Northern Ireland's government has come under fire from the Audit Office for failing to properly manage the renewable energy heating incentive scheme, with serious and systematic failings flagged up in the auditor's report. The criticism relates to the RHI scheme, which was administered by the Department of Enterprise, Trade and Investment. Consequently, £140 million of funding is going to need to be found from the Treasury and is likely to be diverted from other public projects.

The minister for the economy said that the news was 'shocking'. The Renewable Heat Incentive was put in place to incentivise homeowners and businesses alike to invest in biomass heat systems, primarily burning sustainable wood chips and pellets. Through the scheme, over £1 billion of public funding is set to be paid out over the next two decades in the form of subsidy payments.

A whistle-blower raised the alarm, however, in January, contacting the NI Executive to allege that the scheme was being poorly managed and subject to abuse. One specific example suggested that a farmer had been approved to collect over £1 million in subsidy payments over a 20-year period for installing a biomass system to heat an empty agricultural shed. Other allegations suggested that large and previously unheated factories were installing the boilers with a plan to run them continuously and collect similarly large subsidy payments - with vast ongoing costs to taxpayers.

The report explained that a business eligible for the RHI in the UK would collect under £200,000 in 20 years by using a biomass boiler throughout the year - but an NI business adopting the same approach would net around £860,000.

Further investigations are now in progress to ascertain where failings have taken place and to determine their nature.