Major funding shortfall threatened other SEAI grant schemes

The Government’s ability to pay grants for three energy-saving schemes was cast into doubt earlier this summer when officials identified a €20 million funding shortfall blamed on “unprecedented demand”.

By the end of July, the Government’s grant schemes for electric vehicles, solar panels and energy-efficiency home improvements had drawn down 80 per cent of their budgets for the entire year.

Last week, the Sustainable Energy Authority of Ireland (SEAI) announced it was ending a deep retrofit scheme for homes, as it did not have enough funding to continue to pay out grants.

Following political backlash, Minister for Communications, Climate Action and Environment Richard Bruton reversed the decision, which would have had a major financial impact on 300 households who had applied before the scheme's closing deadline, but whose grants had not yet been approved.

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Internal Department of Communications, Climate Action and Environment documents reveal three further SEAI grant schemes were at risk of running out of funds last month.

The schemes were under pressure due to an “unprecedented increase in demand”, according to minutes of a department management board meeting on June 18th.

Reallocation of funds

Senior officials sought approval from Mr Bruton to reallocate funds from other areas to the SEAI “as a matter of urgency”, the minutes, released under the Freedom of Information Act, reveal.

Department secretary general Mark Griffin asked senior officials in several divisions "to examine the potential for further surrenders in their areas".

In early July, Mr Bruton reallocated €20 million to the SEAI to prevent a funding shortfall in the three schemes.

One scheme providing grants of up to €5,000 towards electric vehicles had drawn down €14.5 million of its €18 million budget by late July, figures show. Demand for the scheme increased dramatically in recent years, up from 550 grants in 2015, to 2,000 last year. That figure was surpassed in the first seven months of this year alone, with 2,992 people availing of the offer.

The department would have to consider “measures to mitigate upward financial pressure and manage the level of ongoing demand” for the schemes, the June meeting minutes noted.

No additional budget

The Department of Public Expenditure had been clear no additional budget would be provided to the department, head of finance Finola Rossi told the meeting. “Unforeseen or unplanned expenditure pressures will have to be met through savings in other programme areas,” the minutes said.

In a statement, a spokeswoman for the SEAI said that due to the nature of many schemes, “market demand can vary above or below predicted profiles”.

The authority “keeps budgetary funding under constant review”, she said.

Decisions around budget allocations were ultimately made by the department, “with SEAI acting as delivery agent”, the spokeswoman said.

The SEAI had been aware since the second quarter of this year that its retrofitting scheme did not have sufficient funds to commit to all projects, but continued to encourage applications.

The Government came under fire for failing to disclose known funding issues with the scheme, prior to the controversy becoming public last week.

Alan Kelly, vice-chairman of the Dáil Public Accounts Committee, said it was apparent there were "serious issues around financial management and communication" with the schemes.

The Labour TD said the issue would be raised at a meeting of the Oireachtas public spending watchdog next month.