Environment, Food and Rural Affairs Committee

Session 2005-06

Tuesday 24 January 2006


Tuesday 24 January 2006

MPs SLAM MINISTER FOR COMPLACENCY OVER LATE PAYMENTS TO FARMERS

The Commons Committee on the Environment, Food and Rural Affairs today announces that it is deeply unimpressed by the failure of Defra and the Rural Payments Agency (RPA) to plan properly for the process of administering payments to farmers under the new Single Payment Scheme.

The Committee is dismayed at the complacency of Defra Minister, Lord Bach, who refused to admit that any mistakes had been made or that anything could have been done differently to avoid the problems. Most significantly, the MPs on the Committee were staggered that, so close to the proposed date for making payments, and nearly a year after that date was announced by the RPA, the Minister could still not give a definitive statement about when full payments would be made, or whether farmers would instead initially receive partial payments.

The Committee also felt that the Minister appears to have shown an unacceptable degree of complacency about the financial impact on the industry of a delay in making the SFP. For individual businesses, on the margins of viability, the added costs of interest and arrangement fees could be too much to bear. It would be unacceptable if farms were put out of business due to delays by the RPA in making payments, and the Government should make clear what steps it intends to take to ensure that this does not happen.

The Committee accuses Defra of giving insufficient consideration to the administrative complexity of the chosen model for implementing the Single Farm Payment (SFP) in England. The lack of foresight shown by the RPA, and the apparent lack of analysis about the possible impacts of the implementation model, are also thought to be unacceptable.

The Committee is particularly concerned about the IT problems encountered by the RPA and regrets that the Government appears to have taken little notice of its previous warnings on this subject. The MPs on the Committee were also alarmed to learn about the scale of the cost overrun on the revenue side of the RPA's IT contract with Accenture, given that it amounted to a doubling of the original budget.

Today's report represents the interim findings of the Committee. It is being issued in the hope that it will encourage Defra to sort out the problems at the RPA in such a way that full payments will be made to farmers as soon as possible.

Michael Jack, Chairman of the Committee, said:

Lord Bach's statement that some form of payment will be made by the end of February does not absolve him, his department or the RPA from the criticisms we have made about the lack lustre way they planned to introduce the new SFP. My Members were taken aback at the lack of appreciation, in planning the new system, of the volumes of extra work it would create, especially when it was Defra which was at the heart of agreeing the policy that underpins the SFP. The result of these failings is extra cost and more worry for England's farmers and a bill for the taxpayers of an extra £18 million to cover the 100% increase in the running costs of the systems tasked with delivering the new payments. I am looking forward to the Committee being able to publish its full report into this debacle when we can spell out in more detail the story of the botched delivery of the SFP.

David Taylor, rapporteur on the RPA inquiry, said:

Despite the heroic endeavours of RPA professional staff, this project has been beset by serious and chronic difficulties.

It is most disappointing to find that there has been no apparent remedial action by top management or by Ministers in response to previous Select Committee criticism about ICT systems procurement. This is not the quality of service that the English agricultural community need and deserve. Nor is it good value for the taxpayer, who is again being asked to pick up the tab because of a failure to properly specify, design and control a major public sector computer development.

Roger Williams, rapporteur on the RPA inquiry, said:

We are very disappointed that the Rural Payments Agency has not given a definite date for the full payment of the Single Farm Payment so late in the payment window. We are also very disappointed that Defra did not anticipate the complexity of the scheme and did not consider deferring its implementation for a year.

NOTES FOR EDITORS

For more information or to arrange bids for the Chairman of the EFRA Committee, Rt Hon Michael Jack MP, or the two rapporteurs, David Taylor MP and Roger Williams MP, please call Laura Kibby on 07917 488 557.

The report follows initial investigations into the work of the Rural Payments Agency, by the two rapporteurs, David Taylor MP and Roger Williams MP. They were appointed by the Committee as rapporteurs in October 2005. As part of their investigations, the rapporteurs conducted an informal visit of the RPA's Headquarters, in December 2005.

The rapporteurs received written evidence from a number of interested parties. On 11 January 2006, the full EFRA Committee took oral evidence from Lord Bach (Minister for Sustainable Farming and Food) and Mr Johnston McNeill (Chief Executive of the RPA). An uncorrected transcript of this evidence session can be found at:

http://www.publications.parliament.uk/pa/cm200506/cmselect/cmenvfru/uc812-i/uc81202.htm

The full interim report will be available on the Committee's website soon after 00.01 am on Tuesday 24 January 2006. Website: www.parliament.uk/efracom

The publication of this brief interim report is designed to set out the Committee's immediate concerns about the performance of the RPA and Defra in preparing for the implementation of the new Single Farm Payment. A fuller report of the Committee's investigations into the RPA, including the written evidence received during the inquiry, will be published in due course.