House of Commons - Agriculture

Select Committee on Agriculture Ninth Report

NINTH REPORT

The Agriculture Committee has agreed to the following Report:-

MAFF/INTERVENTION BOARD DEPARTMENTAL REPORT 2000

1. The Departmental Report 2000 for the Ministry of Agriculture, Fisheries and Food and the Intervention Board was published on 10 April 2000.[2] In accordance with established practice, we announced our intention to hold a short inquiry into the Report and invited the administrative heads of both the Ministry and the Intervention Board to give oral evidence to the Committee on 21 June 2000. The retirement of Sir Richard Packer in the course of the year covered by the Report left a vacancy as MAFF Permanent Secretary which was covered by Mr Richard Carden from18 February until 31 May when Mr Brian Bender took up the post. To enable us to cover both past events and future plans, both Mr Carden and Mr Bender agreed to appear before the Committee. They were joined by Mr George Trevelyan, Chief Executive of the Intervention Board. The transcript of evidence, together with three memoranda on the Winter and Spring Supplementary Estimates and a further memorandum addressing points arising from the oral evidence session, is published with this Report. As always, we are grateful to MAFF and the Intervention Board for their willing co-operation with our inquiry.

Events since last Report

2. During the twelve months since we last examined a Departmental Report from MAFF,[3] the Government has responded to the continuing crisis in agriculture in a number of ways. In September 1999, the Rt hon Nicholas Brown MP announced an aid package for farmers worth a total of £537 million, which included the waiving of charges for cattle passports and removing specified risk materials from cattle and sheep carcasses, the maintenance of Hill Livestock Compensatory Allowances at 1999 levels, assistance for marketing, and agrimoney compensation.[4] In December 1999, the Minister outlined how the European Union Rural Development Regulation would be implemented in England, involving an increase in expenditure on agri-environmental and rural development measures of 60 per cent over seven years to £1.6 billion.[5] Three months later, in March this year, an Action Plan for Farming emerged from a summit chaired by the Prime Minister. The Plan contained "62 measures to support the Government's long-term agriculture strategy".[6] We took the opportunity to discuss each of these initiatives with the Minister as they arose.[7] We conclude that, taken together, they begin to address the need we identified in the wake of the September aid package for "a strategy for Government involvement in and responsibility for the industry".[8] It is possible that the crisis which precipitated the series of Government initiatives may be easing. The Minister was quoted in early July as saying that "There are some signals that give grounds for optimism, I do think we have turned the corner."[9] We hope that this belief proves well-founded.

3. The establishment of the Food Standards Agency is the other major development which has affected MAFF from the beginning of the current financial year. Five of MAFF's programmes,[10] which together accounted for almost £36 million of expenditure in 1999-2000, have been transferred to the FSA. In recent days, the FSA's budget has also been boosted by the announcement in the Comprehensive Spending Review that its funding will grow in real terms by an average of 6 per cent a year over the next three years, taking it from £87m at present to £111m by 2004. One consequence of the launch of the FSA is that both total Departmental Expenditure Limits and staff numbers within MAFF will fall in the current year.[11] It has also necessitated a change to MAFF's objective I, which now reads: "To protect public health in relation to farm produce and to animal diseases transmissible to humans".[12] Previously, it referred to "food" rather than "farm produce".

4. Between the time of our taking evidence and the publication of this report, the Chancellor of the Exchequer has announced the outcome of the Comprehensive Spending Review. MAFF's Departmental Expenditure Limit is to rise by an annual 6.3 per cent on average in real terms from £804m in 2000-01 to £1,081m in 2003-04.[13] Three new PSA targets have also been set, focussing on the rural development plan, biodiversity and modernisation and competitiveness of agriculture and the food chain.[14] These decisions will have profound consequences for MAFF and the way in which it operates. We will return to this subject in greater depth in the context of future inquiries.

Structure of Report

5. During the course of our evidence session, as well as considering MAFF's progress towards achieving its targets, we focussed on a number of issues that arose from the documents before us. These included, in addition to the Departmental Report, MAFF's Business Plan 2000-01 and MAFF's Part in Modernising Government. Most of the issues we examined can be classified as administrative, ranging from the documents and their content, the objectives and Public Service Agreement targets of MAFF, through staff and modernising Government to departmental finance matters. These issues are covered in the next part of our Report. We also asked detailed questions about some of the Groups which reported their activities in the Departmental Report and about regulations imposed on the farming industry. We comment on these in the following part of our Report. We then consider the performance of the Intervention Board and issues that affected it during the past year. Finally, we outline the conclusions we have reached as a result of our inquiry.

