin what her immediate reaction to Mr Parker's email was.

She says she had no experience of the arrangement that was outlined and she "would have needed to seek advice" - as a result, she sought clarification from Department of Finance and Personnel (DFP) officer Stuart Stevenson.

Mr Aiken asks a question
RHI Inquiry

Mr Stevenson, she says, advised that the £25m funding allocated to DETI for the RHI scheme over four years should be treated as a set pot of funding that shouldn't be exceeded because any overspend would fall on the department.

Typically, funding for a demand-led schemes - as the RHI was - was not considered in that way as they could be difficult to predict because the spend depends on what the uptake - the number of applications for the schemes - will be.

'Penalty to be imposed if there's an RHI overspend'

This morning has been heavy on technical detail, but Mr Aiken moves on to what's been a recurring piece of evidence in the inquiry so far.

It's an April 2011 email from Jon Parker, the joint head of the Treasury's energy branch, who told DETI how the RHI scheme in Great Britain worked.

He said the Treasury was not footing any overspend, and instead the Department of Energy & Climate Change (DECC), which set up the Great Britain scheme, would need to cover any overspend in future years.

Sterling banknotes
PA

Those rules would then be applied in Northern Ireland when its own scheme got up and running, he said - basically, that meant the money wasn't limitless and DETI would have to repay any overspend if the scheme went beyond its set budget.

Mr Parker also said there would effectively be a penalty imposed of about 5% in the case of an overspend.

The civil servants who have been questioned at the inquiry so far about this financial arrangement have all said they had never come across one like it before.

'Civil servants under pressure to meet deadlines'

Finance officials at DETI were working under "pressure" to meet "very tight" deadlines to get projects approved, says Ms Brankin.

A woman working at home at night
Getty Images

The nature of their work meant they were often "in the building until very late at night" and also did work at home in evenings, she adds.

"You needed to put the hours in to make sure the deadlines were met."

'DETI shouldn't have done scheme like RHI'

Mr Aiken refers to evidence given by Ms Brankin in a lengthy interview to the consultancy firm PwC, which was hired to carry out an internal investigation of the RHI scheme in 2015 after its major problems emerged.

In that evidence, Ms Brankin expressed the view that DETI "shouldn't really be doing schemes like the RHI".

Wide shot of the inquiry
RHI Inquiry

"Yes, that's my view, and it still is my view, Ms Brankin says.

She says she thought the expertise to deal with matters such as grant payments instead lay in "non-departmental public bodies" such as Invest NI, "which had the experience and the experts".

'Broad range of financial responsibilities'

Ms Brankin explains that her branch within DETI had financial responsibility over a broad range of issues, of which the RHI scheme was a small part.

She says casework notes on the scheme's early stages were not shared with her branch, but that would have been normal - instead, there was a specific casework branch that dealt with that.

Finance civil servant sworn in

Today's first witness, Bernie Brankin, is sworn in.

A long-serving civil servant, she was head of the finance branch within the finance division of DETI, and you can find her written witness statement to the inquiry on its website.

Bernie Brankin is sworn in
RHI Inquiry

Junior counsel Joseph Aiken runs through the Byzantine structure of DETI and its finance and energy divisions.

It appears we can look forward to a blizzard of internal emails in this witness session.

What happened yesterday at the RHI Inquiry?

BBC News Northern Ireland

The civil servant who effectively ran the RHI scheme on his own said no extra staff were made available to help, even though he flagged up the shortage as a critical risk.

The Senate chamber
Pacemaker

DETI official Peter Hutchinson worked on the scheme's set-up and raised his concerns, but nothing came of them.

The inquiry also heard that he had been nominated for bonuses because he had been working hard for log hours to set up the scheme.

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 last month 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.

Burning £20 notes
BBC

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 what the RHI scandal is all about? Here goes...

The Renewable Heat Incentive scheme - or RHI for short - came to the fore of the Northern Ireland public's knowledge in autumn last year... and the fallout from the scandal attached to it is still being felt in the region's politics today.

A biomas boiler
Getty Images

The scheme 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

Welcome to Stormont for another day on the red benches of the Senate chamber and more of our live video and text coverage of the RHI Inquiry.

A security guard at Stormont
Press Eye

We have two witnesses lined up for today - first up is Bernie Brankin, who was head of the Department of Enterptrise, Trade and Investment's (DETI) finance branch when the RHI scheme was being set up.

This afternoon we'll hear from Mike Brennan, an official from the Department of Finance, who appeared briefly last week.