Northern Ireland’s Department for the Economy is considering setting up an entirely independent panel to assess businesses’ claims that they face financial hardship because of changes to the controversial Renewable Heat Incentive scheme.
Lord Duncan of Springbank, the UK government minister for Scotland and Northern Ireland, confirmed last week that the department is in the process of setting up an RHI “hardship unit” to consider claims after the government passed legislation reducing annual payouts to agriculture businesses under the botched RHI scheme.
Duncan said in March that he wanted the economy department to set up an independently-chaired panel to ensure “each element of [each claimant’s] case is considered in detail, thoroughly and with their participation to understand exactly what that hardship looks like”.
Responding to a written question from Lord Maginnis on 17 May, Duncan said the department was now considering whether not only the chair but the entire panel should be independent.
He added that “as this is a devolved matter it will be for the Department for the Economy to set the necessary criteria, and ensure that the hardship unit is made up of suitably qualified and independent members".
The RHI, which was partly to blame for the collapse of Northern Ireland’s power-sharing agreement in January 2017, was launched in 2012 and offered substantial subsidies to farmers who agreed to use renewable energy sources to heat buildings.
However, in what became known as the "Cash for Ash" scandal, it emerged that the scheme lacked effective cost controls and enabled some property owners to turn a profit by heating buildings they had not heated previously. The RHI closed to new participants in 2016, and the UK parliament passed legislation in March that will drastically cut the subsidies available to remaining RHI scheme participants.
The legislation also included a provision for a voluntary buyout procedure for people to exit the scheme. Duncan said in March the proposed hardship unit, along with the ongoing parliamentary inquiry into the RHI scandal, would inform what form this buyout would take, and called for “appropriate funds” to be set aside to deal with the fallout from changes to the scheme. "We need to be in a situation where the compensation element of this is adequate and informed by these elements," he added.
Last month, the Department for the Economy's permanent secretary, Noel Lavery, defended the changes to RHI payments, saying that failing to reduce them could breach state aid rules.
In a letter to the Northern Ireland Affairs Committee, published at the beginning of this month, Lavery said both the department and claimants could face "severe consequences" if the payments are not reduced, because it could lead to the department being ordered by the European Commission to "claw back" payments in future.