The Chair of the Northern Ireland Affairs Committee comments that although the Department has made some positive progress on improving the RHI buy-out offer, its refusal to account for wider investment decisions in the tariffs is a missed opportunity to remove some of the unfairness in the scheme.
The Department has made some welcome progress on reforming the structure of RHI payments, including accepting the Committee’s recommendations to:
- Include individual costs faced by each participant in the calculation of the buy-out offer;
- Include indirect costs in buy-out offers;
- Enable participants to bring a challenge on their buy-out offer in front of an independent Statutory Review Panel which has the power to review and revise prior decisions made by the Department;
- Monitor any withdrawals from the scheme and report any significant trends to the Committee.
The Department has also committed to procure an independent review of the NI Non-Domestic RHI tariffs in the current financial year and update the Committee on progress. However, the Committee's central recommendation – that the wider investment decisions taken by boiler owners should be accounted for in the revised payments – has not been accepted by the Department for the Economy. This is despite the Committee's concern that, in comparison with a similar scheme in GB, the repayment rate for the NI scheme is based on unrealistically low costing which results in unfair payments for participants. The Committee's original report noted that the changes made in April 2019 led to a dramatic reduction in payments to scheme participants, with some participants in Northern Ireland potentially receiving tens, or even hundreds, of thousands of pounds less than participants in GB.
Commenting on the Department's response to the report, Committee Chair Simon Hoare MP said:
"I am pleased that the Department has accepted some of our report's important recommendations on the buy-out scheme and the independent review of the tariffs. However, the Department's reluctance to give financial recognition to the investment decisions of RHI participants is a missed opportunity to address some of the unfairness created by the revisions to RHI payments. It is not enough to offer participants an acceptable way to get out of the scheme that takes into account indirect costs, these costs must be built in to the payments offered by the scheme to make it comparable to the counterpart scheme in Great Britain. RHI participants in Northern Ireland are getting a raw deal from this scheme and I have written to the Permanent Secretary to press the Department for action to rectify this. I hope the Department will reconsider its decision and I trust my correspondence with the Permanent Secretary will be productive."