APPENDIX 22
Memorandum submitted by the Intervention
Board (E27)
INTRODUCTION
The Intervention Board
1. The Intervention Board (IB) is a Government
Department and Executive Agency that funds, accounts for and operates
Guarantee aspects of the Common Agricultural Policy (CAP) in the
UK. The Chief Executive is responsible through the Intervention
Board for Agricultural Produce (IBAP) for the day to day management
of IB. UK Agriculture Ministers appoint IBAP (the Board). It has
an independent Chairman, Mr Ian Kent, and its members are the
Chief Executive of IB and senior officials of the UK Agriculture
Departments. The Board is responsible to the Minister of Agriculture,
Fisheries and Food, the Minister for Rural Affairs in Scotland,
the Secretary for Agriculture and Rural Development in Wales and
the Minister for Agriculture and Rural Development, Northern Ireland.
IB is one of seven Paying Agencies in the UK. IB has in the region
of 1,250 permanent staff and expects to spend some £820 million
of CAP funds, a large proportion of which will be fully re-imbursed
by EAGGF.
2. CAP subsidies and grants can only be
paid by "Paying Agencies" which have been "accredited"
by the "Competent Authority" in a Member State. In the
UK the Competent Authority comprises the four Agriculture Ministers
for England, Scotland, Wales and Northern Ireland and the Secretaries
of State for Scotland, Wales and Northern Ireland. These arrangements
are the subject of a review in the light of Devolution. The UK
Competent Authority has accredited seven Paying Agencies, including
IB and MAFF.
3. IB administers more than 60 CAP schemes,
which in the main are aimed at traders, producers and processors
of agricultural products. The Agriculture Departments (MAFF in
England) are responsible for administering CAP schemes, which
provide support direct to farmers.
4. IB also acts as the Co-ordinating
body and Funding Body for UK Paying Agencies.
5. As Co-ordinating Body, IB's responsibilities
include distributing Community texts and guidelines to the various
Paying Agencies and promoting their harmonised application.
6. IB's responsibilities as Funding body
are to:
— secure Exchequer funding for UK CAP
scheme expenditure;
— provide programme funding to the
other paying agencies on receipt of funding certificates;
— vote manage EU receipts in respect
of monthly indent claims submitted for all UK paying agencies;
— provide annual accounts to both the
Exchequer and EU.
7. IB operates from two main locations:
Reading and Newcastle upon Tyne.
RELATIONSHIP WITH
THE MAFF REGIONAL
ORGANISATION
8. Scheme compliance in respect of the bulk
of the 60+ IB administered CAP schemes is generally undertaken
by regionally based IB Verifiers, IB Technical Staff and other
Agents. Some scheme compliance checks for a number of the IB schemes
are undertaken, under repayment arrangements, by MAFF field staff
based at Regional Service Centres (RSCs) in England. This work
is undertaken by MAFF as a delegated service in line with the
requirements for the accreditation of Paying Agencies set out
in Commission Regulation (EC) No. 1663/95.
9. Some field inspection work is also undertaken
by MAFF RSCs in respect of IB's Slaughter Premium Scheme for over
thirty month animals. This work is not done under repayment arrangements.
It is undertaken on a reciprocal basis with IB undertaking abattoir
inspections for MAFF at no charge.
10. In addition to the scheme compliance
activities referred to in paragraph 8 above, IB is required in
accordance with EC legal requirements to undertake a detailed
programme of Scrutiny visits. This work is undertaken by the Scrutiny
staff of IB's Anti-Fraud Unit.
11. Compliance work undertaken by MAFF field
staff on behalf of IB, which includes some unannounced spot checks,
includes the following.
— Ensure deadlines are complied with.
— Monitor and supervise production.
— Check the presence of products in
store.
— Check the eligibility of products.
— Check the quality of products.
— Check the acceptability of packaging
and labelling.
— Take samples of products, denaturants,
chemcial and organoleptic tracers and send them for analysis.
— Examine production records.
— Monitor goods into and out of store.
— Undertake stock checks.
12. MAFF has allocated lead region responsibility,
as shown below, to individual RSCs for the IB schemes, which it
helps to control. Instructions (RSC Chapters) detailing checks
and deadlines are drafted and revised by the IB Scheme Manager
and agreed with MAFF RSSU (Regional Services Support Unit) after
consultation with the MAFF lead region. Once agreed, MAFF RSSU
issues the RSC Chapter to all RSCs.
| IB scheme | MAFF lead region
|
| Intervention butter purchase/disposal | South West—Exeter
|
| Intervention skimmed-milk powder purchase/disposal
| South West—Exeter |
| Private storage aid for butter | South West—Exeter
|
| Butter for manufacture | South West—Exeter
|
| Butter for direct consumption | South West—Exeter
|
| Butter for non-profit making organisations |
South West—Exeter |
| Skimmed milk powder for animal feed | South West—Exeter
|
| Milk quotas | South West—Exeter
|
| Starch production refund | Anglia—Cambridge
|
| Dehydrated fodder production subsidy | Anglia—Cambridge
|
| Fibre flax production subsidy | Anglia—Cambridge
|
| Hemp production subsidy | Anglia—Cambridge
|
| Fruit and vegetables withdrawals | South Mercia—Worcester
|
| Concentrated grape must | South Mercia—Worcester
|
| Slaughter Premium Scheme (over 30 month animals)
| South Mercia—Worcester |
| Sugar cane refining aid | South East—Reading
|
| Isoglucose production levy | South East—Reading
|
| |
13. Standards of service for work carried out on all
schemes listed in paragraph 12 are the subject of Service Level
Agreements (SLAs) between IB and MAFF. These SLAs require MAFF
to provide annual attestations confirming that they have fulfilled
their responsibilities.
