Burned
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During two days of at points excruciating examination when Bell appeared before the inquiry, he was strikingly light on detail, demonstrating one of the weaknesses which his critics identified. On some of the points where he was most dogmatic, he was later proven to be wildly wrong. Repeatedly throughout his evidence he stated that he could not recall the precise details of what happened or that he did not have evidence to back up what he was alleging. In calling for a public inquiry, and in putting his career on the line to speak out in December 2016, Bell performed a major public service. But he was a casualty of the inquiry he had demanded, which again pointed to him not being a details man in that he genuinely appeared not to appreciate how exposed his position had been. By the time Foster left DETI, there was going to be a serious problem with RHI. But Bell’s own flaws exacerbated the scale of a problem, which had not been of his making.
CHAPTER 13
THE SPIKE
Few elements of the RHI story sum up Stormont’s rank dysfunctionality better than the fact that as one arm of the devolved government was attempting to bring under control a scheme which was bleeding money, another was urging people to join the scheme.
In real-life scenes, which were like something out of the political comedy The Thick of It, while DETI was ploddingly working towards the introduction of basic control on RHI spending, the Department of Agriculture was advertising the scheme. Right up until October 2015 – six months after DETI knew RHI was in trouble and four months after it knew that all additional spend was irregular – agriculture officials were pushing RHI to farmers. During the life of the scheme, the Department of Agriculture’s educational arm included information about RHI at 58 farmer training events attended by 2,358 people. At some of these, boiler installers were present and selling their wares. Both the private firms and the department were promoting the lucrative nature of the scheme, highlighting factors such as the cost of fuel and the short payback time on investment. When payments on the scheme were later retrospectively slashed, many of those farmers were livid that they had been urged by Stormont to enter the scheme and taken on huge loans only to find the government reneging on its promises.
In evidence of the incoherent nature of the Stormont Executive, the Department of Agriculture was not the only wing of government promoting cash for ash in this period. Even more remarkably, a body for which DETI was itself responsible was more explicitly encouraging potential claimants to beat the deadline for the end of ‘burn to earn’. Invest NI, the quango to which much of DETI’s budget was allocated, was continuing to advertise RHI. Invest NI technical adviser, John Batch, emailed a company on 21 August 2015 to advise about the need to have a biomass heating system installed ‘as soon as possible and hopefully before any changes to RHI are brought into effect by DETI’. Batch said that he had become aware of the looming changes – which at this point had not been publicised – from industry. By this stage, Batch was clearly aware of the RHI riches on offer. Seven months earlier, in response to a heating expert who was attempting to draw his attention to some of the problems with RHI, Batch had said: ‘As you know sometime [sic] the hotels just see the cash cow called pellets!!’
No one in Invest NI thought to alert their parent department of the problem with a scheme that was so wildly lucrative they were being told that it was leading to firms artificially bending their heat needs to secure the highest subsidy. By contrast, when in October the scheme was about to be made far less generous, Batch emailed Seamus Hughes to pass on a suggestion that RHI was now not lucrative enough to encourage people to install biomass boilers – a suggestion based on a misunderstanding of the changes. But, remarkably, Hughes, the official who spent more of his time working on RHI than anyone else in Stormont, was continuing to promote it while simultaneously trying to rein it in. Hughes said that he gave a presentation on RHI at an event on 29 October – less than three weeks before tiering was implemented – at Greenmount Agricultural College. His presentation included an overview of how the scheme was going to be changed the following month. Hughes and another official also attended an event in Hillsborough on 8 September, to give a presentation ‘targeted mainly at a farming audience’. Despite having been promoting the scheme in this way, Hughes would later say to the inquiry that there was an ‘unexpected spike’ in applications. Even in the story of RHI, the fact that one civil servant was attempting to cut RHI spending while at the same time encouraging spending on the scheme is uniquely farcical.
Part of Hughes’s defence is ignorance. He said that DETI believed that it could take 6 to 12 months for a biomass boiler to be installed because that was what he had been told by the UFU. In fact, boilers could be installed in about a fortnight. But even the ignorance defence is difficult for DETI’s officials to sustain. They had received multiple warnings that applications would increase sharply ahead of attempts to make the scheme less lucrative. Aside from that being common sense, it was what had happened each time GB had cut its RHI tariffs and by this stage was well understood to anyone with anything more than a basic understanding of how RHI worked.
We know that DETI understood the inevitability of a spike in applications because it was mentioned by officials several times. On 6 July – more than four months before the scheme was changed – Hughes told Ofgem that ‘the industry here is now becoming aware that changes are afoot’. Inexplicably, he claimed that ‘none of the detail is out there yet’ – despite the detailed briefings by himself and Wightman to individuals in the industry – but said ‘it is likely that Ofgem may see an increase in application volumes over the next while’. Several DETI officials later said that they had known there would be a spike, yet had expected it to be modest. But even if the spike in applications was much less than what materialised, it was going to be a significant cost to the taxpayer. With an apparent lack of self-awareness, Hughes later said that the spike may in part have been ‘due to the industry being in a strong position to respond to demand’. Part of the reason that the industry was in a strong position to respond to demand was that the department had for months been leaking like a sieve. Now the deluge was to come.
