A National Audit Office report today highlights the lessons arising from the case of a farmer who committed one of the largest known frauds by an individual claiming subsidy under Common Agricultural Policy schemes in England. In October 2000 Joseph Bowden was sentenced to 30 months imprisonment for nine charges relating to false accounting and deception in respect of some £131,000 of public money and private insurance claims of some £26,000.
Most of the charges were in respect of duplicate claims in 1994 to 1997 under the Arable Area Payments Scheme, administered by the Ministry of Agriculture, Fisheries and Food (now the Department for Environment, Food and Rural Affairs) and the Fibre Flax Subsidy Scheme, administered by the Intervention Board Executive Agency (now the Rural Payments Agency). Checking carried out by the Ministry and the Board at that time did not identify problems with the claims. For example:
- map references included in documentation relating to fibre flax, meant some of the areas of land claimed for were not on the UK mainland, but in Iceland, Greenland or in the North Sea;
- claims or declarations were made under the Arable Area Payments Scheme and the Fibre Flax Subsidy Scheme for harvested crops which in part covered the same areas of land; and
- an ineligible claim for grant for building a barn under a European programme for encouraging business in rural areas only came to light, and payment was only prevented, through the chance transfer of one of the Ministry’s staff from the branch handling arable crop claims to the branch handling the rural business scheme.
Mr Bowden’s activities (involving claims under EU schemes and insurance policies amounting in total to some £600,000 over a 3 year period) started to come to light in May 1996 after a tip-off was passed to the Ministry. Whilst the tip-off was inaccurate, the field inspector sent to check the arable area claim was the same officer who the previous year had visited in connection with a fibre flax claim. An investigation by the Intervention Board’s Anti-Fraud Unit began in 1996 and eventually led to charges in 1999.
In 1996, the Ministry decided to delay recovery proceedings until after the outcome of any Court case. In November 1998 Mr Bowden was in financial difficulties and entered into an Individual Voluntary Arrangement with his creditors. By March 2000, MAFF had recovered only £1,325 under this arrangement. No further monies were received or expected and the Ministry has written off some £111,000 (amounts actually paid plus accrued interest) in respect of the offences on which he was found guilty.
The Department and the Agency have introduced new controls over the operation of Common Agricultural Policy schemes to help prevent similar frauds in future. For example, there is now a single system which enables cross checks to be made for duplicate claims for the same areas of land; and map grid references are checked as a matter of routine. New systems under development by the Agency should increase the level and ease of automated checking.
The report identifies the lessons from the case. These include:
- the need for data matching and greater joined-up working where more than one branch or agency of the same government body are paying subsidies and awarding grants on common criteria, for example land usage; and
- as far as data protection laws permit, staff responsible for administering schemes in other parts of the Department and its agencies should be notified at the earliest opportunity of suspicions about a claimant, and cross checks carried out to identify whether the person has submitted suspect claims under related schemes.