Burned

by Sam McBride

  It was a blistering description of the need for urgent action. If Hughes claimed to have been unaware before now, that defence was no longer sustainable. Here was a plainspoken explanation of the problem. More than that, her emails contained beneath them the blunt messages she had sent the previous year, in which she had set out widespread abuse of RHI. But her pleas fell on deaf ears. Now Hughes did not bother to even reply. At this point, O’Hagan took the view that DETI simply was not interested in addressing the problems with RHI, even though it had been clearly and repeatedly made aware of them. It was not an unreasonable assumption to make. But just five hours after he had replied to O’Hagan’s initial email, Hughes sent another email – to the Treasury in London. Outside the Department of Finance, contact between officials in any Stormont department and the Treasury was rare – and largely against the rules – but for someone at Hughes’s relatively lowly grade it would have been exceedingly unusual.

  It was clear from his email that Hughes was doing so after having read a message which ought to have caused him alarm. The deputy principal grade civil servant had found Treasury official Jon Parker’s 2011 email in which he had warned DETI that RHI was not really being fully funded by the Treasury and set out how overspends would cost DETI. Now Hughes replied to Parker, asking for clarity around the funding. He noted that ‘uptake has been good and is increasing’. Parker had by then left the Treasury and the email was returned undelivered, so Hughes then turned to DECC, the Whitehall departmen trunning the GB scheme. Officials there put him in touch with a new Treasury contact but he refused to deal with it, advising Hughes that all contact should be through Stormont’s Department of Finance.

  A week after O’Hagan’s email, a note from DETI’s heads of branch meeting indicated the first flicker of concern about the shrinking RHI budget. It informed those present that uptake had ‘increased over the last few months’ and that ‘for budgetary control, consideration is now being given to including a tariff reduction in April 2017 for the biomass tariff’. But even the warning of increasing numbers did not jolt officials into considering how they would handle a sudden stampede. The proposal – and it was only being thought about, rather than decided, at this stage – was to cut the subsidy level in two years’ time. Not only was there no panic, but new promotional activity was being approved, with posters being produced to encourage more applications.

  Four days later, Hughes’s boss, Stuart Wightman, said to a colleague that the level of uptake ‘has increased significantly over the last few months and we’re expecting uptake to remain high with over 200 new applications for biomass heating systems from the poultry industry (linked to Moy Park’s expansion) expected over the coming 12 months’.

  In fleeting evidence of fiscal prudence, Wightman observed: ‘With RHI payments for accredited non-domestic heating installations committed for 20 years, it is important we manage our budget carefully.’ He calculated that RHI expenditure had risen to about £800,000 a month and was going up by about £60,000 each month. Using those figures, he calculated that there would be an annual bill of £14.28 million – but he was concerned that his figures might be conservative, given the looming applications from the farmers who supplied Moy Park. By then both Wightman and Hughes had spoken to Moy Park manager David Mark – a figure who was promoting RHI to the farmers contracted to supply the company’s abattoir with about five million chickens every week. Mark had informed Hughes that the company had 782 poultry sheds and at that point just 36% had converted to biomass. His expectation was that they would get 60% into the scheme by the end of the year as well as building 45 new poultry sheds in the same period, each of which would have a biomass boiler.

  After speaking to Wightman at the end of February, Mark emailed senior Moy Park figures to alert them to the commercial significance of what he had been told. He said that he had been informed that no changes to RHI were envisaged until October of that year and that the most lucrative tariff would be available to larger boilers, which would be ‘helpful’ to Moy Park. He warned his colleagues that Wightman had said that the October legislation would allow for the subsidy to be cut and said: ‘I think we have a firm basis for RHI investment going forward until at least October 2015 with a positive look forward after that.’

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  Given that it was Wightman, Hughes and Mills who were left running the scheme at the point where it ran out of control, assessing what they knew is crucial to judging their culpability for what happened. When the scandal began to erupt, Wightman initially claimed that he only recalled being given three pages of Peter Hutchinson’s detailed 14-page handover note – the document that set out key areas of concern with the scheme and highlighted O’Hagan’s emails. However, with the emergence of emails at the inquiry, he eventually accepted that he had been given the entire document when he arrived at DETI in summer 2014. He made the admission after the inquiry obtained an email, which showed that the document was emailed to him and he forwarded it to himself at that time – a year before the disastrous surge in applications.

  But Wightman said that he did not recall reading beyond the first three pages. The civil servant came under pressure from the inquiry to explain why he had not handed over to it the entire document when it was in his possession. He insisted that he had not sought to hide the material, despite having obtained it in full in 2016 for a second time when, in preparing for a Stormont Public Accounts Committee inquiry into RHI, he had found a paper copy. He initially only gave the inquiry three pages, something he said that he did consciously because he believed that he had only read three pages in 2014 – an illogical explanation because the inquiry required individuals to hand over all material in their possession relevant to RHI. Whether or not they had read it was irrelevant. Regardless of the reasons for his initial non-disclosure of the full document, on Wightman’s own evidence he never bothered to read the 14 pages – something that would have taken about 20 minutes – despite just having arrived in energy division with no energy expertise. Even without knowledge of the disaster that was to follow, that fact suggests a blasé approach to his role.

