The Renewable Heat Incentive scandal (RHI scandal), also referred to as RHIgate and the Cash for Ash scandal, was a political scandal in Northern Ireland that centred on a failed renewable energy (wood pellet burning) incentive scheme. It was reported to have potentially cost the public purse almost £500 million. The plan, initiated in 2012, was overseen by Arlene Foster of the Democratic Unionist Party (DUP), the then-Minister for Enterprise, Trade and Investment. Foster failed to introduce proper cost controls, allowing the plan to spiral out of control. The scheme worked by paying applicants to use renewable energy. However, the rate paid was more than the cost of the fuel, and thus many applicants were making profits simply by heating their properties.
The political scandal first came to light in November 2016, by which point Foster had become Northern Ireland's First Minister. Foster refused to resign or stand aside during any inquiry, saying that to do so would be seen as admitting to some culpability in the matter.Arlene Foster statement in full Belfast Telegraph, 10 January 2017
The affair ultimately caused Sinn Féin's Martin McGuinness to resign in protest as deputy First Minister of Northern Ireland in January 2017 after ten years in office, citing Foster's refusal to stand aside from her role while an investigation took place, among other matters. In the power-sharing government, McGuinness' resignation also meant that Foster was removed from her role as First Minister, which in turn caused the Executive Office of Northern Ireland to collapse for the subsequent three years.
On 16 January 2017, Sinn Féin refused to re-nominate a deputy First Minister in protest at what they called the "arrogance and disrespect of the DUP", thereby triggering a snap election. The Northern Ireland Executive collapsed and the Northern Ireland Assembly was dissolved on 26 January 2017. The 2017 Northern Ireland Assembly election was held on 2 March, but did not lead to formation of a new Executive. On 11 January 2020, after having been suspended for almost three years, the parties reconvened on the basis of the New Decade, New Approach agreement proposed by the Irish and UK governments. An inquiry into the affair commenced on 1 February 2017 and issued its report on 13 March 2020.
Background
Politics of Northern Ireland
Since 1998, Northern Ireland has had a devolved government within the United Kingdom. The Northern Ireland Assembly and the Northern Ireland Executive together make up the legislative and executive branches of the Northern Ireland government. Members of the legislative assembly (MLAs) must self-identify as a particular designation: "Unionist", "Nationalist", or "Other". Under the terms of the Northern Ireland Act 1998, 30 members may submit a "Petition of Concern" to the Speaker of the Assembly on any motion or proposed legislation, making it subject to approval by cross-community vote. Motions subject to a cross-community vote, either by standing orders or by a petition of concern, require support from both a majority of unionists and a majority of nationalists.
The Northern Ireland Executive is jointly led by a First Minister and deputy First Minister who are nominated by the largest parties of each of the two designations. In 2016, these parties were the Democratic Unionist Party and Sinn Féin. Because the Office of First Minister and deputy First Minister is a joint one under Northern Irish law, the resignation of either vacates the whole office. If the office cannot be filled after a seven-day period, the entire assembly is dissolved and a new assembly election must be called.
History
The RHI scheme in Northern Ireland was managed and set up by the then Department of Enterprise, Trade and Investment (DETI) in 2012 and was overseen by Arlene Foster, the DETI Minister at the time. The intention of the scheme was for businesses and non-domestic properties to begin using renewable heating sources such as wood pellets by offering them generous subsidies.
In the Northern Ireland Programme for Government (PfG), the Executive set out targets for renewable energy. It hoped that 4% of heat would come from renewable resources in 2015 with a further target of 10% in 2020. The RHI scheme offered incentives so that businesses and non-domestic users would change to renewable energy, which includes biomass boilers, solar pumps and heat pumps.
The scheme was approved by Executive ministers to meet the Programme for Government target. The scheme was budgeted at £25 million for 2011–2015. The scheme offered to cover the cost of the fuel and the boilers and to leave a margin of approximately 12%. The scheme effectively paid people to heat properties, so long as they used renewable energy to do so. The lack of cost controls encouraged applicants to profit from using excess energy.
In the period 2014–2015, there was an underspend of £15 million as there was a lack of uptake. From April 2015 applications increased "significantly". After officials announced changes to the scheme, 984 applications were received from September 2015 to November 2015, which was before the changes announced were due to take place. The scheme was closed in February 2016 by Jonathan Bell, successor to Foster as Minister of DETI. He said that it was closed "in view of the significant financial risk to the Northern Ireland block grant for the next 20 years".
Fraud
Concerns of fraud were raised initially in 2013 and again in 2014, when a whistleblower contacted Foster to raise concerns about the scheme. The whistleblower stated that the scheme was "flawed" and the concerns of civil servants "were ignored" after she reported abuse of the scheme, as property owners were taking advantage of the scheme by heating properties that were previously unheated. It is claimed that the team, which comprised ten officials, investigated the whistleblower's claims and "did not believe the informant" and did not report back to Foster.
