Press Release - The accounts of the Department for Environment,
Food and Rural Affairs and of the Rural Payments Agency
2009-10
28 July 2010
Amyas Morse, the Comptroller and Auditor General, has today
qualified the respective accounts of the Department for
Environment, Food and Rural Affairs and of the Rural Payments
Agency. Defra's accounts have been qualified on the grounds of
regularity, because of penalties totalling £160 million from the
European Commission.
Both the Rural Payments Agency's and Defra's accounts have also
been qualified on the grounds that the Agency has not been able to
make an accurate assessment of the value of overpayments and
underpayments which have been made to farmers since the Single
Payment Scheme began.
During 2009-10, the European Commission confirmed disallowance
penalties of £160 million because EU regulations have not been
applied correctly in the processing of EU schemes. The disallowance
includes penalties of £132 million in respect of the administration
of the Single Payment Scheme in England in 2005, 2006 and 2007.
Defra's accounts also include provision for a further £220 million
of disallowance penalties, including £171 million for the Single
Payment Scheme in England in 2007, 2008 and 2009.
Disallowance penalties have been incurred as a direct result of
weaknesses in the management and administration of the Rural
Payments Agency, particularly for the early years of the Single
Payment Scheme. The Agency continues to experience considerable
difficulties in quantifying the value of overpayments and
underpayments made to farmers under the Single Payment Scheme.
Amyas Morse, head of the National Audit Office, said
today:
"This is the second time we have qualified the accounts
of the Department for Environment, Food and Rural Affairs on
regularity grounds. Material sums have been used for purposes not
intended by Parliament, in this case paying penalties for
maladministration to the European Commission. Qualifying the
accounts of the Department on this basis indicates that the values
concerned are very considerable, meaning that there has been
significant loss to the taxpayer."
Notes for Editors
- During 2009-10 the European Commission confirmed disallowance
penalties of £160 million. This includes penalties of £132 million
in respect of the administration of the Single Payment Scheme. The
residual penalties confirmed during 2009-10 relate to cross
compliance penalties (£14 million) and the administration of the
Rural Development Programme for England in 2006 (£3 million). In
addition, the European Commission has confirmed a disallowance of
£11 million in respect of the administration of the Single Payment
Scheme in Northern Ireland.
- The Single Payment Scheme was introduced by the Member States
of the European Union as part of the Common Agricultural Policy
reforms which replaces 11 separate crop and livestock based
production subsidies with a single payment based on land area. The
scheme is administered by the Rural Payments Agency and overseen by
DEFRA.
- The NAO has published three Value for Money reports on the
Single Payment Scheme: The delays in administering the 2005 Single
Payment Scheme in England (HC 1631, 2005-06), A progress update in
resolving the difficulties in administering the Single Payment
Scheme in England (HC 10, 2007-08), and A second progress update on
the administration of the Single Payment Scheme by the Rural
Payments Agency (HC 880, 2008-09).
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard copies can be
obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Amyas Morse, is the head
of the National Audit Office which employs some 900 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 54/10
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