FIRST SPECIAL REPORT
The Agriculture Committee has agreed to
the following Special Report:
The Committee has received the following memorandum
from the Ministry of Agriculture, Fisheries and Food, constituting
the Government's Reply to the Ninth Report from the Committee
of the 1998-99 Session, MAFF/Intervention Board Departmental Report
1999, made to the House on 26 October 1999.
* * *
Recommendation 1 - We reiterate our recommendations
that the fishing safety grants scheme and the fish processing,
marketing and port facilities schemes be reinstated in order to
enhance the competitiveness of the UK sea fishing industry.
1. The Government is considering the issue of reinstating
these schemes, in particular in the context of any funding available
for the programme of structural measures for application during
2000/2006, for which the Fisheries Council is negotiating the
implementing regulation.
Recommendation 2 - We recommend that MAFF ring
fence its R&D budget to guarantee that there are no further
reductions in this area.
2. We note the Committee's recommendation. MAFF is
committed to undertaking a full programme of research and development.
However, as the Committee acknowledges, the CSR settlement requires
the Department to work within exceedingly tight budgetary constraints.
As additional priorities place additional demands on the Department's
budget, all areas of the Department's expenditure, including R&D,
are subject to close scrutiny and reprioritisation.
Recommendation 3 - Our concerns over last year's
settlement proved prescient and we are far from reassured that
further programme cuts will not be demanded this year. Any adverse
impact upon the service provided by the Ministry to consumers
and producers would be especially deplorable at such a difficult
time in the agriculture, food and fishing industries.
3. We note the Committee's recommendation and acknowledge
the difficulties many in the farming industry are currently facing.
The Ministry is committed to ensuring that it delivers its public
service requirements efficiently within the tight financial constraints
imposed by the CSR.
Recommendation 4 - We expect MAFF to examine rigorously
other heads of expenditure to ensure maximum efficiency in delivering
policy objectives.
4. MAFF is committed to ensuring maximum efficiency
in delivering its policy objectives. As part of this ongoing commitment,
large scale reviews are currently underway examining CAP scheme
administration and the use of IT. These form part of the Department's
Better Quality Services programme for reviewing all of the Department's
services and activities. Over 60% of the programme, by value,
will be completed by March 2003.
Recommendation 5 - The Foreign Affairs Committee
recommended that there should be just two sets of objectives for
the FCO: one annual, one for three years. This seems to us a sensible
suggestion as it allows for annual assessment of progress as well
as planning for the whole of the CSR period. We therefore make
a similar recommendation in respect of MAFF.
5. We note the Committee's recommendation. Departmental
objectives are agreed for the period of the CSR. In future, the
Department will seek to ensure that there is a range of related
targets to enable both annual assessment of progress and longer
term planning.
Recommendation 6 - We do not dispute that MAFF
made representations to the Treasury but the Ministry seems to
have adopted an unnecessary degree of cynicism in accepting what
it perceives to be unhelpful and unworkable targets. We expect
to see much greater ownership of the Business Plan and a stronger
commitment to a workable public service agreement.
6. The Department is making every effort to improve
its business planning process, which is now in its second year
of operation. Plans and targets, including Public Service Agreement
targets, are being cascaded internally to help ensure that staff
at all levels know what their work unit is about and are clear
on their role and responsibilities within it. This forms part
of the Department's Internal Communications Strategy, established
in July 1998 following consultation with staff. The Strategy is
being reviewed to ensure that it continues to meet the Department's
business needs.
Recommendation 7 - We recommend that MAFF seek
views from those it serves on how its performance should be measured
and be active in producing its own blueprint of meaningful and
measurable performance measurements for approval by the Treasury.
7. We note the Committee's conclusion and confirm
that the Department regularly consults its customers, client groups
and industry representatives on service delivery matters. The
Department is continuously looking to improve this process and
is being proactive in suggesting new targets to the Treasury.
Recommendation 8 - We recommend that the MAFF
Annual Report include information on spending totals and on expenditure
on individual programmes and schemes over the previous four years
in a readily comparable format.
8. We are currently in the process of reviewing the
structure and format of next year's Departmental Report in the
light of the comments made by the Committee. We can confirm, however,
that we will include information on previous programme expenditure
as the Committee has requested.
Recommendation 9 - We recommend that MAFF audit
all regulatory activity against need, comparative cost and the
actions of competitors and ensure access to regular intelligence
on competitor performance in these respects.
9. The Government is very concerned to root out all
unnecessary regulation. As the Committee acknowledges, MAFF has
set in hand a review of all regulatory burdens nominated by the
industry. Reports on the three main areas are expected shortly.
Where improvements involve changes to EU law, these will be pursued
in Brussels. Where changes can be made to the UK's own arrangements,
whilst remaining within legal, financial and public health constraints,
they will also be made.
10. For the future, MAFF will continue to audit all
new and revised legislation which imposes a burden on business
to keep regulation to a minimum through the Regulatory Impact
Assessments and consultation processes with those affected. Competitiveness
and costs are clearly aspects which must be considered when weighing
the options. It remains policy not to 'gold plate' EU requirements.
Recommendation 10 - We believe that administrative
costs of other CAP schemes, such as the Countryside Stewardship
Scheme, are too high in comparison to the funding paid to farmers.
At a time when MAFF's budget is under severe pressure, rises in
the cost of administration, particularly if they are at the expense
of payments to those the Ministry serves, would be wholly unacceptable.
