Benn finally caves in over SPS compensation payments

Mr Benn caved in to mounting pressure to pay up after he was told he was about to be hauled before a committee of MPs unless Defra changed its stance on the issue.

The farmers, known as ‘Mr W’ and ‘Mr Y’ will receive payments of £5,500 and £3,500, in line with recommendations made by the Parliamentary Ombudsman.

A further 22 affected farmers lined up behind the two lead claimants will now have their claims investigated to establish if they are also eligible for compensation.

Defra infuriated the Ombudsman, Ann Abraham, by refusing to accept her recommendation to pay the farmers at the end of last year.

She had found Defra and the Rural Payments Agency (RPA) guilty of ‘maladministration’ in their handling of the 2005 SPS. She described her remedies as ‘modest’ and expressed astonishment that the Department refused to accept them, claiming there was ‘no basis’ for making the payments.

The case was picked up by the Public Administration Select Committee (PASC), who interviewed some of the key players, including Defra Permanent Secretary Helen Ghosh and Ms Abraham, in January.

Following the hearing PASC chairman, the MP Tony Wright, wrote to Mr Benn urging him to reconsider.

Dr Wright described Defra’s actions as ‘almost unprecedented’, given the small sums at stake. He warned that if there had been no new announcement by the end of February, he would consider asking Mr Benn to ‘explain the existing position’ to the committee in March.

In his response, Mr Benn said he had ‘now had the opportunity to reflect on the discussions both at your committee and subsequently between the Dame Helen Ghosh and Ann Abraham’.

“I believe these have helped to address our concerns on the need to protect taxpayer interests and, consequently, to be clear about the basis on which any compensation payments are made. I am pleased, therefore, to confirm that we can now accept the recommendations in the report in full,” he said.

He said the additional compensation recommended for Mr W and Mr Y would be paid ‘as soon as possible’.

Defra will work with the Ombudsman’s office on the remaining 22 complaints ‘to assess what are the most appropriate and cost-effective remedies to their particular circumstances’, he said. The process is expected to take about three months.

He stressed, however, that due to the statutory time bar affecting the Ombudsman’s work, ‘there should not be a snow-ball effect beyond these 24 cases’.

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