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Summary

  1. Design of botched scheme outlined to Renewable Heat Incentive Inquiry
  2. Civil service solicitor Nicola Wheeler and external energy lawyer Alan Bissett questioned
  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...

With a bit of extra time allowed this evening to bring Mr Bissett's evidence to an end, he won't have to make a return trip to the Senate chamber.

Carson's statue in the Stormont estate
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We'll be back at 09:45 tomorrow for the inquiry's first rendezvous with a politician.

The SDLP's Patsy McGlone chaired the Northern Ireland Assembly's Enterprise Committee when the RHI scheme was in its infancy, so be sure to join us for what should be an interesting session as he gives his evidence.

Goodnight!

What happened today at the RHI Inquiry?

BBC News Northern Ireland

Cost controls were taken out of the RHI scheme not once but twice, the inquiry heard.

The law firm Arthur Cox was hired to help DETI officials with draft regulations for the scheme and was told to mirror the rules around cost controls in the similar initiative in Great Britain.

Burning £20 notes
BBC

It provided regulations containing cost controls for the department, but when the plan was put to public consultation in the summer of 2011 there was no mention of cost measures.

Alan Bissett, a former partner at Arthur Cox, said he only found out several months ago that the regulations consulted on were not the ones provided by his firm.

'Why did DETI pay lawyers to find out DECC's work?'

In early-2013, DETI commissioned Arthur Cox to prepare a report reviewing consultations that had been carried out by DECC regarding cost controls.

"Really, what you were being asked to do was tell DETI what DECC were doing - why on earth were lawyers being paid to do that?" Mr Scoffield asks Mr Bissett.

£50 notes
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That "did seem odd", says Mr Bissett, who adds that he assumed relations between the two departments "were not good".

He says he would have thought DETI would have been "in a better position" to tell him what DECC was doing.

He says his team of solicitors contacted DECC but "they wouldn't speak to us".

'Why not use your expertise to push for cost controls?'

Inquiry chair Sir Patrick Coghlin asks why Mr Bissett didn't use his expertise to advise DETI on the inclusion of an interim cost control measure, given that the RHI scheme had a "volatility and unpredictability".

"Would that not have been an energy lawyer's response to that?" he asks.

Sir Patrick Coghlin
RHI Inquiry

Mr Bissett accepts the point but claims he was told by DETI that it was going to act on the cost control issue within "a relatively short period of time".

He says he was "surprised" by DETI's decision not to implement an emergency cost curb "because it was contrary to everything we'd been doing" in terms of mirroring the GB scheme.

'DETI wanted to skip emergency cost control step'

In September 2012, Mr Bissett saw the updated regulations for the Great Britain RHI scheme, which included a power for an emergency suspension of the scheme as a way of controlling its cost.

Arthur Cox had been instructed to mirror the GB regulations, so he drew DETI's attention to the new suspension power but didn't get a written response to the query.

A finger on an emergency stop button
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At a meeting with DETI, he was told that DECC's emergency suspension power was just an interim measure and DETI wanted to "skip the step" of including it in the NI RHI scheme until it saw DECC's long-term cost control method.

Mr Bissett says he believed that was a "plausible explanation" and he didn't press the issue further.

'DETI wanted to include parasitic process in RHI scheme'

DETI asked Arthur Cox to amend the regulations for the RHI scheme to allow the initiative to cover the use of biomass boilers to dry woodchip.

That, Mr Scoffield says, is described as a "parasitic operation", and was an issue Ofgem had raised.

Woodchip
BBC

Mr Bissett says he can't remember why DETI wanted the change to be made.

Ultimately, the change was scrapped by DETI because it was "too problematic because of timing", according to Mr Bissett, and he says he was told to reverse the changes.

'DETI's criticism of solicitors is unfair'

In its witness statement to the inquiry, Stormont's Department for the Economy (DEF) - formerly DETI - appears to be critical of Arthur Cox's role.

DFE says it could have "reasonably believed" that because it had notified Arthur Cox of points raised by Ofgem about the regulations that the firm would have "duly assessed and addressed the risks" posed by those issues.

Three men talking in a room
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Mr Bissett says he doesn't think that's fair and points out that DETI was following the route taken by DECC in the GB RHI scheme.

He says DETI was content to deal with the points raised by Ofgem in "subsequent amendments" to the scheme.

'Serious, critical issues could lead to fraud risk'

Mr Scoffield refers to the Ofgem legal review, which highlighted a number of series of issues arising from the regulations that "are serious, are critical, need to be addressed, could lead to perverse outcomes, could lead to fraud risk".

He asks Mr Bissett whether it occurred to him or his team at Arthur Cox to tell DETI to that it should "consider addressing" the points and that it "really it is an unacceptable risk" to proceed without doing so.

