`Cash for Ash' Scandal Returns to Dog May's Northern Irish Ally

(Bloomberg) -- U.K. Prime Minister Theresa May’s Northern Irish ally was thrust in the spotlight for her role in a botched green energy plan after a financial watchdog said the scheme was still flawed.

On Friday, Northern Ireland’s Auditor General Kieran Donnelly said about 40 percent of boilers linked to the plan were in use for an average of more than 12 hours per day, seven days a week. The “cash-for-ash” scandal arose with the 2012 introduction of subsidies without caps, which created an incentive for people to run their boilers around the clock.

It was Arlene Foster, the leader of the Democratic Unionists propping up the Conservatives, who oversaw the scheme that burned a hole in the public finances. She denies any wrongdoing, but the report is a fresh source of potential embarrassment for her during a delicate time in British politics. May relies on Foster’s 10 lawmakers in Westminster to pass laws.

There are also repercussions back home in Belfast. In January, Sinn Fein pulled out of the region’s power-sharing parliament and demanded Foster step aside pending a public inquiry into how its costs spiraled. Talks about reviving the assembly are ongoing.

The auditor general’s report highlights a raft of flaws within the scheme, which subsidizes renewable fuels. The plan offered an incentive for users to install renewable heat systems, including biomass boilers, burning wood pellets. In some case, the subsidy is more than the cost of the fuel, meaning it paid to burn as much fuel as possible.