Renewable Heat Incentive Scheme

Part of Ministerial Statement – in the Northern Ireland Assembly at 12:00 pm on 19th December 2016.

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Photo of Arlene Foster Arlene Foster DUP 12:00 pm, 19th December 2016

I thank the Member for her question. It is an important question, and I am glad that she has asked it. First, let me say that our opponents told us that today was an important day but then could not be bothered to show up. They cannot be bothered to show up and ask me questions about the sorts of things that the Member has asked me about.

In the regulatory impact assessment, the Department recognised that setting incorrect support payment levels to the RHI tariff posed the most obvious risk to the Northern Ireland scheme. If the level was set too high, those installing renewable heat would be oversubsidised and less heat would be delivered per pound than would be under more optimal subsidy levels; alternatively, if the rate was set too low, renewable heat would not be deployed to the extent expected. In that document, it was made clear that there were to be regular planned reviews of subsidy levels after a number of years of experience with the subsidy. That would, of course, have provided the opportunity to amend tariffs if needed and ensure that they remained appropriate, given the potential changing market conditions. Of course, the market changes, and we saw that in the prices of wood pellets, oil and gas.

In that RIA, it was proposed that the first review would begin in January 2014, with any changes needed to be made by 1 April 2015. The review did not happen. Departmental officials did not carry out that review. As Minister, I have the right to expect that risks identified in an RIA would be managed by officials. As the accounting officer has explained at length to the Public Accounts Committee, several important commitments were made at the time when the RHI was approved, not least on risk management, that were not followed through. Those omissions by officials contributed materially to the very serious problem we now face. That is already under investigation in the fact-finding work that has been discussed with the PAC, and I look forward to the outworkings of the PAC. As I have already said on the record, I am more than happy to go to the PAC, even though that is not the convention. The reason I am happy to go to the PAC is that I have nothing to hide in the matter — absolutely nothing. I am putting everything out there and am calling for an inquiry if we can get it arranged with colleagues. I have nothing to hide, so why would other Members table a motion to exclude me? It is all party politics, and this party will not be part of it.