Millions of pounds of public money is being misspent because of „abuse” of green energy schemes, a whistleblower from the energy regulator Ofgem claims. Edd Fyfe, a former counter-fraud officer, alleges big businesses exploited weaknesses in the management of schemes to make huge profits.
He claims some firms offered people incentives to redirect money to firms and that Ofgem failed to deal with it, according to BBC. Ofgem says its systems are designed to prevent error or fraud. It added that it takes action in any cases identified and ensures public money is spent properly.
‚Bled the scheme dry’
Mr Fyfe worked as a manager in compliance and counter-fraud between 2013 and 2017 for Ofgem E-Serve, a branch of the energy regulator which approves and polices green energy subsidies across the UK. He was particularly concerned about the Domestic Renewable Heat Incentive, which is intended to encourage householders to use greener alternatives to fossil fuels.
Mr Fyfe says that there was „industrialised” subsidy-claiming among some firms. In return for „free” biomass boilers, they induced householders to sign away their generous incentive payments. „They were getting paid many millions and millions of pounds, the return on investment was absolutely huge, but they bled the scheme dry,” he says.
Mr Fyfe alleges that there were poor levels of oversight and control. He says when he reviewed cases where subsidies had been awarded, he would find 50% or sometimes 60% did not comply with the Ofgem guidelines, and some involved serious abuse. He says his bosses did not always respond well when he told them what he had found.
Mr Fyfe felt there were pressures within Ofgem senior management because there was seen to be „a risk of the management of those schemes being taken away from Ofgem and contracted out to a private company”. He argues that controversial business models arose between 2014 and 2017 where some companies would require homeowners to sign leases on their property as part of an agreement to supply the boiler. The subsidy money then went to the company.
Mr Fyfe said that at the time, the Ofgem legal team said those so-called „third-party models” were not allowed. However, he said: „There was a huge drive to get as many applications through as possible. There simply were not checks getting done. They were processed willy-nilly”.