Defra and RPA slammed over payments fiasco

The National Audit Office (NAO) has revealed a catalogue of failures and mismanagement by both Defra and the RPA management that has led to upwards of £200million in unexpected costs and the prospect of a further £131million in EU fines for payment errors.

The report found Margaret Beckett, who was Defra Secretary at the time, and Lord Bach, the then farming minister, continually rejected contingency plans. This was despite warnings that the payment system had little chance of being ready on time.

Defra and the RPA were accused of making a “pig's ear” out of the payment process and bringing unnecessary distress to many farmers. Specifically the report blames them for:

• Failing to appreciate the risks and complexities involved in implementing the English model of the Single Payment Scheme.

• Over-optimistic upward reporting and a failure to show the true state of progress.

• Enforcing staff cuts leading to an over-reliance on inexperienced temporary and agency staff to clear the backlog of claims, some of whom were later caught up in allegations of depraved behaviour at RPA offices.

The NAO said there was now little prospect of Defra delivering the huge efficiency savings it had envisaged when introducing the new payment system.

It said estimates of £164million in cost savings had been replaced by more than £100 million in additional costs.

The most inexcusable of these came when pre-planned staff reductions, costing £38.9million to implement, had to be quickly followed by a £14.3million outlay on hiring new staff as the workload of unprocessed claims became unmanageable.

The financial blunders exposed in the report have already forced Defra to impose damaging budget cuts across its department and agencies and it has not ruled out further cuts next year.

Opposition MPs this week called for Defra Ministers to be held accountable for the mess and expressed dismay that Mrs Beckett had been promoted to the Foreign Secretary.

“The failure to make payments on time has not only cost farmers, but also the taxpayer, who will ultimately foot the bill for the Government's incompetence.

“Ministers cannot escape their share of the blame,” said Shadow Farming Minister Jim Paice.

MPs and farming groups urged Defra secretary David Miliband to make an urgent decision on part payments to avoid a repeat of the delays for the 2006 farm payment.

“If ministers take the same ‘wait and see' approach this year, in the vain hope of being able to make full payments some time in the spring, we will end up in the same mess again.

“Ministers need to learn the lessons, bite the bullet and press the part payment button,” said NFU president Peter Kendall.