Examination of Witnesses (Questions 40
- 59)
WEDNESDAY 21 JUNE 2000
MR BRIAN
BENDER, MR
RICHARD CARDEN
AND MR
GEORGE TREVELYAN
40. I wonder if I could turn to another little
target as quick as I may and that is your disallowance target
in 1999/2000 and your explanation results mainly from Commission
financial corrections of £22.8 million due to perceived—and
I think this is the word that one is highlighting—control
deficiencies. Were there control deficiencies or were they merely
perceived by others to be so?
(Mr Trevelyan) We had a long running dispute with
the Commission on this subject. They have a standard way of making
disallowances where you get the 2 or a 5 or a 10 percent disallowance,
depending on a range of weaknesses in control which their auditors
identify. However, the rules of the game are that that disallowance
should also be linked to the risk presented to the Fund, to FEOGA
by the weaknesses in organisation. We acknowledge that in the
first few months of the 30 month scheme introduced in May 1996
not all the paper work, not all the docketing, not all the IT
was in place. It could not be, because the scheme was introduced
with no run-up. Normally you have a year to prepare for schemes
of this magnitude. So we acknowledge there were control weaknesses.
What we disputed with the Commission was that there was any risk
to the fund. There are peculiarities over the 30 month scheme
for example. The product which we are dealing with, that is, dead
cattle, is immediately transformed into meat and bone meal and
has no possible further outlet in the United Kingdom where there
is no market for meat and bone meal since the controls were put
in place in 1996. We argued that there was no risk to the fund
and nobody has ever proved that a pound of community money has
gone astray. However, the control weaknesses were there for all
to see. We never disputed that we did not—
41. Earlier on you mentioned the 30 month scheme
and of course a very controversial issue in farming quarters has
been the issue of the tendering for the contracts. The first question
I would really like to put to you is the number was reduced, I
think, to 20 was it?
(Mr Trevelyan) Yes, from 30.
42. Was there a decision to begin with that
there would be only 20 or was that really a consequence of the
tendering process?
(Mr Trevelyan) No, we entered into the tender process
with some doubts as to whether we would benefit from it, but the
initial contracts had run for three years and it is normal to
review your contractual arrangements after that period of time.
What we were impressed with was the very significant reductions
that were on offer through the tendering process and we have,
as we have told Parliament, saved between £5 and £6
million on operating costs as a result of the tender process.
43. I do understand that, Mr Trevelyan, but
of course the criticism made is that the exercise was for the
saving of that money and that the geographic or animal welfare
factors or farm economy factors were ignored in that process?
(Mr Trevelyan) Yes, I am aware we were accused of
saving Government money at the expense of farmers. We do not believe
that that has been proven. We have had extensive discussions with
the NFU. We have asked them to give us evidence of added cost
to farmers as a result of the exercise and I have to say there
is no dossier in our office from the NFU which gives any evidence
of significantly increased costs to the industry. It is not a
factor in the debates which the Ministry has with farmers that
they have suffered significantly from the rearrangements of the
contracts.
44. May I ask you if the animals were taken
a longer distance that there might be a slightly higher cost to
those engaged in rearing those animals?
(Mr Trevelyan) Yes, of course, but some journeys are
shorter. There is a balance; some journeys are shorter, some are
longer. The areas where we made the most economy, for instance,
are in areas like East Anglia where only 10,000 animals a year
come through.
45. There are very long journeys for some?
(Mr Trevelyan) There may be longer journeys for some
of those 10,000 animals. On the other hand, we kept the concentrations
in the areas in the West of the country. We are talking about
a scheme which has been 800,000 and 900,000 animals a year coming
through. We know, after four years of operation, exactly where
the concentrations are and we were, if you like, in a position
to take much better operational decisions as we were reviewing
the results of this last tender than we were initially in 1996/1997.
Mr Paterson
46. May we turn to the Food Standards Agency?
Part of your modernising government programme, the concordats,
working agreements, service level agreements, should have been
in place by the time the FSA was set up. Have you actually formalised
your working relationship with the FSA?