Another whistleblower wrote a letter in January 2016 to tell Foster, who had by then become First Minister, about an "empty" farm shed that was "being heated for the subsidy". The scheme did not take into account that properties that were not previously heated could now be heated for a profit.
The lack of cost control led to the Northern Ireland Executive committing a figure of £490m, based on the NIAO report 2015/16, to the scheme over 20 years. HM Treasury contacted the Executive in light of the huge bill and said that the Executive would have to find the funds for it. The projected £490m spend would be spread over 20 years, as the participants of the scheme signed contracts with DETI and their payments were to last for 20 years. When news first broke of the botched scheme, it was originally thought that the total cost to the budget would be £400m, but this was later revised up to £490m. Northern Ireland receives a block payment each year from HM Treasury, and the block payment will need to be adjusted as a result of the money committed to the scheme.
Arlene Foster left DETI and became Minister for Finance, leaving Jonathan Bell to succeed her as DETI Minister. After news of the affair broke, Bell said on the BBC Radio Ulster programme The Nolan Show that DUP special advisers and Foster "intervened" to prevent the closure of the scheme. He also claimed that Foster tried to "cleanse the records" by hiding her involvement in delaying the scheme's closure. In the period that he says he tried to close the scheme and the scheme's actual closure, there was a spike in applications which caused more money to be allocated to the scheme. After the interview, Bell was suspended from the DUP.
Investigation A total of 1,946 applications had been received by DETI for the scheme. 98% of applicants received by DETI were approved. After civil servants started to discuss closing the scheme, an additional 948 applications were made between September and November 2015. This enabled the applications to be determined before any changes to the scheme took place.
Stormont's Public Accounts Committee (PAC) opened an investigation into the scheme because the scheme ran over its budget and because of the spike in applications. An independent audit inspected 300 sites which benefited from the scheme, and the audit revealed that there were issues at half of those, although poultry and mushroom producers were found to be operating within the remit of the scheme. The audit also indicated that there were serious fraud issues at 14 of the sites and payments to 2 of those sites were subsequently suspended.
The Northern Ireland Assembly was recalled on 19 December 2016 to discuss the issue at the request of Foster and Martin McGuinness, the deputy First Minister.
Public dispute between Foster and Bell
Jonathan Bell became DETI minister after Foster was promoted. As details of the scheme were released to the public, Foster came under increasing pressure because she was the minister who had initially conceived it. She apologised for the lack of cost control, but accused Bell of prolonging the scheme's closure. In response Bell gave an interview to The Nolan Show, broadcast on BBC One Northern Ireland. In it he accused the DUP's special advisers of trying to compel him to keep the scheme open. He claimed that they were not allowing time to close the scheme at its peak. He named Timothy Johnston, special adviser to then First Minister Peter Robinson, and Andrew Crawford, one of Foster's aides. Bell accused Foster publicly of trying to "cleanse records" to remove evidence of her interference. He also called for a public inquiry into the matter.
During the last three months of the scheme it attracted almost 1,000 applications, even though the minister claimed he had tried to close it. These three months are significant as Bell was not in ministerial post, due to the DUP's rolling resignations in 2015. On the same episode of The Nolan Show, Foster responded to Bell's allegations and gave her side of the story. She professed to be unaware of Bell's allegations. Nolan shared some of the allegations with her in the interview. She accused Bell of using "his physical bulk" to confront her referring to him as being "very aggressive". DUP party officers formally suspended Bell from the party for talking to the media without prior permission.
Political reaction There were calls on Foster to quit and mounting pressure on her to do so from Stormont's opposition parties after it was claimed that Dr Andrew Crawford, her special advisor, had not received correspondence relating to concerns over the RHI scheme. There were public protests in Belfast and in Derry calling for Foster to resign as First Minister.
Recall of Northern Ireland Assembly On 19 December 2016, the Northern Ireland Assembly was recalled from recess in order for Foster to give a statement to the chamber regarding the scandal. The opposition parties submitted a motion to exclude Foster from office for six months.
There was disagreement in the chamber as it turned out that Foster did not have Martin McGuinness' approval for the statement to be read. In Northern Ireland, the First Minister and deputy First Minister are joint roles. MLAs tried to raise points of order with the Speaker, Robin Newton (DUP), who did not allow them to speak. MLAs walked out of the chamber in protest and Newton suspended the sitting for 30 minutes.
As the Speaker allowed Foster to address the chamber in her capacity as First Minister without the consent of the deputy First Minister, all other parties walked out of the chamber in protest at the beginning of her statement. She gave the statement with only her own party present and, as a result, she only received questions from her party colleagues.
Vote of no confidence