Select Committee on Agriculture Tenth Report



TENTH REPORT

The Agriculture Committee has agreed to the following Report:-

REGIONAL SERVICE CENTRES

Introduction

1. The way in which the Ministry of Agriculture, Fisheries and Food delivers services to farmers, polices public expenditure under Common Agricultural Policy (CAP) programmes and contributes to broader strategic policy in the English regions is about to change dramatically. At the moment these functions are performed by nine Regional Service Centres (RSCs). On 24 July 2000 the Minister set out proposals for restructuring his Department's regional activities.[1] The announcement came as the Committee was completing an inquiry into the role and performance of the regional service centres. This investigation highlighted several important issues which need to be addressed if the Minister's plans are to be implemented successfully. We regret that the Committee did not have the opportunity to express its views fully before the announcement was made. The plans comprise three elements which are: to establish a new CAP Payments Agency operating from five sites around the country; to place a senior representative of MAFF with appropriate staff support in each Government Office for the Regions; and to restructure firstly the work currently carried out in the Farming and Rural Conservation Agency (FRCA - responsible for policies on farming, conservation, environmental protection, rural land use and diversification) and secondly the non-CAP payment functions of the RSCs.

Functions

2. What are the functions MAFF should perform in the regions? We summarise these as accurate, cost-effective and efficient processing and policing of claims for CAP subsidies; reassurance to farmers that forms have been completed and officially received; general advice; and regional representation, particularly in rural development strategies. We have been struck by the extent to which farmers regard the RSCs as the public face of MAFF and as the natural first contact point for information on many Government activities. In particular, a substantial minority of farmers, not invariably those close to the centres, strongly prefer to deliver their claim forms by hand and appreciate the low level help and advice which their local RSC can offer. The proposed new organisation of MAFF's regional services, which is likely to mean the closure of the RSCs at Bristol, Cambridge, Crewe, Nottingham, Reading and Worcester, must be judged on how well it is likely to be able to deliver these functions, both separately and in relation to one another. The three elements of the Minister's restructuring plan broadly cover all the functions. We believe that there is a strong case for re-organisation to enhance MAFF's policy-making role at regional level, to make the processing of subsidy applications more efficient and to make advice more accessible to farmers. We also believe that there is an indisputable case to employ new technologies on those tasks, provided that they are introduced with proper care, consideration and trialling. But we have serious concerns about the clarity of MAFF's vision and the ability of its management to implement the proposals. We note that no vision statement is included in the business case and that the statements given to us in evidence on how services were to be delivered lacked clarity and precision.

The CAP Payments Agency

3. The Comprehensive Spending Review 2000 cleared the way for MAFF to create a new executive agency for the administration of CAP schemes. Based on recommendations from the report produced by PricewaterhouseCoopers (PwC) which was submitted to MAFF in January 2000, the Minister has proposed that the paying agency functions of the RSCs and the Intervention Board should be merged and delivered by a single service operating from five sites. One of the processing centres will also house a national customer call centre and responsibility for management of individual schemes will be divided between the four sites at Carlisle, Northallerton, Exeter, and the IB centre at Newcastle, with the agency headquarters in Reading. The aim is to take "full advantage of the benefits of electronic services delivery", moving towards achieving 95% electronic service delivery capability by March 2004.[2] We welcome the invitation to farmers' and traders' organisations to comment on some detailed aspects of the transition and operational arrangements of the new agency. We support the principle of the agency and believe that it has the potential to offer a better, faster, more efficient service to farmers at a lower cost to the taxpayer. A central point of contact, where staff can answer questions on all CAP schemes and have instant access to the caller's records, has much to recommend it and we believe that the move to electronic forms will also benefit farmers in the long-term by speeding up the process and reducing errors, provided either that those who wish to retain the right to submit applications on paper can continue to do so for a reasonable period or that help will be provided locally for farmers who are not confident with new technology.

4. However, our observations during our inquiry have left us with severe doubts as to the ability of MAFF to deliver this project. In the past, the management of the RSCs' CAP administration function has been criticised by the Committee of Public Accounts on the ground of major variations in efficiency, and more recently the PwC review identified a number of structural and operational issues, including the use of new technology, which led to inconsistent, inefficient and inadequate work processes.[3] The failure of management at MAFF headquarters to address or even be aware of these issues does not inspire confidence as MAFF takes on the oversight of a much more ambitious project, such as is now in prospect. We recommend that to address this issue, a new, high quality project team be put in charge of the implementation of the proposals for a new agency. MAFF must recognise that to define and deliver a project such as this will require skills and expertise not currently available in-house. We believe that MAFF should evaluate whether the core data processing and management function would be better carried out by a private sector contractor, while reserving claim authorisation to public officials.

5. Public sector IT procurement projects have too often turned out to be disastrous. We are fully aware that failure in this instance would seriously disrupt payments on which farmers are often dependent and would incur financial penalties in the form of disallowance by the EU as well as other costs. It is therefore essential that, as part of proper management of the project and its implementation, the project team undertake thorough risk analysis, draw up a tightly-defined process and system specification and ensure comprehensive testing and trialling of the computer system. We cannot emphasise too strongly our belief that the transition to the new agency with its promised benefits for farmers and taxpayers will need a far higher degree of commitment to change and the ability to see that through than MAFF's past record has demonstrated.