(Mr Bender) As I understand the matter, the FSA itself
wished to put the concordat to its Board, otherwise it would have
been formalised straight away. That has now happened and since
I arrived in post and signed the concordat I expect therefore
that it will be published very soon.
47. So how do you work with the FSA? Can you
approach them directly or do you have to go through the Department
of Health?
(Mr Bender) We can approach them directly and indeed
Mr Carden is having a stocktake after several weeks, a stocktake
of the relationship at the end of this week. I am seeing the Chairman
and Chief Executive for an introductory chat on Monday. So we
have direct relations with them. Mr Carden may want to add.
(Mr Carden) I would like to add, Chairman, first of
all to confirm what Mr Bender said. The concordat was drawn up
at the end of March; the Food Standards Agency went live on 1
April. I had an exchange of letters with the Chief Executive of
the Food Standards Agency from the Permanent Secretary's seat
before the end of March to agree that we would operate in line
with the concordat that had been drawn up, but from the Food Standards
Agency side they said they wanted to run it past their Board at
a formal meeting—they thought in April but it turned out
to be the end of May—before it was formally signed as it
has just between Mr Bender and Mr Podger, the Chief Executive
of the Agency. We are in contact, MAFF and the Food Standards
Agency, at all levels on day to day business. There is a fairly
large area of business on which MAFF and the Food Standards Agency
need to work closely. You will perhaps have noted from our Business
Plan that our Protection of Public Health Objective, the spending
on that objective is at least twice as much as on any other objective.
Protection of public health is still an important top priority
in MAFF. On a lot of animal health business, for example, there
are proposals, matters under discussion in Brussels in committees
that the Commission or the Council preside over, which need input
from both MAFF and the Food Standards Agency; most recently on
the discussion over specified risk material, MAFF and the Food
Standards Agency were in day to day contact in the negotiations.
48. Yes, interestingly you actually have an
advantage, as far as I can see, over Members of Parliament. I
wrote to Sir John Krebs on 7 May, with a reminder on 7 June and
it may have been that my original letter had the wrong postcode
on it; I had SW1 when it was actually SE1. However, it did take
two months to get a reply back saying that all letters from Members
of Parliament would be handled by the Parliamentary Under-Secretary
of State of the Department of Health. So as I understand it, Members
of Parliament cannot write direct to the FSA. Is that how you
thought it would work out when it was set up?
(Mr Carden) That is actually a matter for the Food
Standards Agency. I cannot comment on that.
(Mr Bender) The concordats—forgive me for what
may be stating the obvious—concern the relations between
MAFF and the FSA, not the FSA's relations with the rest of the
world, so I am afraid I cannot comment.
49. I will take it up with the Department of
Health. Just to move on. You are to lose several food safety programmes
listed on page 63. What implications will they have for other
work taken by groups within MAFF?
(Mr Carden) The Food Safety and Standards work that
was carried out in latterly the Food Safety and Standards Group
of MAFF and the Department of Health working together, has now
all passed over entirely to the Food Standards Agency. That is
no longer with MAFF and there is no shadow operation in MAFF.
However, there are substantial areas of work in MAFF where the
primary objective is protection of public health—animal
health groups' work on animal diseases communicable to humans,
some of the work carried out by the Pesticides Safety Directorate
and the Veterinary Medicines Directorate—where links, formal
and informal, between MAFF and the Food Standards Agency are important.
That is covered by some formal links. The Food Standards Agency
will have staff on the supervisory boards, what we call ownership
boards of the Pesticide Safety Directorate and Veterinary Medicines
Directorate. Conversely our Chief Veterinary Officer will have
a seat on the supervisory board for the Meat Hygiene Service.
50. Yes, my worry with this big change and the
change of people taking responsibility some valuable exercise
may be lost. From my own experience and I would be interested
to know about your schemes to ensure clean cattle sent to abattoirs.
