the department, one of Hepper’s first tasks was to get her team to summarise it for the minister. On Hepper’s advice, Foster issued a press release in September 2010 to reassure those pressing for a renewable heat subsidy that Stormont was planning to follow what had happened in the rest of the UK by setting up its own incentive scheme.
By the time Hepper arrived, the need to get a renewable heat subsidy launched was also being driven by the fact that Westminster had made available to Northern Ireland a pot of £25 million for four years from 2011, which could only be spent once a Stormont scheme was launched. That was unusual in government spending. Generally, a need would be identified which would have a certain cost and then the budget would be found. But here the cart came before the horse, with money being made available and Stormont finding itself under pressure to spend it. From the outset, the central concern for some in Stormont was that the money might not be spent in Northern Ireland.
Two years after her arrival, by which time the scheme was still six months from being launched, Hepper emailed her minister’s special adviser (spad), Andrew Crawford, a figure who from early on appeared to have taken a particular interest in the scheme. In that email she referred to the ‘exceptional circumstances’ as a result of ‘the pressure to spend the Treasury money or lose it’.
As decisions were being taken about how the scheme would operate, one central preoccupation of those designing the scheme was that it would see as much of the available money spent as possible. Even if there was no deliberate desire to overspend because of a belief that it was all Treasury money, the ambition to spend as much of the available budget as possible was always going to conflict with what taxpayers might assume would be a desire to spend as little of their money as possible in order to achieve the desired goal.
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Under devolution, senior members of the Northern Ireland Civil Service were unusually keen to satisfy their political masters. Having for decades operated under direct rule ministers from Westminster, many of whom spent limited time in Northern Ireland, suddenly civil servants found themselves reporting to ministers who had firm ideas about what should be done.
Looking at the political landscape, even civil servants with stunted political antennae would have realised that the DUP and Sinn Féin were likely to be in charge for a very long time. In that context, many civil servants bent over backwards to please their ministers. Some officials were reluctant to give their minister bad news. But in some cases, this was not necessarily in the politician’s interest.
In November 2008, four years before RHI would be launched, Hepper’s predecessor as head of energy division, Jenny Pyper, was sent a memo by a subordinate. In it, Pyper was reminded that when they had opted out of the UK-wide RHI scheme, she had sent a submission to the minister on the issue but they had taken out a paragraph saying that DETI ‘cannot hope to develop this area of work with current resources’. Years later, when they were asked to explain how the debacle had started, civil servants would claim that they had inadequate resources to set up the RHI scheme Foster asked them to create – and Foster would say that she had never been told of the extent of the staffing difficulties in energy division.
Just five days before that memo, Pyper – who would go on to become the Northern Ireland Utility Regulator – received another memo from an official who alluded to the glacial pace of Stormont’s own thinking on incentivising renewable heat. Referring to a Whitehall document to which DETI had been invited to contribute, they said: ‘I am finding it hard to find something positive to say on heat, so it is not mentioned specifically.’
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By her own admission, Hepper was ‘not an energy expert’. Nor were those around her in the team designing the RHI scheme. Joanne McCutcheon, the part-time official who headed up the renewable heat branch, came from a telecoms background. Completing the tiny team was Peter Hutchinson, a relatively junior official who had joined the civil service five years earlier, graduating with an arts degree before grappling with the complexities of biomass boilers, air source heat pumps, photovoltaic panels and tariff methodologies. Like the others, Hutchinson was a generalist, who had come straight into DETI from university. But Hepper had no qualms about the team, taking the view that they would ‘learn on the job’. After all, it was how the Northern Ireland Civil Service – and to a large extent, its Whitehall equivalent – had operated for longer than anyone could recall.
However, with it clear that none of those designing the policy were experts, the department acted as it invariably did in these situations – it turned to private consultants. Hepper and her boss authorised a contract that would ultimately see £100,000 paid to Cambridge Economic Policy Associates (CEPA) for recommendations about incentivising renewable heat. If the RHI scandal resulted from a series of genuine mistakes from the outset, rather than a calculated attempt to fleece money from the Treasury, then that decision was critical to all that followed.
The situation exposed a fundamental weakness for government departments largely staffed by generalists: they were hiring in outside consultants because officials lacked expertise to do the work, yet those same civil servants would be the ones scrutinising the work for deficiencies. The absence of internal specialists meant that there was always the potential that the consultants would bamboozle the client with apparently detailed analysis, with the department lacking the cognitive clout to query the report.
Later, CEPA would claim that when it was given the contract it had less expertise in renewable heat than the department that hired it. The global consultancy firm’s director, Mark Cockburn, said: ‘we were learning a new area as we went along’, and as a result it had sub-contracted part of the work to another consultancy, AEA. It was the partially sighted leading the partially sighted and ultimately both would see their reputations damaged as a result of the arrangement.
Seven years later, Cockburn told the public inquiry that ‘I don’t think we had many conversations’ about the risk of the subsidy being overly generous. At that point, he said, the emphasis was to design a scheme, which was sufficiently attractive to encourage uptake, with the idea that it would be giving claimants too much money regarded as ‘a very remote possibility’. The desire to make a green energy scheme generous, rather than Stormont using its powers to pare back Westminster’s approach, was at first glance curious. The DUP – which held the energy portfolio for the unbroken decade in which devolution operated from 2007 to 2017 – was at best sceptical about green energy.
Prominent DUP politicians were firmly opposed to any environmental subsidies. Their reasons ranged from opposition to overburdening taxpayers to a belief that global warming was not caused by human activity.
The most outspoken critic was Sammy Wilson, the Finance Minister at the time when RHI was set up. In one of his frequent forays against environmentalists, the East Antrim representative denounced ‘the high priests of the new global warming religion’ for foisting high energy prices on the public.
But while Wilson was steeped in the DUP, with enough outspoken comments to fill an encyclopaedia, Foster was a very different figure. The epitome of the New DUP, she had spent years in the Ulster Unionist Party before defecting to the DUP in 2004 as the balance of power within unionism decisively shifted in favour of the party founded by Ian Paisley. Largely eschewing the heady rhetoric of the likes of Wilson, she became a Stormont minister in 2007 and cultivated a reputation for tough pragmatism with a desire to be seen to be attentive to the business community.
That circumspection meant that she was never given to the sort of controversial pronouncements on climate change, which the Finance Minister relished. But she had not endeared herself to environmental groups either. They were furious when in 2008 Foster, the then Environment Minister, rejected the case for an independent environmental protection agency, leaving Northern Ireland the only part of the UK and Ireland without such a body. So any decision to create a green energy subsidy more generous in Northern Ireland
