Q&A: What is the Northern Ireland ‘cash for ash’ scheme?
For every £1 users spent on green heating systems, they got £1.60 in subsidies
The non-domestic element of the Renewable Heat Incentive Scheme was described as “cash for ash” or “the more you burn the more you earn”. File photograph: Getty Images
What is the Renewable Heat Incentive Scheme? The Renewable Heat Incentive Scheme was set up in November 2012, and run by the North’s Department of Enterprise, Trade and Investment when current DUP First Minister Arlene Foster was its minister. The non-domestic element of the scheme was designed to encourage firms, businesses and farmers to switch from fossil-fuel heating to biomass systems such as wood-burning boilers.
How was the scheme botched in Northern Ireland? The Northern Ireland system, unlike a capped system in Britain, was flawed because there was no limit on usage and subsidies were over-generous. In short, for every £1 that users spent on their green heating systems, they got back £1.60 in subsidies. It was described as “cash for ash” or “the more you burn the more you earn”.
Is it a costly fiasco? A whistleblower said that in one instance a farmer stood to make £1 million over the 20-year term of the scheme for heating an empty shed. The Northern Ireland Audit Office, which slated the scheme, cited how in Britain a business could gain £192,000 in subsidies but in the North the same business would earn £860,000. It is estimated that up to 2036 it will result in an overspend of more than £400 million to be paid by the Northern Executive – and hence the taxpayer.
How many availed of the scheme? A total of 1,946 applicants were approved, a 98 per cent approval rate. There was a spike of 984 applications in the three months from September to November 2015 after officials announced they were correcting the system but before that change took effect.
Why has the issue caused political turmoil? For a number of reasons, but primarily because the scheme was initiated when Ms Foster was the responsible minister.While some senior department officials were blamed, Ms Foster was also accused of “being asleep at the wheel”. There is also a question over whether political pressure was exerted to extend the lifetime of the scheme after a senior civil servant wanted it closed in September 2015. There is confusion over whether a whistleblower directly warned Ms Foster about the huge flaws in the scheme, and questions over why it took so long for the department to realise how serious the situation was.
Is anything happening to remedy the problems? Ms Foster and the DUP Minister for the Economy Simon Hamilton have pledged to take action in the new year to try to reduce the cost of the scheme. Legal experts have claimed it will be very difficult to renege on legally-binding long-term contracts.