The Parliamentary Ombudsman has criticised the Department for the Environment, Food and Rural Affairs’ (Defra’s) handling of the scheme after upholding complaints from nine farmers, including four from the East of England, who missed out on payments they were entitled to.

The complaints related to administration of the scheme in 2005 and 2006 by the Rural Payments Agency (RPA).

In a new report presented to Parliament and published this week, the Ombudsman sets out the findings of her investigation into complaints, including that the RPA provided poor quality and sometimes ambiguous guidance on how to make a claim and failed to return applicants’ phone calls when this had been promised.

There were also complaints it had misdirected applicants about the status of their cases, delayed letting applicants know that they would not be paid and did not explain its decisions properly.

In one case, a farmer misunderstood the new form and only claimed a subsidy for the year 2005. She did not activate her claim and subsequently did not receive a payment. No one questioned her mistake, even though RPA knew this was a common error by farmers. Losing a payment of more than £13,000 left the farmer unable to pay all her bills and reliant on her partner’s goodwill.

In another case, a farmer misunderstood the new form and did not activate his claim, but was then led to believe by the RPA that he would be paid, but was not. He had to increase his overdraft.

The farmers will receive a written apology from Defra and compensation of £500 for the inconvenience, distress and frustration they experienced.

Ombudsman Ann Abraham said: “Amid the confusion of a new system, these nine farmers made innocent mistakes in their claims for financial support. The farmers realised their mistakes only when their payments did not arrive at all, or fell far short of the amounts expected. By then it was too late for the farmers either to correct their mistakes or to plan ahead for having thousands of pounds less money than expected.”

It was the second time the ombudsman had investigated problems suffered by farmers as a result of poor administration of the scheme, but in 2009, it took the intervention of the Public Administration Select Committe before the RPA would take action to remedy the injustice, she found. This time, the response from the RPA and Defra had been “very different” she said, with her recommendations being accepted in full.