David Scoffield
RHI Inquiry

Mr Bissett says that the Department for Energy and Climate Change (DECC) had been given the same advice from Ofgem regarding the regulations for the GB RHI scheme.

"They did take on board some of them and they put them into the regulations that they enacted in November 2011," he says.

DETI's view, he adds, was that it was going to wait and see how DECC dealt with Ofgem's recommendations.

'NI is one year behind GB in legislation'

It's "not unusual" for legislation in Northern Ireland to "follow one year behind" what is being put in place in Great Britain, says Mr Bissett.

He says Stormont departments "do take the benefit of the larger scales" of UK government, which has much more resources and more specialist staff.

Alan Bissett
RHI Inquiry

"A lot of our legislation does just follow behind with some revisions for NI," he adds.

"That's not just across energy, that's across a lot of areas."

'Three sets of lawyers contributed to RHI rules'

Lawyers at DSO and the RHI scheme's administrators Ofgem were having a say in the regulatons for the initiative, as well as those at Arthur Cox, who were drafting them.

Mr Scoffield asks whether having three sets of lawyers involved was "assisting the process, or confusing the process".

A woman working on a laptop
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Arthur Cox says it "seems strange" when one looks at the scenario objectively, but the comments by DSO and Ofgem on the work were being "funnelled" through by DETI.

"It wasn't clear if they were comments coming from DETI, DSO or from Ofgem."

'DETI produced its own regulations without tariff tiering'

Mr Bissett says Arthur Cox handed its draft regulations to DETI in July 2011 - they included provision for tiered tariffs to control the cost of the scheme.

He says the regulations they supplied were not the ones that DETI attached to their consultation document on the scheme later that month.

A biomass boiler
BBC

The version that went out with the consultation did not include a reference to tiering.

"The draft regs that went out to consultation had those provisions removed, so DETI had produced its own draft, which it did on a number of occasions," Mr Bissett says.

He says he found it "very odd" that DETI was producing its own drafts.

'Legal work could've been done in-house'

Given that Arthur Cox solicitors had "no role" in the policy for the RHI scheme, Mr Scoffield (below) asks what "value" they added to the project for DETI.

He wonders whether DETI could've got the same service from Stormont's internal legal team at DSO.

David Scoffield QC
RHI Inquiry

Mr Bissett says DETI told his team that their work on the draft regulations would ultimately be signed off be DSO, and therefore it "didn't seem clear to me" why the work couldn't have been done by civil service solicitors.

"There is no reason why someone in DSO couldn't have done the role that we had," he says, but he adds that he didn't raise that point with DETI.

'Solicitors had no role in RHI policy'

Arthur Cox was told in May 2011 that DETI had two options on the table for the RHI scheme, according to Mr Bissett.

Those, as we know, were an up-front grants offer and an ongoing subsidy scheme, which was the one that was ultimately adopted.

People looking at charts
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Solicitors at Arthur Cox had energy expertise and worked with DETI in developing policy.

But Mr Bissett says that wasn't the case in relation to the RHI scheme - he says "no role" in the policy for the initiative.

New witness Alan Bissett before inquiry

This afternoon's witness is Alan Bissett, and he'll be questioned by the inquiry's senior counsel David Scoffield QC.

Mr Bissett was a partner in the law firm Arthur Cox, which had a role in drafting the regulations for the Northern Ireland RHI scheme. He has extensive experience in energy sector law.

Alan Bissett
RHI Inquiry

Arthur Cox was commissioned to provide legal advice on energy matters to DETI after a tender process in 2011, coming out on top ahead of two other firms, says Mr Bissett.

The first meeting between Arthur Cox and DETI took place in May 2011.

You'll find Mr Bissett's written witness statement to the inquiry here.

One year on from Stormont's collapse

BBC News Northern Ireland

What has happened since Stormont fell?

It's 12 months to the day since Stormont collapsed after Sinn Féin's Martin McGuinness resigned as deputy first minister, partly due to the RHI scandal that engulfed Northern Ireland politics.

So, what's happened since then? Let's have a look...

Time for lunch...

Mr Lunny completes his questioning of Ms Wheeler, saying that she hd no further involvement in the RHI scheme after November 2012.

"No, I'm glad to say," she tells the inquiry, prompting a few giggles.

With that, we'll take a break for lunch - join us again at 14:00 when Alan Bissett, formerly of Arthur Cox solicitors, will be answering questions.

'DETI's decision probably wouldn't have changed'

Ms Wheeler says the DSO's normal practice is to advise Stormont departments not to deviate from regulations in similar Great Britain projects unless there is a "very good reason to do so".

She says she would point out deviations but it is up to the department to decide on how to proceed.

Sir Patrick Coghlin
RHI Inquiry

Inquiry chair Sir Patrick Coghlin says it's clear from the evidence he's heard over the past couple of months that DETI had made a "clear and positive decision" that it would not include the power to halt the RHI scheme.

"Even had you raised it personally I find it difficult to see what difference would've been made" he adds.

'I didn't consult latest GB regulations'

Later in October 2012, Ms Wheeler was asked to consider a new draft set of regulations prepared by DETI in co-operation with Ofgem and Arthur Cox.

Those were originally based on the regulations from the Great Britain RHI scheme, and changes had been made to the GB rules in July 2012 to introduce a suspension mechanism that could control the cost of the scheme.

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Mr Lunny asks Ms Wheeler whether she had considered the most up-to-date version of the GB regulations in October.

"No, I now know that I didn't, so I regret that," she says, adding that she would normally have asked for the latest copy of the GB regulations.

"It would be normally something that I would pick up - I hope - but I didn't know that there was an amendment at that point."

'I didn't understand financial implications'

Mr Lunny points out that there was no "stop mechanism" included in the draft regulations to prevent the risk of DETI incurring liabilities after the funding for the RHI scheme had expired.

He asks the witness why that did not come to her notice.

Mr Lunny
RHI Inquiry

"I don't think I understood enough the financial implications of that," Ms Wheeler replies.

"I didn't engage enough at that time with the design to appreciate the financial implications," she adds.

'We took comfort from similarities with GB rules'

In October 2011, Ms Wheeler assessed the draft regulations for the RHI scheme and gave DETI her advice on them.

She advised some changes but clearly informed the department that she had "no expertise" to be able to check the technical detail of the RHI scheme.

A woman working with files
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She accepts that a lack of some technical definitions in the regulations allowed the scheme to be exploited but she reiterates that she didn't have the expertise that would've allowed her to spot that.

She says that she compared the regulations for the Northern Ireland RHI scheme with those of the Great Britain initiative and took comfort that they were identical - the GB rules also didn't provide some specific technical definitions.

"We're aware in GB that there's lots and lots of people working on things, so we would take comfort from that," she adds.

'I didn't think overly of solicitor firm's role'

Ms Wheeler became more involved in the RHI scheme in September to October 2011, when she considered the draft RHI provisions for DETI.

Mr Lunny asks her what her understanding was regarding the role of Arthur Cox.

Nicola Wheeler giving evidence
RHI Inquiry

"I just assumed that they were providing the advice on the energy aspects, the technical aspects of the scheme," she says.

"I didn't actually think overly of what they were doing - I just concentrated on my role, which I viewed as being more the legislative side of it."

'DSO did not have energy expertise'

Ms Wheeler was a solicitor in the DSO, which gave legal advice to Stormont departments.

Between May 2011 and October 2012 she dealt with a number of legal arrangements of the RHI scheme, including draft regulations and the arrangements between the Department for Enterprise Trade and Investment (DETI), which set up the scheme, and the administrators Ofgem.

A wide shot of the Stormont Senate chamber
RHI Inquiry

Mr Lunny explains why the legal firm Arthur Cox was engaged to assist DETI with the legal aspects of the RHI scheme.

"DSO advisory lacked the specialist energy legal knowledge and expertise to provide all of the advice that DETI were likely to require," he explains.

New witness Nicola Wheeler begins her evidence

Nicola Wheeler from the Departmental Solicitors Office (DSO) takes the oath to begin her evidence.

The DSO is the in-house legal service for Northern Ireland Executive departments and other non-departmental bodies.

Nicola Wheeler takes the oath
RHI Inquiry

The inquiry's junior counsel Donal Lunny runs through some of Ms Wheeler's written evidence and they agree certain clarifications she wishes to make.

The statement submitted to the inquiry from Ms Wheeler and Claire Archbold is available here.

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.

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

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

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. We are now a year on and Northern Ireland remains without a devolved administration.

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 wood pellets
BBC

That was because the subsidies on offer for renewable fuels were far greater than the cost of the fuels themselves.

As a result, the scheme racked up a projected overspend of hundreds of millions of pounds and the bill will have to be picked up by the Northern Ireland taxpayer.

RHI scheme - what was it?

The Renewable Heat Incentive scheme - or RHI for short - came to the fore of the Northern Ireland public's knowledge in autumn 2016.

Few people, if anyone, would have expected it to have the consequences it has done in the months that followed.

A biomass boiler
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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

Welcome along to our coverage of the Renewable Heat Incentive Inquiry from Stormont on this Tuesday morning.

Carson's statue in the Stormont Estate
BBC

Today we'll hear from Stormont's Departmental Solicitor's Office and the law firm that was tasked with drawing up the regulations of the RHI scheme.

Just worth noting that today marks a year since Sinn Féin's Martin McGuinness resigned as Northern Ireland's deputy first minister, in part due to the scandal surrounding the RHI scheme.