A high court ruling means a poultry farmer will not have to repay £53,000 in RHI money. For now.
“Horror show” and “outrageous” are just two of the ways the Renewable Heat Incentive (RHI) scheme in Northern Ireland has been described in the 11 years since it was introduced.
Poorly designed with no limits on how much could be claimed (unlike in England), the RHI scheme was launched in 2012 and signed off by Arlene Foster, who was then Minister for Enterprise, Trade and Investment, who admitted she didn’t even read the documents before giving it the green light.
Years of pain and misery have now been endured by numerous poultry producers who signed up in good faith, but in 2017 had their subsidies cut, and since then have faced attempts to recoup tens of thousands of pounds in payments.
And while it is still far from over, a new legal decision could have implications for numerous poultry farmers fighting the Government over accusations they misused the scheme.
Last month, a poultry farmer from Colraine – Thomas Paul – sought a judicial review of a decision ordering him to repay RHI money to the Department for Economy (DfE). The case was resolved on a legal technicality in his favour. Paul was one of many farmers who the Government accused of claiming too much money under the RHI scheme.
His solicitor is Brian Moss, of Worthington’s Law in Belfast (pictured). Moss spoke to Poultry Business about the case and its implications for the industry.
Moss said his client had two boilers accredited to the RHI scheme. Before the scheme was launched, he used LPG to heat his sheds. “Poultry farmers require a lot of heat, so a source of cheap heat was always going to be of interest,” said Moss.
Hundreds of poultry farmers signed up to the scheme, which offered subsidies for the use of wood pellet boilers. It quickly became clear the scheme was open to abuse by some unscrupulous people who could claim money for heating empty sheds. As recriminations began and costs to the public finances mounted, innocent claimants were lumped in with those who took advantage of the scheme. The fallout ended up with the collapse of the Northern Ireland Assembly at Stormont.
After it reduced the subsidies in 2017, the DfE decided to audit the RHI participants. Of particular interest were producers who had reduced the amount of heat they were using. Moss said the DfE took this to be a sign that they had previously been overclaiming.
However, Moss said in fact Paul had, along with many other poultry farmers, looked at ways to cut heat usage for legitimate reasons. With reduced subsidies, “they couldn’t afford to run the boilers,” said Moss. While heating sheds is an effective way to ensure a good environment for poultry, there are other ways to manage the environment with less heat, such as reducing the ventilation.
“DfE outsourced the enforcement functions under the scheme to Ofgem, the energy regulator,” said Moss. “Ofgem wrote to a number of clients saying ‘we note you have cut back your heat usage; therefore we believe your payments before were to increase your income.’”
Ofgem told the participants they intended to recover the subsidies they had been previously paid. In effect, said Moss, they told the claimants: “We are kicking you out of the scheme and we are clawing back the money.” Moss told PB he had between 60 to 70 other clients all in a similar position to Paul.
In Thomas Paul’s case, the amount was £53,000. He was told he had 90 days to find the money.
Paul then had the right to seek a statutory review, under RHI regulations. Statutory reviews are decided by the DfE, so the department was reviewing the decision made on its own behalf by Ofgem. The DfE upheld Ofgem’s decision.
Paul’s next step was to seek a judicial review of the statutory review. Along with eight other poultry producers in a similar situation, Moss was engaged to represent Paul in the judicial review. “Mr Paul’s case went forward as the test case,” explained Moss.
The case was going to be heard on 31 August, said Moss, but “a week before DfE threw in the towel.” At the eleventh hour, DfE acknowledged that while Ofgem sought to recover the money, they weren’t legally entitled to do that.
The outcome meant the decisions to revoke Paul’s membership of the RHI scheme and the decision to recoup £53,000 were both quashed, with implications for others currently engaged in legal action. It also meant DfE has to pay both its own legal costs and that of Paul.
“There are eight judicial reviews still outstanding,” said Moss. “I think this means they will have to concede other cases.” The barrister representing DfE asked for “some time” said Moss, but will shortly have to present a paper to outline what it intends to do next. Moss said that while the process DfE and Ofgem followed has been unlawful, it “doesn’t mean it can’t fix that,” by giving Ofgem the relevant powers in law.
For other claimants who have been asked to repay money, but who are not currently pursuing legal action, there are other implications. Moss said. “Everybody who has received a recoupment notice is entitled to have that reviewed,” he said.
The Ulster Farmers’ Union (UFU) said approximately 130 participants of the RHI will be impacted by the outcome.
The UFU president David Brown described the whole situation as ‘outrageous’. “It is almost a dead cert that there are cases of a similar nature, where participants have been made to repay money because they were allegedly abusing the scheme,” he said. “We urge UFU members to seek legal advice as they will be impacted by this outcome.
“For many years, UFU members who entered the RHI scheme endured suspicion and have had accusations thrown at them. Innocent parties were wrongly ejected from the scheme and forced to repay subsidies like the poultry farmer who contested the sanctions imposed on him which exposed the unlawful behaviour of DfE. Since the beginning of this scandal, we have stood by our farmers who endured false allegations and have been active in protesting their innocence. Vindication is needed for those members who were wrongly tarred with the same RHI brush of fraudulent behaviour.
“Prior to this court hearing we raised questions about DfE’s competence, capacity and capability to manage the scheme. These were wrongly dismissed but now there is no doubt about DfE’s competence – it is completely shot.
“The RHI scandal is a huge setback for renewables in Northern Ireland and there is a strong case to be made for ‘levelling up’ support for green energy here. We now want to see ownership of the RHI scheme being removed from DfE and are in full support of RHANI in their call to the Secretary of State to pass legislation in Westminster that would transfer the resources and the authority to the national lead department in Whitehall.”
Moss described the management of the scheme as a “horror show” and a “another chapter in a sorry saga of public administration.”
It is clear legal arguments will continue for years to come, with poultry farmers and the government resorting to court cases to try and resolve the bitterly contested details. While this case was resolved on a technicality, if it does return to court, Moss is ready to make the case for his clients. “We have a whole range of legal points. The department knows we are ready to come back at them.”
PB was unable to reach Thomas Paul for comment.
PB posed the DfE a series of questions. Here are the responses:
Q1 There are several other poultry farmers currently seeking judicial reviews. What does DfE intend to do in those cases?
The Department cannot discuss the detail of the individual cases. However, each case will be determined by reference to its own facts.
Q2 Given Ofgem did not have the legal right to demand repayment of RHI subsidy money, does the DfE now intend to try and give Ofgem those powers?
Ofgem and the Department have already considered the administrative arrangements and are clear on their respective roles.
Q3 How much public money has DfE spent on legal fees during the judicial review of Thomas Paul’s case?
The legal fees have not yet been determined.
Q4 How much money has been recouped from poultry farmers the DfE believes have overclaimed RHI subsidies?
Recoupment decisions relating to the Non-Domestic RHI Scheme are the subject of ongoing legal challenge and it would be inappropriate to comment.