MAFF administration

The Departmental Report

6. Last year we were critical of a long and expensive Departmental Report which contained a number of errors. We believe that this year's Report is a great improvement: it is shorter, much easier on the eye and much cheaper. We congratulate MAFF on the progress it has made in this regard, although we do have a handful of qualifications and observations. First, we are obliged to record that the Ministry failed to follow the correct parliamentary procedure in laying the Report with the result that it was available to the press and public two days before it was available to Parliament. We accept that this was "an honest mistake" which arose out of a desire to keep down the cost of publication and from staff changes.[15] However, it is a serious error for a Government Department to make and creates a bad impression of the efficiency with which this Report, an annual exercise after all, was prepared. This must not happen again. We also discovered a major error in the figures for one particular programme, where planned expenditure on organic farming was quoted as £5.5 million in 2000-01 and the real figure was £92,000.[16] Above all else, MAFF must aim at accuracy in producing its annual return to Parliament and we expect more effective checking procedures to be put in place before future reports are sent for publication.

7. Second, we raised with the Ministry the decision to structure the Report around Groups rather than the Department's objectives, as had been done in both last year's Departmental Report and the current and previous Business Plans. Mr Carden explained that this had been done "partly because it seemed a less abstract way of organising the material, partly because those who deal with the Ministry are probably familiar with the groups".[17] He identified an additional benefit in that "the heads of groups ... felt more ownership of the material and it came alive a bit more" than when it was organised centrally.[18] We accept this reasoning and agree that this presentation works better than that employed in previous reports.

8. Finally, we noted that, although 1999-2000 outturns were presented, they were not set against planned levels of expenditure for the year. We realise that plans may change during the course of the year and we acknowledge that, as Mr Carden said, MAFF "have given an account chapter by chapter of how things went against plans",[19] albeit in very general terms. However, we feel it would be a useful exercise for the Department to note the background to and effect of any major divergences between planned and actual expenditure in the reporting year. On a similar point concerning ease of reference, we note Mr Carden's observations that there is Treasury interest in separating material about the past year from material about the year ahead. This has both advantages and disadvantages. It would allow for crisper documents, but in the framework of three year spending plans it is helpful to look forward and backward to assess progress made on objectives.

MAFF's Business Plan

9. This is only the second occasion on which MAFF has produced a Business Plan.[20] The general Plan for the whole Department is sent to every member of staff so that "he/she can understand how his/her work contributes to our overall success".[21] Beneath this "overarching" document are "more detailed plans that are produced group by group within MAFF".[22] We observed that a number of changes had been made to the main Business Plan in 2000-01 when compared with the previous version. For example, the items on output and performance measures for the PSA targets and the section on "Working with and for Others" had both been excluded.[23] Mr Carden admitted that MAFF was "in the process of feeling our way" in producing Business Plans and that he felt, on re-reading this year's plan, that "it might benefit from putting some material back in".[24] We suggest, by way of additions, that it is particularly important that MAFF spells out in its next Business Plan how the Ministry relates to other bodies, including the devolved institutions in Scotland, Wales and Northern Ireland and newly established organisations such as the Food Standards Agency and the Agriculture and Environment Biotechnology Commission. Mr Bender expected that "individual groups" within MAFF would report on the output and performance measures and was concerned that "there is a balance on business plans between the comprehensiveness and the useability to staff in the Department".[25] His colleague, Mr Carden, stressed that, whilst it was intended that the different levels of business plan "should all fit together", the group plans were "the documents which are of most use to staff" working in each area.[26] We recommend that the Business Plan also include a summary of the hierarchy of objectives, PSA targets and output and performance measures. This would be useful as an addition and would help MAFF staff in particular by giving an overview of the Department.

