Press Release - DEFRA: A progress update in resolving the
difficulties in administering the Single Payment Scheme in
England
12 December 2007
The Rural Payments Agency has made good progress, but still has
more to do to resolve all the problems it experienced in
administering the 2005 EU single payment scheme to farmers in
England, according to a report by the National Audit Office. It
succeeded in meeting the June 2007 deadline for paying claims under
the 2006 scheme. However, the Agency has not yet made up the
difference to all those claimants who were paid too little in the
first year, nor recovered the sums from those farmers who were paid
too much.
In the first year of the scheme (the 2005 scheme), the Agency
had experienced considerable difficulties in capturing and
processing the information about farmers’ land areas and failed to
meet its own target dates and EU June deadline for making payments
to farmers. Financial hardship was the result for a significant
minority of farmers and the Chief Executive of the Agency at the
time was removed from post.
The Agency made a commitment to pay farmers who had received
partial payments or who were yet to receive any payment under the
2005 scheme by the end of 2006 and to implement its recovery plan
by April 2008. In the event, the backlog of outstanding payments
for the 2005 scheme was almost wholly cleared by December 2006.
Today’s progress report by the NAO recognises the clearer sense
of direction and drive that the management team has brought to the
organisation. The Agency has also undertaken a substantial exercise
to identify overpayment and underpayment errors in calculating
entitlements for the 2005 scheme.
The Agency found errors in the original calculations of farmers’
entitlements to money for the 2005 scheme in a substantial number
of some 34,500 cases it identified as at risk. The overpayments
made in the 2005 scheme, which the NAO estimated at up to £6.8
million, have largely been repeated in the 2006 scheme payments.
Together with the estimated underpayments of £19.3 million, the
risk of the EU imposing a disallowance penalty remains; and the
Department for Environment, Food and Rural Affairs has consequently
increased its provision for such an event from £139 million in
2005-06 to £292 million in 2006-07.
The Agency managed to process 98 per cent by value of payments
for the 2006 scheme by the end of June 2007. But farmers in Wales,
Scotland and Northern Ireland, like those in Finland and Germany,
continue to receive their payments earlier than farmers in England.
Our survey of farmers found that 61 per cent of respondents were
satisfied with the Agency’s handling of the scheme this year,
compared to 39 per cent last year. Eighty per cent of farmers
believe their entitlement statements were correct though some
continue to question the accuracy of the data used to calculate
their entitlements.
The NAO notes that the Agency has developed a detailed recovery
plan to deliver improvements – but warns that implementing the
necessary changes to business processes and the enhancements to
computer systems needed to support them remains challenging. The
Agency’s current plans include the flexibility to accommodate known
amendments to the scheme required by the European Commission.
However,there is little room for manoeuvre in case of any
significant unforeseen events such as additional policy changes to
the scheme by the EU.
Head of the National Audit Office Sir John Bourn said
today:
"Since my report over a year ago on the implementation of the
Single Payment Scheme, the Rural Payments Agency has made
encouraging progress in remedying the problems I highlighted, as
demonstrated by an increase in farmers’ satisfaction with the
handling of their claims.
"But, until the Agency is in the position consistently to meet the
June deadline each year and can process payments within an
acceptable tolerance of error, the risk is that farmers’ confidence
in the scheme will wane and the European Commission will levy
financial penalties."
Notes for Editors:
- 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, Sir John Bourn, is the
head of the National Audit Office which employs some 850 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 61/07
All enquiries to Barry Lester,
NAO Press Office: Tel: 020 7798 7937
Mobile: 07748 181 692