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Summary

  1. Design of botched scheme outlined to Renewable Heat Incentive Inquiry
  2. DETI's former head of analytical services Shane Murphy faces further questions
  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 2017...

"That's Christmas!" says inquiry counsel Mr Aiken, drawing the RHI show to a close for 2017.

Snow on the slopes of the Stormot estate
Getty

And here's a date for your shiny new 2018 diary - the inquiry reconvenes on 8 January, so be sure to join us then.

Have a great Christmas and let's hope for snow on the slopes of Stormont - we're off to throw another log on the Yuletide fire!

RHI boilers owners lose payment cut case

Conor Macauley

BBC News NI Agriculture and Environment Correspondent

Away from the inquiry in the Senate chamber, a major development in the RHI scheme story...

Claimants on the scheme have lost their legal challenge to big cuts to their subsidy payments.

A biomass boiler
BBC

They’d taken Stormont's Department for Economy to court over tariff changes introduced in April that were designed to reduce the scheme's vast projected overspend.

The changes moved everyone who’d joined the scheme before November 2015 on to much less lucrative payments.

But a judge has ruled that the department had the powers to make the changes and that there was a “compelling public interest” for them, protecting Northern Ireland's budget from a potential £700m bill.

'Enjoy your return to happy retirement!'

Good news for Mr Angus - his session is at an end and he's told he's unlikely to have to return to face more questions.

Sir Patrick Coghlin
RHI Inquiry

Inquiry chair Sir Patrick Coghlin jokes with him: "You can return to that happy state of retirement that I once had the benefit of!"

Mr Angus says he's been following the proceedings online - (one of our many followers, perhaps? If so, glad to have you on board!) - and will continue to keep an eye on how the whole thing pans out.

'Was approval committee fit for purpose?'

Inquiry panellist Dame Una O'Brien asks Mr Angus if he thinks the casework committee was "fit for purpose" for its "kicking-of-the-tyres on the RHI project".

Dame Una O'Brien
RHI Inquiry

He defends the role of such committees as a "good backstop" before an already-well-developed policy is implemented.

"If you're steeped in it you do start to miss the obvious," he says.

'Was more expensive scheme viewed as better for NI?'

Inquiry panel member Dr Keith MacLean asks whether there was discussion by the casework committee that plumping for the scheme option that was hundreds of millions of pounds more expensive would be a "good thing" because it could be "beneficial for the Northern Ireland economy".

Burning wood pellets
BBC

Elaborating on that point, Mr Aiken suggests that it would be a "natural enough" view to take that "if we're being offered this money to spend in the Northern Ireland economy, why would you not?"

But Mr Angus says that civil servants "don't tend to think that way so much".

"The politicians, I think, would catch on to that, more likely."

'Not having admin budget can be showstopper'

It's been well documented over the past couple of days that DETI rejected a much cheaper up-front grants option for the RHI scheme because the admin costs were more expensive.

Going for the grants scheme could've saved the taxpayer a projected near-£330m over 20 years, but it was turned down to save £3.5m over an initial four years.

Philip Angus
RHI Inquiry

Mr Angus says that not having the budget to administer a scheme from the outset "is a bit of a showstopper".

Inquiry counsel Mr Aiken says it "might seem absurd to the public" for that to be the case when there are hundreds of millions of pounds that could have been saved otherwise.

'High subsidy rate wouldn't seem unnatural to me'

One of the key reasons why the RHI scheme went so badly wrong was that the tariff on offer was higher than the cost of the fuel used to power the biomass boilers that claimants installed through the initiative.

That flaw meant the scheme was wildly overgenerous, effectively giving beneficiaries an incentive to burn fuel, whether they needed to or not.

Sterling csh
Getty Images

The inquiry has heard that the figures detailing that error were clearly laid out in several papers but no-one seemed to pick up on it.

Mr Angus accepts that he missed it, too, but says his understanding was that the tariff was to subsidise fuel as well as covering the cost of a biomass boiler, hassle costs and provide a 12% rate of return.

"It wouldn't seem unnatural or strange to me that you would have quite a high tariff to claw those figures back," he says, or that it would be "set higher than the current fuel cost" for that reason.

'I never worried about embarrassing anyone'

Mr Angus says he sat on possibly as many as 20 casework committees during his time in the civil servant and "never felt under pressure if I embarrassed anybody" by rejecting a proposal that came before him.

Three men in a meeting
Getty Images

The committee is "quite a powerful" one and has the "authority to question seriously" projects it assesses and "make serious changes" to them.

He says he would've concentrated on the executive summaries and recommendations in papers that were submitted to him for the various projects that he assessed.

Ex-senior civil servant takes the hot seat

After a short break, the inquiry reconvenes with a new witness taking the oath.

Philip Angus is another former senior DETI staffer who was a member of the casework committee that assessed and approved the RHI scheme.

Philip Angus takes the oath
RHI Inquiry

We're told that Mr Angus retired just six weeks after the committee meeting with "38 years unblemished service".

We're due to finish at 13:00 so there won't be be a lot of time for his evidence today.

'Public spending odd to man on the street'

Inquiry panel member Dame Una O'Brien returns to the point that DETI turned down an option for the RHI scheme that was more than £300m cheaper than the one that was chosen, in part to make a short-term saving of £3.5m on admin costs.

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

Mr Murphy says such decisions "don't always make sense" but the rules around public spending sometimes require them to be made.

Sir Patrick Coghlin
RHI Inquiry

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

Inquiry chair Sir Patrick Coghlin says he is "fully aware of the complexities and bureaucracy of the way in which this organisation ran".

"The common sense approach would be: 'See if you can get a way around this because the saving is so much."

'Minutes changed to give softer position'

Mr Aiken is now deep into the minutes of the casework committee, of which there were 19 drafts.