10. We welcome the fact that staff were involved in building up the Business Plan this year, through "a process of dialogue" on the group plans and "a distillation of more detailed plans" into the main document.[27] MAFF is also formally consulting staff on its views on the finished plan.[28] Mr Bender described the aim of the process as "to get the best document that will ensure the staff know where they fit into ... what the Department is trying to achieve."[29] However, he accepted that there was a need to improve business planning "across Government and in MAFF",[30] including addressing the question of the "hierarchy ... between the overarching business plan and group business plans within it".[31] We agree that MAFF still has improvements to make in the preparation of its Business Plan. Staff involvement will become even more important once the personal objectives of staff are linked to the business plan of the unit in which they work.[32]

Aims, objectives and targets

11. Last year we spent a considerable amount of time examining MAFF's aims, objectives and targets, and how they relate to one another.[33] We had particular concerns about the nature of some of the targets set where MAFF had no real influence over the factors being measured, for example reductions in the number of BSE cases. This year, whilst we were pleased to hear that MAFF "have largely met the targets of the Public Service Agreements",[34] we were therefore not surprised that "one or two" targets had been missed, either for the reason specified or because they were set at 100% and, as Mr Carden explained, "for practical reasons you are bound to fall short of 100 percent in reality".[35] He gave as examples numbers of farmers visited with BSE suspects or of animal welfare cases inspected, where the requirements are for visits within one day.[36] We sympathise and attach no blame to MAFF for missing such absurd targets. The process of agreeing targets for the period covered by the 2002-2005 Comprehensive Spending Review has already begun, giving MAFF an opportunity to put forward constructive proposals in this regard. Mr Carden told us that discussions were taking place with the Treasury "with a view to having a set of targets for the next spending period which ... are more realistic about what can be achieved within the spending period from the time the target is set".[37] Mr Bender agreed that it is important to measure "the right things in order to achieve the outcome one is seeking to achieve".[38] We look forward to the publication of the new targets which we expect to reflect the commitment given in response to our Report last year that MAFF "will seek to ensure that there is a range of related targets to enable both annual assessment of progress and longer term planning".[39] However, we caution MAFF to remember that not everything that is desirable is measurable and hope that in setting and working to achieve targets, senior management within MAFF will take this into account.

12. Mr Bender told us that he had been struck on coming to the Department by the thought that MAFF, "perhaps more than most other departments", cannot deliver its objectives to ensure the provision of high quality food, to promote modern, competitive farming and fishing or to protect the environment "without working in partnership with others".[40] He added that he "would not be surprised if, at the end of the Spending Review, we emerged with a joint Public Service Agreement between MAFF and DETR on rural economies".[41] The outcome of the cross-departmental review of rural and countryside programmes, to which Mr Bender's forecast was linked, is detailed in the Comprehensive Spending Review document published on 18 July 2000.[42] It is a welcome step forward towards integrated policies and programmes and we look forward to receiving details of this development. If these partnerships are to work, the need for openness in planning and communication will be paramount.

Staff and Modernising Government

13. MAFF's Agencies and Information Technology Directorate have obtained Investors in People (IiP) status. The rest of the Department, accounting for 60% of MAFF's staff, "did not meet the standard when assessed in November 1999".[43] Mr Carden admitted that this "is a serious concern for us" and went on to say that "The assessment gave us a very clear indication of changes that needed to be made".[44] The first reassessment took place after our evidence session and MAFF will not know if it has achieved IiP status for the rest of the Department until later this year.[45] We note that both Mr Carden and Mr Bender "attach importance to this issue".[46] We agree that IiP is important, more for what it signifies than for the award itself, and are concerned at the failure of MAFF to achieve it. Following the evidence session, MAFF provided an update of progress on IiP and we expect to receive further reports of major improvements very shortly.

14. Staff are central to a number of the 60 commitments MAFF made in response to the Modernising Government White Paper.[47] MAFF's vision and values were set out in draft form in this document. Their final agreement was "held up pending [Mr Bender's] arrival" but following further consultation with staff, he expected them to be published in the autumn.[48] We welcome the involvement of staff in this process. We believe that the commitment to extend 360 degree feedback (a process by which a leader gets feedback from the staff who work with and for him[49]) to all MAFF senior civil servants will be valuable to MAFF. Mr Bender told us that "A good leader is one who is aware of what his own people think of him and his peers".[50] We agree and trust that such feedback will be acted upon appropriately by MAFF's leadership team. Finally, we note the importance Mr Bender attached to the Modernising Government programme, and we shall doubtless find a future opportunity to examine progress made.[51]