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Before officials had even brought a formal submission to their minister to outline the problem, word was abroad that it was soon likely to be made less rewarding. In the Ulster Farmers’ Union’s (UFU) Antrim Road headquarters in Belfast, policy officer Elliott Bell overheard his colleague, Chris Osborne, talking about RHI on 7 July. He immediately emailed him to ask: ‘Have you any info on if or when the RHI might be cut for NI?’ The UFU man was upfront about why he was asking: ‘Currently planning installation of a boiler and want to get in quick before they make changes!’ Less than a month later, Osborne emailed Hughes with a somewhat contradictory message. On the one hand, he was lobbying for a ‘grace period’ for farmers to enter the uncapped scheme if they were in the process of installing boilers. But in the same email he warned Hughes: ‘The reason for my email as well is that the rumour mill is starting again from the poultry guys and the UFU would have concerns about any “run” which might occur created by the advent of any grace period.’ The surge into the scheme was now so obvious that even the UFU – the body representing the majority of those applying – was warning the department to be careful.
From early summer, it became increasingly clear to officials that information about their thinking was leaking out of the department. From at least June, phone calls were coming in to to ask when tiering was coming. John Mills said that by mid-2015 he ‘assumed the leak came from the political side … meaning the spads’, based on past experience. The problem became so great that by February 2016, as Stormont moved to shut RHI completely, Mills said that those with a commercial interest in the subsidy seemed to know more about what was to happen than the officials running the scheme. Mills said that throughout the final months of the scheme ‘advance knowledge becoming swiftly available to outside interests continued to be a feature of policy development on the RHI until its cl
osure’, as well as in another green electricity subsidy where commercially sensitive changes were also being made.
Regardless of whether Mills’s cynical instincts about the DUP spads were correct, there was a far more obvious leak – and it was right under his nose. Wightman and Hughes, who were directly beneath Mills in the DETI hierarchy, had been openly discussing the upcoming changes with multiple industry figures. Wightman and Hughes said that they saw their engagement with industry as part of the attempt to expedite the changes, viewing a faster informal consultation as mitigation for the absence of a public consultation on the changes, something which could have been legally challenged. It may also have been the case that past pressure on them to increase uptake had contributed to a freer discourse with commercial interests. After all, the only pressure which ever seemed to come down to them from Foster and Crawford had been to increase RHI applications, while there was never any pressure to implement cost controls.
However, the suggestion from Mills is that DETI had a policy of being as open as possible with industry and that contact with a major player such as Moy Park ‘was common across the field on renewable policy’. Even by the time of the inquiry, Mills still maintained that his officials’ contact with Moy Park where they discussed the possibility of tiering or a cap on usage ‘would be common in developing proposals … I do not regard this type of interaction as premature’. Without any clear direction from Mills as to being cautious not to give companies information, which they could use to exacerbate DETI’s problem, Wightman and Hughes seem to have been incapable of coming to the conclusion themselves.
On 19 June, Hughes met Terence McCracken from green energy company Innasol and gave him a detailed overview of the looming cuts. In an email to colleagues three days later, the businessman said that there had been so much ‘open dialogue from the official’ that ‘I was taking notes furiously’. Despite the budgetary crisis, Hughes told him that the scheme was a ‘great success’. McCracken came out of the meeting clear that there would be ‘a rush to get measures through before the rebanding [subsidy cut]’, which would mean a ‘short term opportunity for volume [sales] probably up to Nov 15’.
Less than a fortnight later, Wightman updated Fergal Hegarty at Alternative Heat, a major boiler installer in County Down, about what was to happen. Hegarty was a crucial conduit in a bush telegraph within the renewable heat industry where information was being passed around – sometimes originating with him and being disseminated outwards, or sometimes a snippet of information would emerge elsewhere and come to him for circulation. After giving Hegarty far more information than had been given to the minister at that stage, Wightman told Hegarty that he could phone him weekly for an update.
Another key artery for information was Balcas, Northern Ireland’s dominant wood pellet company, which was based in Fermanagh. On 1 July, Balcas manager Paula Keelagher updated industry contacts on a conversation which Wightman had with Hegarty. Her email contained detailed information about what was going to happen, including the October date for tiering. She said that Wightman had been open about the fact that in the last seven or eight months DETI had ‘overspent on their budget and the reason for this is the operating hours of the boilers in the poultry sector’. Despite being aware of the budget having been exceeded, the Balcas manager then explicitly encouraged entry into the scheme before it was made less profitable: ‘This change will only affect new applications after the change comes into force so if any of your clients are considering installing biomass systems we would advise they should move asap to avoid missing out on the best rates from RHI, especially sub 100kW installations.’ Balcas later said that the information was never presented to it as confidential.