  When Wightman’s name first emerged publicly in early 2017, the author was contacted by someone who had observed his work in the Department for Regional Development (DRD) where he had been prior to joining DETI. Rodney McCune, who was special adviser to the DRD’s Ulster Unionist minister, but by 2017 had left politics and was a lawyer in Singapore, said that in his experience of Wightman ‘his self belief was not matched by his ability’. Wightman told the inquiry he was more focussed on the ‘divisional plan’ because it contained objectives that had his name against them: ‘Coming into a new job, obviously you want to impress as well, you’ve got things that have got your name against it. You know, that was my number one priority.’

  In Wightman’s defence, he was not being given the resources necessary to adequately monitor or develop a complex and novel scheme involving relatively new technologies. His own time was split between RHI and energy efficiency, while Hughes – and especially Mills, his boss – also had other responsibilities. That meant that in Northern Ireland there wasn’t a single full-time civil servant working on RHI. At the same time in Whitehall some 77 officials were working on the GB RHI. Some of that is explained by the scale of the larger scheme, but much of the work needed to be done regardless of its size.

  Mills was unhappy at the lack of staff being given to him to run what he had been led to believe was a ministerial priority. He felt ‘betrayed’ because he had been given the expectation that he would get additional staff to run the domestic scheme but then had not been given them. He said that his inability to even get two or three extra junior staff for the domestic scheme left him assuming that any further staffing request would be turned down. Speaking sardonically in his evidence to the inquiry in 2018, Mills said: ‘I mean, there are 30 people on RHI now and it’s closed. So there was [in 2015, when it was open] 2% of me, a third of Stuart Wightman and half of Seamus
on the non-domestic.’

  In an interview with consultants PwC – who were called in by DETI in 2016 to investigate what had happened but whose work was superseded by the public inquiry – Wightman said that he believed the funding was coming from London. Answering candidly – in a process where he did not expect the report to ever be made public – he said: ‘In spring 2015 if I had of known it was DEL [Stormont’s budget] we would have probably been jumping over backwards to try to get it turned off quicker.’ For his part, Hughes believed that there was effectively a bottomless pit of RHI money from London and that all DETI needed to do was to ‘ask for it from Treasury to be able to get it’. However, in autumn 2014, six months before it began to dawn on Wightman and Hughes that the budget might not be limitless, Wightman had emailed a colleague and attached a copy of the 2011 Treasury email warning that the scheme had a finite budget and overspends would be penalised. That is one of several pieces of evidence that question how much care they were taking over the 20-year spending commitments beginning on their watch.

  It is clear that by March at the latest Wightman was well aware of the problem. On 19 May 2015 Jeff Partridge, in DETI’s finance division, emailed Wightman and Hughes to draw attention to the 2011 Treasury email and advised that energy division ‘should take steps to curtail spending’ to ‘keep within the likely ceiling of £12.8m’ until there was further clarification. Wightman responded with the alarming news that ‘we’re already committed to an annual spend of £17m (an overspend of £4.2m) even if we were to close both schemes today’. But that alarm was tempered by his belief that the budget was not really a budget but merely an indicative figure for expected expenditure. Wightman told his colleague that ‘we should surely be making the case for more RHI AME money from HMT/DECC rather than curtailing the scheme’. But far from taking Partridge’s obvious advice to rein in the scheme in any limited ways available to them, energy division continued to promote RHI over coming months. Setting aside the political pressure, which was to come to delay cost controls, it is impossible to see any rational explanation for the lack of basic measures to discourage further installations after this point.

  With DETI’s finance division alarmed that the message was not getting through to Wightman, the issue was escalated to Bernie Brankin, a veteran finance official. She sent him a curt one-sentence email the following day: ‘Stuart, please stop entering into commitments immediately to ensure that monthly cumulative expenditure does not increase.’ That message ought to have prompted panic because energy division knew that there was no way to stop making payments – by choosing not to implement cost controls, they were at the mercy of the market. Whatever number of people installed boilers, they had to subsidise them for the unlimited heat which they produced over the next two decades.

  An hour later Wightman replied to his colleague to point out the reality – there was no means of doing what she was requesting. He told her that a decision to close RHI ‘will have to be taken by the minister rather than you or I’ and could only happen once there was absolute clarity about whether London or Stormont was paying the bill. He said that if it was clear that Stormont was paying the bill then it ‘might’ be necessary to close RHI. Then, in a section now farcical to read, Wightman cautioned that such a move would lead to problems so ‘cannot be taken lightly’. He added: ‘This will create a great deal of negative press and correspondence.’ The negative press from keeping open a scheme that was haemorrhaging taxpayers’ money did not seem to feature as a consideration in his thinking.