Is anyone overseeing all the activities that you were in charge
of up to April 1 will be continued under the new arrangements?
(Mr Carden) I referred to the Food Standards Group
having migrated to the Food Standards Agency. Another block of
work that has migrated is the Meat Hygiene Service. It is the
Meat Hygiene Service that was responsible for running the clean
cattle operation and still is, but now working as an executive
agency of the Food Standards Agency, accountable through the Department
of Health and not through MAFF Ministers.
51. You have no liaison group ensuring that
all these activities are being carried on. It may be the Department
of Health will take it quite seriously, but your experience—
(Mr Carden) But as well as this transfer of responsibility
of the Meat Hygiene Service and above that the Food Standards
Agency, we have the bridges that I have mentioned to make sure
that there is communication between our veterinary group and the
Meat Hygiene Service and the Food Standards Agency and our agencies
dealing with pesticides and veterinary medicines making their
input for the protection of human health.
52. A further element of change which is on
the horizon is the prospect of setting up a European Food Authority
which has 84 action points. How do you see that impacting on your
work?
(Mr Carden) That is a proposal which when it takes
shape formally from the Commission will be discussed in the usual
way by all the departments in Whitehall that have an interest.
The lead responsibility will be with the Food Standards Agency.
53. But you have no understanding yet which
areas of your activity may be affected by this new Authority?
(Mr Carden) No, we do not have enough detail from
the Commission as to what shape a European Food Agency will take
to have a view on that yet.
54. And are you in touch with Dublin discussing
this?
(Mr Carden) With Dublin?
55. Yes, the FVO in Dublin?
(Mr Carden) The proposal will be formulated by Mr
Byrne's part of the Commission in Brussels. The Dublin Food and
Veterinary office would become involved if the Agency became a
reality and there were inspections carried out. That agency in
Dublin is concerned with inspections of food and veterinary legislation
to keep Member States up to the mark against legislation that
exists, but that agency in Dublin will not have a real role with
the European Food Agency until it becomes a reality.
Chairman: When Napoleon and the Pope signed
the first Concordat they did not know what they were getting into,
did they, really? Now then, Mr Borrow.
Mr Borrow
56. Could I just touch very briefly on three
issues to do with MAFF's relationship with the food industry?
The first one I wanted to touch on is the work of the Food Chain
Group and I think the Institute of Grocery Distribution recently
issued a report as to how they felt that work should be taken
forward. I wondered how MAFF saw its role in sponsoring the food
industry developing, given the work that has already taken place
with the Food Chain Group?
(Mr Bender) The Food Chain Group was, of course, set
up with the strong encouragement of the Ministry and there is
the statement early on in the Departmental Report, Nick Brown:
"My vision for farming involves a food chain that works with
maximum efficiency to allow production, processing and distribution
to be fully responsive to what consumers want." That was
given a further impetus at the Farming Summit at the end of March.
So a food chain where the various links in it have a serious dialogue
with one another is an important objective of the Minister and
the Ministry. I do not know if that answers your question?
57. How do you see that developing in the future?
(Mr Bender) There is a senior MAFF official, Kate
Timms, who chairs meetings of the principal players in this. I
do not think at the moment we have a fixed view about how to carry
it forward beyond what was in the Farming Summit Action Plan in
March.
58. So we will have to wait until the report
in twelve months' time to have some view a to what progress is
being made and what objectives need to be set for the future?
(Mr Bender) There are other ways of communicating
with the Committee beyond the departmental report, Chairman. I
would expect that, as the various elements of the Action Plan
are developed and carried forward, the Minister would say things
in public about how they are developing, not just through the
departmental report.
59. On the export side of MAFF's relationship,
what is MAFF doing to bring the closer integration of MAFF and
Food from Britain export services with those of the British Trade
International?
(Mr Bender) There has obviously been a strong dialogue
with British Trade International since it was set up, but beyond
that I am afraid I cannot answer the direct question.
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