Later that month, a sales executive in DCI Energy emailed a colleague, forwarding another email from someone, whose name had been removed, who said they had been in a two-hour meeting with Wightman and Hughes. The length of the meeting is striking, given that Wightman and Hughes would tell the inquiry that they were overworked. The email detailed the level at which the cap would be set and the tariffs for each tier, as well as making clear that the ‘implementation date mentioned several times was 5th October. This could slip to end of October depending on how long it take [sic] the minister to approve …’ It said that a grace period was unlikely because it would ‘just leave RHI open to further exploitation (poultry sector)’. Then, in an indication of the individual’s confidence that they would be able to obtain future inside information before it was made public – the email added: ‘Will let you know when DETI make final confirmation, I should know before public announcement.’
In July, Hegarty actually told Hughes in an email that he was going to spread the news around the industry. In the same email, he admitted the changes were necessary because ‘the poultry market was exploiting the scheme’. In early September an email from Connel McMullan, managing director of Alternative Heat and Hegarty’s boss, showed that in a briefing with Wightman he had been given detailed information about changes that would not yet be public for several days. In a comment, which suggests he was aware of extreme use of boilers, he said of the coming changes: ‘In short the paybacks still work fine but obviously are not just as lucrative as they have been to date with 99kw boilers running for 6 & 7,000 hrs!!!’ A boiler running 7,000 hours equates to the heat being used for 80% of the year. When McMullan came before the inquiry he said he had no knowledge of the scheme being abused other than rumours and claimed that his comment about boilers running for up to 7,000 hours a year was ‘a joke, basically’.
But while McMullan came before the inquiry, Hegarty did not – because he had left the country. On the day that McMullan appeared before Sir Patrick Coghlin in October 2018, the inquiry was told that Hegarty had left Northern Ireland about a year earlier, around the time that the inquiry was beginning to hear from its first witnesses. By the stage of McMullan’s appearance, the potentially important witness was on the other side of the world in Australia and was not planning to return until after the inquiry’s hearings were complete at the end of 2018. That day senior counsel to the inquiry David Scoffield QC told Coghlin that it had not even been possible to obtain a written statement from Hegarty despite attempting to contact him through McMullan’s company. Scoffield said that Hegarty ‘would have been someone that the inquiry was interested in getting evidence from’. McMullan said that he was on ‘a sabbatical’ to travel the world. Scoffield asked: ‘Was his sabbatical in any way related to this inquiry or the possibility that he might be asked to give evidence?’ McMullan replied: ‘Not in my understanding, no.’ When asked if he had discussed that with Hegarty, McMullan said: ‘Em. It’s not something that I’ve discussed with him, no. Em, he is aware of the inquiry and aware of the media stigma that runs with that but … I don’t believe it would have any bearing on any decision he would make on that front.’
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At 10.08am on Friday, 28 August, Wightman formally sent an amended version of the 8 July ministerial submission to Cairns for onward transmission to Bell. The submission was by now familiar and asked the minister to urgently decide to introduce tiering. Given that Bell had verbally agreed to the proposal that Monday and that the only substantive change to the submission was to change the implementation date, it is unclear why it took almost a full working week for the submission to go to the minister. However, Wightman would not be so slow in alerting the industry to what was coming. In fact, those piling into the scheme were told about the decision before Bell had formally taken it – or even received the submission.
At 10.05am – three minutes before the document went to Cairns – Hughes had, on Wightman’s instructions, emailed Moy Park. He alerted the poultry processor that, although officials were still waiting the minister’s clearance, the changes were now unlikely before late October or early November. Over the remainder of that morning, Hughes and Wightman sent the details to some of those with the most obvious financial interest in the confidential informati
on – a boiler installer, a prospective claimant and the UFU. Wightman was pressed at the inquiry as to why he had done this when the minister had not yet even taken his decision, let alone issued a public statement about it. Struggling to find a coherent explanation for why this behaviour was appropriate, Wightman described it as a form of good manners whereby the officials ‘felt there was a courtesy on us’. It did not seem to bother them that what was good manners to those making money out of RHI was bad manners not only to their minister, who had yet to take a decision, but very bad manners to taxpayers who were going to have to pay for their behaviour. Wightman admitted at the inquiry: ‘It looks naive now when I look back.’ He went on to explain that part of the decision to hand out the information was to stop the phone ringing. Hughes, he said, ‘was constantly on the phone, as were some of the more junior staff on the domestic side, fielding these calls. So, it was as much to try to dampen that demand, as well; look, you know, rather than the same person phoning you back three or four times’. But the price of dampening demand on the phone lines into DETI would be to drive demand for RHI boilers across Northern Ireland. Boiler installers would soon be too busy to bother ringing DETI.