Jason Beer QC Acts for Ofgem in Renewable Heat Incentive Inquiry
The Renewable Heat Incentive Inquiry has published its final report. The Inquiry was established by the Northern Ireland Assembly on 24th January 2017 to inquire into the Non-domestic Renewable Heat Incentive Scheme in Northern Ireland. The so-called cash-for-ash scandal brought down the last power-sharing Executive in Northern Ireland.
Jason Beer QC acted for the Office of Gas and Electricity Markets (“Ofgem”). He led Emily Neill, of Blackstone Chambers.
The renewable heat initiative (RHI) scheme was set up in 2012 as part of a UK-wide effort to encourage the use of renewable energy sources. The scheme paid businesses to switch from oil and gas to environmentally-friendly heating boilers. The boilers used wood pellets, but the subsidy payment was higher than the cost of the fuel, creating an incentive to use the boilers to generate income. The incentive was closed to new entrants in 2016 amid concerns about the potential cost.
Concerns included that the NI RHI scheme:
- was not designed to include any viable cost controls despite the clear indication in April 2011 that the scheme would not be funded without limit by Her Majesty’s Treasury;
- did not take the opportunity in 2013 to mirror the equivalent GB RHI scheme and introduce some cost control measures at that time;
- did not take account of changes to underlying costs since 2012 and therefore was overgenerous in incentivising renewable heat;
- could not be changed quickly when it became apparent that demand was rising quickly;
- was not approved by the Department of Finance and Personnel after April 2015, which resulted in irregular expenditure. If the need for this approval had been identified at the right time then it could have been the catalyst for a wider review of the scheme;
- had at least facilitated the possibility of payments that were, at best, not in line with the spirit of the scheme and, at worst, possibly obtained by fraud (though there was no prima facie evidence of fraud at that time);
- was not properly monitored and controlled by the Department, which solely relied on the work being done by Ofgem that administered the scheme; and
- did not identify the risks of overspending at an earlier stage, even though Annually Managed Expenditure allocations had been previously advised. This had led to an impact on the Northern Ireland block grant which was likely to be measured in hundreds of millions of pounds.
The report found the scheme was a "project too far" for the NI Executive and "should never have been adopted". However "corrupt or malicious activity was not the cause of what went wrong with the scheme".
Jason specialises in public inquiries, often acting for central government departments and other public authorities. The RHI Inquiry was the seventeenth such inquiry in which he has appeared.