From The Times
December 16, 2009

Defra blamed for bungled payments to farmers after reform of CAP

Valerie Elliott, Countryside Editor

A parliamentary inquiry today heaps blame on ministers and officials at the Department for Environment, Food and Rural Affairs for continued bungling over the payments made to farmers after reform of the Common Agriculture Policy four years ago.

The poor and complacent oversight of the £1.6 billion-a-year cash paid to English farmers is considered so “wholly unacceptable” that the department has been given until the end of next month to deliver a plan to overhaul the system, which is the responsibility of the Rural Payments Agency.

It is the third time the Commons Public Accounts Committee has had to investigate failings over the handouts to farmers since 2005.

The inefficiencies are starkly illustrated by the estimated £1,743 cost to process each farmer’s claim for payment, a rise of 20 per cent in four years. This is six times the £285 cost for administering payments in Scotland.

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Edward Leigh, Tory chairman of the committee, was scathing. He said: “It is an extremely serious charge from this committee that negligible attention has been paid to taxpayers’ interests.”

Besides the high costs for processing payments, MPs are worried about about the agency’s cumbersome £350 million computer system, which has so many embedded mistakes that it is at risk of becoming obsolete.

MPs stop short of calling for heads to roll but raise serious questions over the future of the agency and the scrutiny of its operations by Defra.

Many of the problems are due to the complicated payment system chosen by Margaret Beckett, the former Rural Affairs Secretary, which rewards farmers for the amount of land that they keep in good stewardship. The devolved regions opted for a simpler system based on the historic payments made to farmers.

Hilary Benn, Rural Affairs Secretary, has already ordered a review of the agency. One option may be to scrap it and to contract the farm payment system to a private company.

Another may be to free the agency of other responsibilities. For example, it makes payment for agri-environment schemes monitored by Natural England, the Government’s landscape adviser.

In a further humiliating rebuke to Defra and the agency, the parliamentary ombudsman, Ann Abraham, publishes a special report today criticising them for failing to pay compensation to farmers who suffered financial losses from the maladministration of the single farm payment scheme.

She had ordered the payment of £3,500 to one farmer and £5,500 to another for a combination of stress, heartache, anxiety and cumulative financial losses and suggested that another 22 cases may also qualify for similar amounts.

Defra is only willing to offer a maximum of £500 to each farmer.

Ms Abraham, in a rare special report to MPs, has put her dismay on record: “Important principles are at stake here. My view is that an appropriate remedy should be forthcoming where injustice has been suffered as a consequence of maladaministration by a public body.”