  However, at some level Wightman became convinced of the need to rein in the scheme. Within two days, he was referring in emails to a decision to introduce tiering from October of that year – some five months away at that stage. In his interview with PwC, Wightman initially claimed not to have been aware in spring 2015 of the threat to DETI’s budget. In fact, he claimed that this was not known until sometime between October and December of that year. But documentary evidence shows that he had been made aware of the issue by spring at the latest – and should have been aware of it from the previous year.

  On Saturday, 23 May – less than two months into the financial year – Wightman emailed senior Ofgem manager Teri Clifton to say that ‘due to the unprecedented increase in RHI applications over recent months it has become clear that we are currently overspent on our proposed budget this year’. He said that DETI was seeking clarity on its budget but that until that came ‘DETI requests that Ofgem queues all new applications for a period pending budget confirmation’. Such a request demonstrated Wightman’s lack of basic knowledge of the regulations which his own department had got the Assembly to pass to set up the scheme. A quick scan through the legislation would have shown that there was no emergency brake if the budget began to be threatened.

  The email caused consternation within Ofgem, which was not only alarmed at being asked to operate outside the law but was worried that if there was now no budget it might not be paid. By looking at the regulations, Ofgem’s lawyers immediately clarified that there was no power for it to fulfil DETI’s request. Four days later, during a teleconference between DETI and Ofgem, it was made clear to Stormont that its instruction was legally impossible. Just after the meeting Hughes emailed Ofgem to formally advise it to ‘disregard’ what his boss, Wightman, had asked.

  Despite his undeniable understanding at this point that the budget had been blown, cost controls would not implemented for another six and a half months. In late spring of 2015, as the department lurched deeper into crisis, things were chaotic in DETI with disagreement among officials as to the gravity of the situation and a belief among some of them that London was paying the bill – which they say made them act with less urgency. All the while, the biomass industry was picking up signals – and getting privately informed by some Stormont insiders – that the scheme was soon going to be less lucrative. Things were about to get much worse.

  CHAPTER 9

  OUT OF CONTROL

  Just as officials began to finally realise that the scheme was running out of control, Arlene Foster left the scene. The timing of her departure at a point where RHI was starting to fall apart appears to have been entirely coincidental. The DUP Health Minister, Jim Wells, had resigned suddenly after a backlash over controversial comments which linked child abuse and homosexual relationships, prompting a mini-reshuffle of the DUP’s ministerial team. The Finance Minister, Simon Hamilton, was on 11 May moved to replace Wells and Foster was promoted to replace Hamilton as Finance Minister – the most powerful ministerial post after the First and deputy First Ministers. It was both a reward for her loyalty to Peter Robinson, the DUP leader, over many difficult years, and a recognition of what was then believed to have been a successful period as DETI minister. It was also a move that placed Foster in prime position to succeed Robinson when he retired as DUP leader just six months later.

  Foster was replaced at DETI by Jonathan Bell, who until then had been junior minister to Robinson. Bell had demonstrated unique loyalty to the DUP leader, and his appointment ensured that no one less enthusiastic in their support for a leader who was regularly under internal pressure entered the DUP’s ministerial team. Foster was leaving at a point where RHI was about to envelop not only the department, but the entire Executive. From her point of view, the timing of her departure was fortuitous. As someone whose tenure in the department was of unprecedented length, and who had been responsible for the scheme from its inception, she left just weeks before the first ministerial submission setting out its impending implosion.

  And when Foster began to hear about the problems with RHI, she may have had reason to believe that although she had set up the scheme it might be difficult to detect her fingerprints at key stages in the scheme’s development. Under her tenure, record-keeping at DETI had been abysmal. On the one hand, the inability to produce documentation which conclusively proves the extent of the minister’s involvement in key decisions makes it harder to blame her for what went wrong. But,
as with the design of the scheme, Foster is now the victim of those shoddy practices within the department during her time at its helm. If she did act properly, the absence of key written records now leaves her in the position of only being able to ask the public to accept her word for swathes of what went on during her seven years in DETI.

  It is hard to believe that, in such a lengthy tenure, Foster was entirely ignorant of her officials routinely not minuting meetings in which she was a key participant. Andrew Crawford, who was at Foster’s side for her seven years at DETI, told the inquiry that during his entire time at the heart of Stormont he never once saw minutes of a meeting involving his minister. If that is true, it is astonishing. Ministers frequently have to chase officials about a decision that has not been implemented, or they find themselves in dispute about what was agreed in meetings. The spad or the private secretary would be the first individual to dig through paperwork to establish the recorded factual position. It is difficult to accept that not once in his lengthy Stormont career did Crawford have to go searching for such a record. He made his claim in the context of insisting that the DUP had never asked for inconvenient facts not to be written down in order to avoid them becoming public under the Freedom of Information Act (FoI) – a law which the DUP, a party which valued secrecy, hated.

  Crawford was asked if Foster’s private secretary should have been saying to him, or to the minister, that other officials were failing to send minutes of meetings with the minister, despite being obligated to do so by civil service rules. In a typically disjointed response, Crawford said: