Book lifts the lid on RHI scandal

In this exclusive extract from his new book on the RHI scandal, SAM McBRIDE reveals how an agricultural business was financially punished because of a civil service error - while none of the officials responsible have even been disciplined.

PACEMAKER BELFAST  27 September 2017:
RHI Story. 
Brian and Liam McGuckian and Colin Newell  pictured at the site where they were planning to put a huge RHI installation in Cloughmills which the department has now pulled the plug on. 
Picture By: Arthur Allison/Pacemaker Press
PACEMAKER BELFAST 27 September 2017: RHI Story. Brian and Liam McGuckian and Colin Newell pictured at the site where they were planning to put a huge RHI installation in Cloughmills which the department has now pulled the plug on. Picture By: Arthur Allison/Pacemaker Press

Barney McGuckian was always looking for ways to improve his animal feed business.

Every year the north Antrim man went on a study trip, mostly to continental Europe, in an attempt to see how the feed mill in Cloughmills, which he ran with his brother Liam, could become more competitive.

On the 2014 trip, a powerful DUP figure who was completely unknown to him was present. It was Arlene Foster’s right hand man, Andrew Crawford. McGuckian had recently heard about RHI and was exploring the possibility of applying to the scheme for a massive heat plant.

PACEMAKER PRESS BELFAST 11/10/2019 Writer Sam McBride with his new book 'Burned', pictured today at Stormont Parliament Buildings. 'Burned' tells the story of Northern Ireland's RHI scandal that ultimately led to the collapse of the Stormont Executive. Photo Laura Davison/Pacemaker Press

Crawford, whose brother-in-law, Wallace Gregg, was from Cloughmills, got chatting to the businessman and, in McGuckian’s words, ‘made it a lot easier for us to get in the door’ to the department.

The special adviser put him in touch with the Department for Enterprise, Trade and Investment ‘s (DETI) key RHI official, Stuart Wightman, who met him to discuss the possibility of the McGuckians building a combined heat and power (CHP) plant – a mini-power station, generating electricity, but also utilising the heat for the manufacture of wood pellets.

McGuckian never met Crawford again. The next time he saw the spad was on television where he was facing allegations about his role in the RHI scandal.

At the point he met Crawford, CHP plants were ineligible for RHI. But that was to change in November 2015. At the very point where RHI was at last being reined in with cost controls, it was also being expanded.

It was an absurd decision, given the scale of the overspend by that stage. CHP plants are huge and involve enormous subsidy claims. But, perhaps based on the continued belief that London at least might be paying for the entire scheme and it was, in the words of one civil servant ‘effectively free money’ - DETI pressed ahead with expansion at the point where the entire scheme ought to have been shut.

However, a cruel fate was to befall the McGuckians and their business partner Colin Newell. Having consulted DETI at every stage and taken its advice about the plant’s design, they pressed ahead with their plans.

The installation, which would never have been on the ‘cash for ash’ tariffs and would have been paid at a lower rate than similar plants in England, was actively encouraged by civil servants and promoted in government literature, which led them to invest half a million pounds in getting it to the verge of construction.

In September 2016, three months before the BBC Spotlight exposé which precipitated RHI becoming a massive political scandal, DUP Economy Minister Simon Hamilton wrote to them to say that ‘subject to satisfying all Ofgem’s eligibility criteria’ they would be ‘entitled to the CHP tariff ’, and went on to refer to ‘the current RHI CHP tariff of 3.5 pence per kwh’.

In December, after the scandal erupted, having believed that they had been given preliminary accreditation, they were told in writing by a senior departmental official that they were ‘the operator of an accredited installation under the [RHI] scheme’.

But the following month, after Stormont retrospectively capped and tiered all tariffs, a huge problem was discovered. When officials went to the European Commission to ask for state aid approval, they were told that they had never applied for approval for the 2015 changes – of which CHP had been part.

It was an extraordinarily basic failure by DETI, which meant that the 2015 RHI changes had never been lawful and so CHP plants were ineligible. But when the error was discovered in 2017, civil servants sought to wash their hands of the implications of their disastrous mistake.

Having been treated shabbily by government, the three businessmen found themselves financially punished – while those responsible for the error escaped any censure. The Department for the Economy (DfE) said that was because it could not conduct disciplinary investigations while the public inquiry was ongoing.

The three men challenged DfE’s decision in court and at the time of writing are awaiting the outcome. But they were angry for a second reason. Even after discovering the huge error in 2016, civil servants could have belatedly applied for state aid approval.

But – by now under huge pressure to cut the RHI bill to taxpayers – they chose not to do so. A Stormont memo showed that around this time giant poultry processor Moy Park - which has huge clout within Stormont - privately expressed concerns to civil servants about the McGuckian proposal.

Senior Moy Park officials met Stormont’s Department of Finance in January 2017. A senior finance official, Emer Morelli, took a note of the conversation. Setting out three ‘key issues’ raised by Moy Park, she said: ‘The Moy Park team expressed a concern that one of the large combined heat and power plants with preliminary accreditation may not met [sic] the eligibility criteria due [sic] planning permission being granted 25 days after the scheme closed.’

When asked about that, Moy Park – which by now knew that there was a limited RHI pot and if the McGuckians entered the scheme it would take tens of millions of pounds – insisted that it had not lobbied against the plant and said its meeting was to ‘offer insight and suggestions to secure the NI RHI scheme within budget’. The McGuckian plant – one of two CHP installations at an advanced stage of design – could have cost the department between £60 million and £75 million over 20 years.

The McGuckians said that they were so dismayed at their experience of officialdom and politicians that they would never again get involved with any Stormont scheme. It would be a sentiment shared by many of those who had trusted Stormont’s assurances about RHI.

* BURNED: The Inside Story of the RHI ‘Cash for Ash’ Scandal and Northern Ireland’s Secretive New Elite is published by Merrion Press and is available now.