The 16th version, sent to committee members for checking by DETI official Fiona Hepper, said that the committee "was content that the [up-front grants] fund option should not be pursued".

The minutes record that the committee deemed that the ongoing subsidy scheme "was the most appropriate method for incentivisation" for Northern Ireland's renewable heat market.

A document that reads: Strictly confidential
Getty Images

Casework committee member Philip Angus replies to Ms Hepper requesting that the reasons for rejecting the grants fund option should be made explicit when the business case for the scheme is sent to the Department of Finance.

Committee chair Trevor Cooper later has the minutes amended to read that the committee "accepted that the RHI was the most appropriate method of incentivisation" for Northern Ireland.

Mr Aiken describes this as "a softer, more caveated position" regarding the committee's view of the grants fund option.

'No evidence of challenge on unaffordable admin'

One of the most eyebrow-raising revelations from Mr Murphy's evidence yesterday was that one option for the RHI scheme that was hundreds of millions of pounds cheaper than the chosen model was rejected by DETI partly because it would have initially cost £3.5m more to administer.

The team presenting the RHI scheme to the casework committee effectively said the cheaper option couldn't be done because it was unaffordable in terms of admin.

People look at charts
Getty Images

Mr Aiken asks whether the casework committee, which assessed the options, made "any effort to see could the gap be bridged" or whether it just took that unaffordability suggestion at face value.

"I have no evidence to offer that there was," Mr Murphy says.

So, should there have been more challenge on trying to close the £3.5m gap in admin costs?

"Sitting here now, it's not an unreasonable view to take."

'Foster wouldn't have known of £200m extra cost'

The minutes from the casework committee meeting, at which the subsidy option was approved for the RHI scheme, also do not contain the crucial £200m cost difference figure.

Sterling banknotes
Getty Images

Mr Aiken suggests that when the scheme went to the then DETI minister Arlene Foster for the final rubber stamp, she wouldn't have been able to make an informed decision on the basis of what was recorded at the meeting.

He explains: "She wouldn't find from the minutes that an extra £200m of taxpayers was going to be committed to this."

Mr Murphy replies: "I appreciate and accept that, yes."

'No note that scheme was £200m dearer'

Mr Aiken wants to know why there is no note in Mr Murphy's notebook to say that the subsidy scheme "is £200m dearer".

At the time, it was understood that the subsidy scheme was that much more expensive than the alternative, the up-front grants fund - it later transpired that it was much more.

The RHI Inqiry in session
RHI Inquiry

Mr Murphy says he understood there was a big difference, and that was what prompted the line of questioning around the single major issue at the meeting.

"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," he says.

'Obvious question - why not pick cheaper scheme?'

We know that there were two main models options considered for the RHI scheme - one was an up-front grants fund, the other was the ongoing subsidy scheme that was ultimately selected.

A big question the inquiry is looking for an answer for is why the subsidy scheme was chosen when it cost hundreds of millions pounds more than the alternative.

Shane Murphy
RHI Inquiry

Mr Murphy was one of the senior DETI officials who was assessing the scheme for approval, and the inquiry takes a flick through one of his notebooks from 2012.

He had noted that the team working on the scheme hadn't explained why it was choosing the subsidy scheme over the other option, and he added: "DETI needs to spell out why."

He also wrote: "Obvious questions - why not a [grants] fund?"

'Let's get through this at brisk pace...'

Inquiry junior counsel Joseph Aiken gets business going at brisk pace - this is a half-day session and he has plenty to get through.

Joseph Aiken
RHI Inquiry

We're return to the meeting of the Department of Enterprise Trade and Investment's (DETI) casework committee in March 2012, when the merits of the RHI scheme proposals were assessed and approved.

That was a big feature of the evidence that Mr Murphy provided yesterday.

What happened yesterday at the RHI Inquiry?

BBC News Northern Ireland

The inquiry demanded to know why economists who signed off the RHI scheme did not consider an alternative which was hundreds of millions pounds cheaper.

There were two options at the outset - an up-front grants model and an ongoing subsidy offer that would run for over 20 years.

Burning £20 notes
BBC

The grant scheme was rejected because the administrative costs were £5m, while the subsidy scheme cost £1.5m.

The subsidy scheme was chosen, even though its total costs were more than £300m higher than the alternative.

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 concernand what was then a developing political crisis surrounding the scheme.

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

Sir Patrick Coghlin
Pacemaker

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

Public and political anger erupted when the scale of the overspend emerged.

The Democratic Unionist Party (DUP) leader Arlene Foster (below) had been the minister in charge of the Stormont department that set up the RHI scheme in 2012 and she faced calls in to stand down as Northern Ireland's first minister in December last year.

Arlene Foster
PA

She refused, 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.

By doing so, he brought about the collapse of the Northern Ireland Executive. Now, nearing a full year on from that, Northern Ireland remains without a devolved administration.

You can find much more detail on the RHI scheme in our need-to-know guide.

RHI scheme - the flaws

The budget of the RHI scheme ran out of control because of critical flaws in the way it was set up - the most recent estimate for the overspend was set at £700m, if permanent cost controls aren't introduced.

Wood pellets
BBC

Claimants could effectively earn more money the more fuel they burned because the subsidies on offer for renewable fuels were far greater than the cost of the fuels themselves.

The massive overspend 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 biomass 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

Stormont's Parliament Buildings was barely visible through the fog as we made our way up the hill this morning for the final day of the RHI Inquiry before Christmas.

Parliament Buildings at Stormont
BBC

Department for the Economy (DfE) economist Shane Murphy proved to was a compelling witness yesterday and we're due to hear more from him today.

Proceedings will kick-off shortly, and we'll have the a video stream and live text commentary to keep you informed.