Regional strategy

6. Structural policies are now generally co-ordinated at regional level, with the Government Offices for the Regions playing a key role. It makes obvious sense as the rural development strategy is introduced to integrate some of the functions of the RSCs and senior MAFF officials within the Government Offices (GOs). MAFF's influence on regional strategy has previously been hampered by the physical isolation of the RSCs and their non-alignment with standard Government regions. Of the nine RSCs, just three are located in the same city as the GO headquarters (Nottingham, Cambridge and Bristol) and many if not all of the RSCs have to deal with more than one GO. Looking at it from the other point of view, three RSCs were involved in co-ordinating the South West regional rural development plan and in only one instance, that of the East Midlands, was input restricted to just one RSC.[4] We appreciate that the location and scope of each MAFF office has been determined historically by factors which do not apply to other Government departments, for example, the type and extent of farming or responsibility for flood defence. This situation evolved before the establishment of the Government Offices which themselves integrated departmental regional services. However, this is now clearly an inherent disadvantage and we welcome the new relationship proposed by the Minister. The MAFF representatives in the Government Office must be carefully chosen and trained if MAFF is to pull its weight in the organisation. At the moment, we have the broad outline of what is intended but devoid of detail. We await amplification with interest.

Local services

7. Certain functions currently performed by the RSCs can only be delivered on a local basis. Under the restructuring programme, such work is to be carried out by "a single, nationally managed but largely regionally based service", which will "be set up so that it relates effectively to Government Offices".[5] The new service will be responsible for delivering rural development policies and programmes. It will also undertake regulatory functions, as well as the key task of ensuring that MAFF retains a presence locally in order that farmers might still have face-to-face contact with MAFF staff. We know that this proposal will be welcomed by the rural community which greatly values MAFF's local presence. But as yet we have no detail as to how the new service will work and its role in providing advice and assistance to farmers or how this will relate to other key initiatives such as the development of support through the Small Business Service (SBS). Farmers consistently urge a simpler relationship to the advisory and support services offered to them - a "one stop shop". It is not clear that this is what will emerge. We note in particular that MAFF intends to review these arrangements in 2003 "to consider at that stage whether full integration with the Government Offices would be sensible".[6] This implies that the measure is seen by MAFF as a stop-gap to smooth the transition to the new structures and the closure of individual RSCs. As such, it could well be a missed opportunity to bring services closer to the farmer and enhance the access of the rural community to information and advice on a wide range of Government and other programmes. We hope to see some lateral thinking from MAFF in this respect, for example on the use of mobile or temporary offices in auction marts and the use of rural post offices, on encouraging home-working or on the awarding of contracts to small companies formed by teams of MAFF officials to offer their services. We believe that MAFF should explore these options positively and with a view to their being introduced on a permanent basis. These facilities should be developed in association with services offered by the SBS. It is important that local knowledge is retained for the delivery of environmental services. MAFF establishments in the regions other than the RSCs also need to have a clear idea of who they are reporting to in terms of management.

The role of MAFF

8. The establishment of an executive agency for CAP administration and the integration of other RSC functions into the Government Offices for the Regions raises the wider issue of the role of MAFF itself in supporting agriculture. The drivers for change are well known and include the implementation of the rural development regulation, the Modernising Government agenda with its support for greater use of electronic communications, the increasing view of farming as a business requiring access to general and specialised business advice, and the development of regional strategies and policies, rather than nationally-defined programmes. In responding to these pressures, MAFF will have to face fundamental questions about its purpose and the delivery of its objectives. We limit ourselves to highlighting these issues in this brief report but we will return to them in future.

Conclusion

9. In general terms, we believe that the Government's proposals for restructuring its work in the regions are sensible and could potentially deliver benefits for all concerned. We support the setting up of a new agency for the administration of CAP schemes and believe that MAFF's regional impact will be strengthened through senior representation within the Government's main regional offices, thereby ensuring that the interests served by MAFF are taken fully into account in developing regional policy, and through the merging of FRCA and other parts of the RSCs.

10. Our central message is that the success of the entire project will depend on effective formulation of the strategy and delivery of the service. It must be demonstrated that the new systems work both technically and in their ability to respond to customers' needs, and clear evidence must be provided that the development of policy on a regional basis is more co-ordinated. We seek the earliest clarification on details of the changes to regional and local representation, particularly as to how the various initiatives fit together. For the new agency itself, however, we expect MAFF to take full account of our comments and reservations in developing its implementation plans over the summer. We look forward to giving a detailed scrutiny to the business case and receiving a report on the consultation at an early opportunity, when we shall revisit this inquiry and examine how similar functions are carried out in other parts of the European Union.


1  HC Debates, 24 July 2000, cc 472-4W. Back
2  HC Debates, 24 July 2000, c473W. Back
3  PwC, MAFF CAP Administration Review, pp. 28-29, 89-93, 11, 14. Back
4  Ev. p. 110, para 6. Back
5  HC Debates, 24 July 2000, c474W. Back
6  IbidBack

 
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