On Wednesday, the EFRA Select Committee, which oversees the work of Defra and its arms-length bodies warned of the effects that ongoing delays to farm payments are having on farmers, whilst the Public Accounts Committee (PAC) revealed that the bungled payments system could cost taxpayers millions.

The two committees published reports on the same day, both dealing with the IT issues and delays to farm payments at the Rural Payments Agency (RPA). In its report, the EFRA Committee said payments have been delayed due to an inadequate online application system.

The EFRA Committee report deals primarily with the effects of falling farm gate prices, giving the results of an inquiry launched in September 2015. Committee chair Neil Parish said,  “Many producers rely on CAP payments to turn a profit so it is unacceptable that our farmers are still facing lengthy delays to financial support.

“The RPA introduced an IT system that wasn’t fit for purpose and subsequent errors made in the attempt to fix the problem only caused further delays and confusion for applicants. We welcome the efforts being made to solve this problem and reduce delays but it is crucial that the RPA works to at least match the target achieved by the previous scheme of 90% of payments made by the end of December each year.”

The Committee’s recommendations on farm gate prices include ensuring farmers know they can strengthen their position through collective action as part of a producer organisation. MPs also questioned supermarkets’ assurances on milk prices and pronounced that “Farmers must not be the victims of the supermarket [price] wars currently taking place in the UK.”

The recommendations can be viewed in full here.

PAC report suggests intra-government ‘turf war’

The reports, which come just days after RPA announced that applicants can begin their 2016 Basic Payments Scheme (BPS) applications from the first week of March, offer a damning insight into the relationship between RPA staff and the Government’s Digital Service, which led moves to bring applications systems online. 2015’s BPS was the first for the new scheme, following EU Common Agricultural Policy reforms, and RPA was forced to track back and accept paper forms after IT errors scuppered plans to make the application process ‘digital by default’.

In its report, the Public Accounts Committee warned that failures in the Common Agricultural Policy Delivery Programme could cost the public purse hundreds of millions of pounds. The programme’s costs have risen by 40% compared to early estimates, climbing to £215 million, and penalties from the European Commission are expected to increase costs further.

Like the EFRA Committee, the PAC noted that "many farmers are being paid later than in previous years" and said changes driven by the Government’s Digital Service were "inappropriate for farmers,” pointing out that failure elsewhere to improve broadband coverage means "there is poor broadband coverage in many rural areas”.

The report also reveals details of a high-level spat between civil servants in different departments charged with delivering the payment programme. It mentions "dysfunctional and inappropriate behaviour" between senior officials, which MPs said were “inexcusable” and “hindered delivery” of the programme.

On Wednesday, PAC chair Meg Hillier slammed the payments project as “An appalling Whitehall fiasco.” She said, “It was frankly embarrassing to learn of senior and highly paid civil servants arguing to the detriment of hard-pressed farmers.”

Hillier said MPs taking evidence had encountered explanations for communication breakdowns between Digital Service and Rural Payments employees including 'We worked on different floors' and 'We dressed differently' which she said “Are a slap in the face to [farmers] and a dismal excuse for failures that could severely hit the public purse.”

 She continued,  “A fundamental part of setting up this Programme should have been to establish a clear and robust vision of the final product, focused on the needs of farmers. For it to end up as a digital testing ground was wrong-headed. The enduring mental image is of managers, having seemingly lost sight of the purpose of the project, devoting their energies to a childish turf war instead.”

Like MPs on the EFRA Commitee, Hillier and the PAC MPs also said Defra and its subordinate bodies should set out “clear milestones” for when payments can be expected in future years. The RPA’s vague targets for 2015 payments, like making the ‘vast majority’ of payments by the end of January, were frequently criticised by frustrated farm groups.

Hillier added, “If the Department is to build trust in this Programme and other projects it first needs to rebuild trust with farmers. That starts with setting out exactly when it expects to pay them in future and we will be expecting the Department to address this as a matter of urgency."

Responding to questions about the ‘turf war’ mentioned in The PAC report, a Defra spokesperson said, “The new Common Agricultural Policy (CAP) is widely acknowledged as the most complex ever and the task of setting up a new IT system to handle this additional complexity was a significant challenge. Throughout this period the collective focus has always remained on getting payments out to farmers as quickly as possible.
 
“In March 2015 there was a problem with one part of the online interface that enabled farmers to put data directly into Rural Payments, but the core of the system has always worked. Over 87,000 farmers registered on the system and it has been used to process and pay over 70,800 farmers – over 80% of all those eligible –  their 2015 Basic Payment Scheme payment, totalling £1.11 billion.”
 
The spokesperson continued, “Almost all farmers in England will be paid by the end of this month and the Rural Payments system has been further improved for 2016 to make it easier for farmers to apply for CAP payments.”

Responding to the PAC report, the NFU said that trialing the online application system highlighted the serious problems associated with unreliable, and in some cases non-existent, rural broadband and put administrative burdens onto farmers when it failed.  Union vice president Guy Smith said, “At the moment there are still farmers who haven’t been paid despite promises to pay the vast majority of claims by the end of January. We are urging the RPA to tie off all of the 2015 payments so RPA resources can focus on BPS 2016 applications. 

“We are on the eve of the rollout of the 2016 application process and the industry cannot afford any problems in the coming weeks. We are working to a May 16 deadline and there can be not slippage - if there are any problems, the RPA needs to be honest with industry.”