11. MAFF will continue to examine ways of improving
efficiency and of keeping administrative costs to a minimum within
the bounds of very complex scheme rules. When the Commission and
Member States are discussing scheme changes in Brussels, we will
continue to seek to ensure that proper consideration is given
to the effect that any changes would have on the efficiency of
operations. The Ministry has embarked on a wide-ranging review
of how CAP schemes are administered in England, which will aim
to improve service delivery and maximise the efficiency gains
that will flow from the development of the new computer system.
12. There is an important distinction between most
CAP schemes, where payments are made automatically provided the
application meets certain set conditions, and discretionary schemes
such as Countryside Stewardship where judgement is exercised.
Because funds for the Countryside Stewardship Scheme are limited,
it is particularly important to seek maximum environmental value
for money from agreements. This requires detailed input from,
for example, professional ecologists into assessing the quality
of each Stewardship application, so that we can select the ones
likely to bring greatest benefits.
13. Professional input is costly but necessary. Once
signed, each agreement lasts for 10 years, and so it is vital
to specify the programme of work correctly at the outset. In a
sense, therefore, the costs of processing an application should
be spread over 10 years, unlike commodity payments which typically
only relate to one year at a time. In any case, these running
costs are not necessarily at the expense of payments to farmers.
14. On the level of detail required, another factor
is the need to comply with general principles relating to public
funds and with EU audit requirements. Whilst we do not want to
make the system unduly burdensome, we do need to be sufficiently
specific about what is to be delivered that inspectors can check
whether or not the farmer's side of the argument is being fulfilled.
Recommendation 11 - We recommend committed MAFF
involvement in the establishment of regional and cross-regional
strategies and in furthering those strategies.
15. MAFF is committed to working closely with Regional
Development Agencies and other regional partners in furtherance
of our objective of enhancing economic opportunity and social
development in rural and coastal communities in a manner consistent
with public enjoyment of the amenities which they offer. This
commitment has been demonstrated in the assistance which MAFF
(including FRCA) offered to the RDAs when they were preparing
their regional economic strategies, and in the collaborative work
which is currently being undertaken on the regional chapters of
the England National Plan under the Rural Development Regulation.
We will continue to look for ways of enhancing the advice and
support which we give to our stakeholders.
Recommendation 12 - We expect information to be
made available on the full cost of the inquiry to the public purse,
including, for example, the cost of officials' time in all relevant
departments.
16. The full costs of the BSE Inquiry to the public
purse will be made available. This will include the cost of the
Inquiry itself, the dedicated liaison units in the departments
sponsoring the Inquiry and legal support for witnesses. In addition,
it will include estimates of the cost of the serving officials
who are witnesses to the Inquiry and of those divisions who have
provided information and advice or central services to the Inquiry.
It is also intended that this additional information will be provided
for all departments involved with the Inquiry.
Recommendation 13 - We expect to see great improvements
in the Report next year and recommend that every effort is made
to reduce the cost and length and increase both the accuracy and
the ease of reference of this important document.
17. We note the Committee's recommendations and are
currently working on ways to reduce the length and cost of next
year's report and at improving the ease of reference of what is
acknowledged as an important reference document.
Recommendation 14 - We hope that the Intervention
Board will continue to work to persuade the Treasury of the importance
of adopting public service agreement targets and performance measurements
which relate more directly to the needs of clients.
18. The Intervention Board is fully committed to
meeting its objectives and performance targets and increasing
its productivity. Its key performance targets have always included
an element of customer service, but the emphasis has traditionally
been more on its business outputs and priorities. The Public Service
Agreement, published in December 1998, introduced additional service
based targets in connections with payments in euros, payments
of suppliers' invoices and the delivery of electronic business.
The Intervention Board is reviewing its Public Service Agreement
with Treasury and will take
the opportunity to ensure that service levels match
the expectation and needs of its customers and the Government's
overall objectives.
19. In the evidence session on 30 June, Mr Trevelyan
said that whilst he believed that in 1998-1999 the Intervention
Board had achieved all of its key performance targets this was
subject to audit. The audit has been completed and in the end
seven of the eight key performance targets were met. The anti-fraud
yield: cost ratio was very narrowly missed. An outturn of 2.9:1
was achieved against a target of 3.1:1. This has been fully reported
in the Intervention Board's 1998-1999 Annual Report and Accounts.
Conclusion: We also express the firmest possible
belief that, whether MAFF continues in its present form or a successor
body is established, the competitiveness of the agriculture, fisheries
and food industries must be a central consideration of government.
We are unconvinced that this has been a sufficiently high priority
of MAFF. This is a matter that we will continue to raise with
the Ministry at every opportunity.
20. The competitiveness of the agriculture, fisheries
and food industries is indeed a central consideration for MAFF,
reflected in the department's Objective 4, "to assist
the development of efficient markets in which internationally
competitive food, fish and agricultural industries can thrive".
21. In addition to seeking to minimise the burdens
of necessary regulation upon business, as discussed earlier in
paragraphs 9 and 10, the department actively promotes industry
competitiveness, through Ministerial and official contacts with
businesses, and a range of initiatives tailored to the circumstances
of different sectors. This commitment is underlined by the publication
in November of the report of the Food Chain Group, set up by the
Minister early in 1999. The report "Working Together for
the Food Chain" pulls together a wide range of activities
by Government and by different parts of the food chain which contribute
to improved working together and competitiveness. The Minister's
foreword to the report restates the need to improve the industry's
competitiveness.
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