RELATIONSHIP WITH
PARTICULAR MAFF REGIONAL
SERVICE CENTRES
14. IB has Verification and Anti-Fraud Unit staff located
around the UK. In England some of them are co-located at MAFF
RSC sites at Bristol and Cambridge.
15. The South East RSC at Reading is located a short
distance from IB's Headquarters. There has traditionally been
a strong close working relationship between the operational side
of IB Reading and the RSC. This is partly because the RSC is the
MAFF lead region for the Integrated Administrative Control System
(IACS) and Finance issues. It also plays a major role in the development
of the new MAFF computer system (NURAD). Over the years there
has been some interchange of staff and managers between both offices.
16. An IB unit based at the South Mercia RSC in Worcester
is responsible for administration of claims processing for the
Slaughter Premium Scheme (SPS) for Welsh Under-Thirty Month (UTM)
animals. IB was delegated by the National Assembly for Wales Agriculture
Department (NAWAD) to run the claims processing administration
for Wales. The unit is based at Worcester both to be conveniently
co-located with the MAFF lead region for SPS, and to enable the
MAFF computer system for UTM animals to be used, without the need
for a duplication of IT development at IB. The payments arising
from the Worcester unit will be issued and accounted for by IB.
SERVICES PROVIDED
BY IB TO
THE MAFF REGIONAL
ORGANISATION
17. IB performs all controls at abattoirs for MAFF in
respect of the Slaughter Premium Scheme (SPS), since this work
falls within its sphere of expertise. Until the introduction of
SPS there was no agreement for IB to provide services to the MAFF
Regional Organisation, although from time to time IB did so on
an ad hoc basis if work needed to be done for which it
had particular expertise. IB polices the arrangements under which
non-food crops may be grown on set-a-side land.
PERFORMANCE OF
RSCS IN
UNDERTAKING WORK
ON BEHALF
OF THE
INTERVENTION BOARD
18. MAFF provides a delegated service (under accreditation
rules) to IB in the provision of scheme compliance checks. Limited
MAFF resources can on occasions lead to IB scheme compliance controls
being assigned a lower priority than those for MAFF schemes. This
needs to be planned for since it can jeopardise IB's ability to
meet regulatory control requirements set by the EU. This is particularly
the case when compliance checks for IB schemes coincide with peaks
of activity in MAFF's controlling its own schemes. This is difficult
to avoid due to the demand and market led nature of the IB schemes.
The SLAs between the two Departments recognise this problem and
require MAFF to monitor the situation and provide IB with adequate
notice that it will be unable to meet its obligations. This provision
requires IB to make alternative arrangements to ensure that regulatory
control requirements are observed. For example, on occasions the
Meat and Livestock Commission (MLC) has carried out compliance
controls in connection with the Intervention skimmed-milk powder
scheme when MAFF has been unable to do so.
THE REVIEW
OF CAP SCHEME
ADMINISTRATION
19. IB voluntarily participated in the MAFF commissioned
Review of CAP Scheme Administration in England undertaken by PricewaterhouseCoopers
(PwC). It was represented on the Review's Joint Steering Group
and is currently represented on the Restructuring Programme Board,
the CAP Payments Agency Programme Broad and the CAP Payments Agency
Interfaces Programme Board.
20. IB broadly supports the recommendations made in the
PwC report issued in January 2000, including the main recommendation
to merge the CAP scheme administration functions of IB and the
MAFF RSCs into a new single paying agency for England. IB believes
firmly it has much to offer the new paying agency by way of expertise
in centralised claim processing, scheme management and corporate
support activities that are not replicated in the MAFF RSCs or
MAFF HQ (CAP Schemes Management Division). IB has an experienced
and able workforce that has proved itself capable of meeting new
and changed demands for scheme administration work, usually at
short notice. In recent years it has successfully responded to
the introduction of Milk Quotas and the compensation schemes introduced
in the wake of the BSE crisis. IB has achieved the Investors in
People standard which has been successfully re-assessed over the
past two years. It therefore welcomes the opportunity to play
a full and active role in helping set up, and being part of the
new paying agency.
21. As a strongly customer focussed organisation, IB
also welcomes the opportunities recommended for improving customer
service through the use of modern IT systems, the electronic submission
of claims, the introduction of a dedicated Customer Service Centre
and the introduction of whole business/farm inspections covering
all schemes. Like MAFF, IB has a number of IT pilots in operation.
These include the electronic dispatch to customers of Milk Quota
purchaser reports and the electronic submission of kill data by
slaughterhouses over the Over Thirty-Month and SPS schemes. In
addition, a major project is in hand to enable the electronic
submission of export refund claims and licence applications.
22. The proposal to set up a National field inspection
service by merging the IB Verification Service and Technical staff
with the MAFF Field Inspection Service is particularly welcomed.
This will facilitate scheme control across all CAP schemes.
CONCLUSION
23. The MAFF RSCs provide a scheme compliance check service
to IB for some of the CAP schemes that it administers. IB welcomes
the opportunity to work with MAFF in setting up a new CAP Payments
Agency and playing a full and active partnership role in the new
paying agency.
7 June 2000
| 
