Cash-stretched Highland Council has risked losing more than £1million in subsidies for green energy heating installed at homes and schools through mismanagement of the scheme, the Press and Journal can reveal.
The figure emerged in a private briefing to councillors into the authority’s handling of claims regarding biomass installations.
Councillors are furious and a north MSP “deeply disappointed” that council tax payers have missed out from an initiative designed to reap lucrative rewards.
The scale of mismanagement of the Renewable Heat Incentive (RHI) scheme surfaced in an internal audit.
The P&J has been told by numerous sources that there was widespread condemnation of the council’s handling of the initiative in a 90-minute discussion behind closed doors, and that there was huge frustration that rewards did not materialise at a time of unprecedented budgetary challenges.
Eight years of budget cuts culminated in a £50million savings package in 2016-17 and led to 250 staff taking voluntary redundancy to help balance the council’s books.
There was some support, however, for officials’ handling of the matter from a couple of councillors.
According to several taking part in the debate, one councillor member colleagues of orchestrating a “witch-hunt” against the top brass. Another countered that, claiming the alleged mismanagement “goes right to the top.”
The council has conceded that “there were issues with the quality of data submitted” to the industry regulator Ofgem, “which resulted in income being lost and delays with payments being received.”
A spokeswoman for the council said the issue was discussed in private “to enable members to consider the issue fully without prejudice to outstanding legal proceedings.”
A biomass contractor is currently embroiled in a legal dispute with the council which has subsequently launched a counter claim. It is understood that part of the action involves a claim concerning the council’s administration of the RHI scheme.
At its peak, Highland risked missing out on cumulative payments of £1,142,702 for 2012-13 to 2015-16.
The figure has since been revised downwards and the council calculates that it is “potentially due” £776,142 after reassessment of some quarterly claims withheld or “disallowed.”
A document obtained by the P&J reveals that the audit sought assurance that a “robust and manageable process” was in place for providing the necessary information about the RHI scheme for which the council receives income for heat generated by its biomass boilers in a porfolio of properties it owns including recently built schools.
The inquiry was prompted by Ofgem questioning “the reliability and accuracy of information” based on meter reading data.
The fiasco surfaced several years ago, a timeline that numerous councillors highlighted at the meeting.
The council established a “data management improvement project” to address the problems.
A cross-party working group is now expected to report to a full council meeting at the end of this month.
Highlands and Islands Green MSP John Finnie said: “It’s deeply disappointing that public money that could have been paying for vital sevices has been missed, I hope not permanently.”
Ofgem declined to comment on an individual case but a spokesman said: “Where we have permanently withheld or recovered payments, on the basis of being satisfied that those payments were not due to a participant, we will inform the participant of this setting out our reasons.”
The council may not be too late to recoup some of the money.
“If, for example, three years later a participant who had payments suspended produced fresh evidence that couldn’t be provided at the time we would look at things again,” the spokesman said.
Resources committee chairman Bill Fernie said: “A lot of questions have been asked. More will be asked in the next couple of months. Eventually it will all come out.”
Audit and scrutiny committee chairman Richard Laird said: “The committee wants information about a few outstanding issues and there’ll be a follow-up report in due course.”
SIDEBAR
The Renewable Heat Incentive scheme
The RHI scheme was created in 2011 to promote “renewable” heat. It earns a fixed income for each kilowatt hour of heat produced.
The sums are paid quarterly by the Treasury for a 20-year period to the installations’ owners.
Meter readings must be made within three days of a due date and submitted online within a month.
According to a confidential council document, the authority expects to recoup £411,417 of belated subsidies still outstanding if Ofgem is “satisfied that all queries have been resolved.”
