in and out from London, to power-sharing ministers appointed after the 1998 Good Friday Agreement, there had been one constant: the Northern Ireland Civil Service.
The energy team, which Hepper now headed, sat within the Department of Enterprise, Trade and Investment (DETI), a relatively small department of about 600 officials but with sprawling responsibilities for tourism, company law, economic development, consumer protection, health and safety law, cross-border trade and telecoms. When Hepper arrived in her new post, she had four hours with her predecessor to be briefed on the new role and was given a bundle of documentation. It was a huge job. Energy policy was in flux. There was a push for renewable energy systems, about which there was limited understanding, alongside proposals to extend the piped natural gas network in Northern Ireland and moves to harmonise the electricity markets between Northern Ireland and the Irish Republic. On top of that, DETI’s small energy team found itself responsible for transposing EU energy directives into law – a responsibility the devolved Scottish or Welsh administrations did not have to do because energy policy was only devolved in Northern Ireland.
Not long into the post, Hepper decided to create a renewable heat branch within the wider division. But while that might have implied that there was now a significant team working on the issue, it was the equivalent of one and a half full-time staff, with the official in charge of the branch working part time. But no one at the time viewed this as a Father Ted approach to public administration – it was just how things had always been done in Stormont.
Although Northern Ireland had a huge public sector compared to anywhere else in the UK, the reality was that a region of 1.8 million people was always going to be doing things on a shoestring by comparison to Whitehall, the throbbing administrative centre of the British State from which an empire had once been administered and wars directed. But despite Stormont’s small size, there was a culture of civil servants doing whatever it took to please their ministers and a reluctance to hand back power to Westminster.
By the time Hepper arrived at DETI, it had for some time been under pressure to set up a Renewable Heat Incentive (RHI) as part of an EU-wide endeavour to financially induce businesses to move from fossil fuel heating systems to sustainable green alternatives. There were two main reasons: an EU directive had set challenging targets for renewable heat. If those were not met by 2020, there would be huge fines from Brussels. The second imperative to launch RHI came from business. The rest of the UK had been moving ahead with a scheme that would launch in late 2011. Without that subsidy being extended by Stormont, Northern Ireland firms would be at a competitive disadvantage. In the aftermath of a major recession, that was a potent argument in favour of action.
The Whitehall department responsible for the GB heat subsidy had in 2008 offered Stormont the chance to piggyback on its scheme, something which would have meant Stormont agreeing for Westminster to legislate for it. Hepper’s predecessor, in consultation with Arlene Foster, the DUP minister who would spend seven years in the department, decided not to avail of that opportunity. They believed that Westminster was rushing unnecessarily and were aware of a wider political concern in Northern Ireland, which at that point was just a year into the restoration of devolved government. The unionists and nationalists who made up the Stormont Executive were agreed that the whole point of devolution was to allow them to decide their own policies. In that context, simply handing back power to Westminster was counterintuitive.
Regardless of that benign logic, which might explain what happened in 2008, from this moment of divergence suspicion would subsequently arise as to why a handful of civil servants and politicians in Belfast had decided to do their own thing and whether someone somewhere in Stormont had spied an opportunity to exploit a funding stream from London.
Civil servants and politicians often consciously chose not to record controversial information, which makes it difficult to be certain what happened in the early years of the scheme. And the fact that the department had a deliberate policy of not recording important information means that if there was any inappropriate decision to deliberately exploit the RHI funding it would almost certainly not be recorded.
After deciding to run its own subsidy for renewable heat, Stormont then took its time about deciding what that should be. Staffing shortages contributed to it taking a year for DETI to hire – largely with EU money – consultants AECOM Pöyry to produce a report on the local potential for renewable heat.
But many years later, at the public inquiry which would dissect the inner workings of Stormont like never before, the independence of that report came under scrutiny. There has long been a suspicion that civil servants sometimes hire consultants because they want an apparently independent voice to advise them to do what the officials wanted to do anyway. The inquiry revealed a level of departmental involvement in writing the report, which was not publicly apparent at the time.
Initially, the consultants sent DETI a draft version of their report. But after discussions with DETI officials they made changes to that document. In response to that changed version of the report, civil servant Alison Clydesdale, head of DETI’s sustainable energy branch, emailed the consultants in May 2010 to say that the report was now ‘closer to what we need’. But she went on to make a series of suggestions for further changes. One of the requests was to alter what the consultants were recommending should be done to incentivise renewable heat. Clydesdale wrote: ‘We would need something stronger than “some form of incentive”.’ She went on to make a series of suggestions and told the specialist engineering consultancy: ‘I’m not sure about saying that geothermal energy should be prioritised and supported over other resources – perhaps you could think about some rewording here … this wording could present difficulties going forward.’ Four days later, senior AECOM consultant Andrew Turton replied to say: ‘Please find attached the latest version of the report with the changes as requested — I hope these are now as desired!’
Having at the request of the department scored out ‘some form of incentive will be required’, the consultants then replaced it with what would be the report’s key recommendation: ‘The GB scheme appears to be inefficient for Northern Ireland … Northern Ireland needs to develop a NI specific incentive scheme.’ It seems clear that the department influenced that key recommendation, even though it had already assured the Assembly that the report would be an entirely ‘independent assessment’. However, the report presented that as a means of being less generous – not more generous – than what was being planned in GB.
Intriguingly, Turton’s initial report had contained a recommendation to review the GB RHI scheme once it started, and to ‘monitor the cost-effectiveness of the incentives through applications supported’. That was also scored out. The failure to either monitor what was going on in GB or to keep a close watch on the cost of the scheme would be two crucial areas which would make it possible for the costs of Stormont’s scheme to escalate rapidly. Why had someone chosen to remove that part of the report?
Rather than have the confidence to take the experts’ advice and then make its own decisions, DETI appeared to be wanting to steer the consultants towards telling it what it wanted to hear in certain areas. At the inquiry, Clydesdale defended her actions, insisting that much of what she had done was ‘correcting the report and correcting inaccuracies’. At the time, Foster presented the report to the Assembly as being based on ‘reliable data’ and that it had ‘considered appropriate methods of incentivisation’, something she said was ‘absolutely vital to ensure that future policy decisions regarding the incentivisation of renewable heat are based on sound evidence’.
In a September 2010 letter to the Assembly committee which scrutinised her department, Foster said: ‘I can assure you that I am committed to developing the renewable heat market in Northern Ireland and see many benefits in doing so.’ That personal commitment to RHI and a desire to be associated with it would mark many of Foster’s pronouncements when she thought the policy was popular. Once it began to implode, the minister suddenly became very keen to stress how limited her involvement had been.
Once
