UPDATED GOVERNMENT RESPONSE TO THE AGRICULTURE
SELECT COMMITTEE'S TENTH REPORT ON THE REGIONAL SERVICE CENTRES
CAPPA: Customer Take-Up of Electronic
Forms
1. The Government welcomes the Committee's report
on the planned restructuring of MAFF's Regional Service Centres
(RSCs). The Government's response to the specific observations
made by the Committee is set out below. This response updates
some elements of the Government's earlier response and it addresses
two further issues which the Committee raised when they met officials
on 2 October to discuss progress on implementation of the restructuring.
For ease of reference the Committee's observations are repeated
in bold type.
Functions
We believe that there is a strong case for re-organisation
to enhance MAFF's policymaking role at regional level, to
make the processing 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.
2. The programmes to create the new CAP Payments
Agency (CAPPA), to establish a MAFF presence in Government Offices
from April 2001 and to create a new regionally based service (the
Rural Development Service (RDS)) whose primary function will be
to deliver the England Rural Development Programme (ERDP) are
all on track. Detailed work on designing the new organisations
and clarifying how services will be delivered in future is progressing
well but will not be complete for some time. The principal aim
for the current financial year is to take the design work for
CAPPA to the point at which an immediate start can be made in
2001/02 when the funding for the project becomes available.
3 The vision for CAPPA is to create, through
the merger of the payment functions of MAFF's RSCs and the Intervention
Board (IB), a single, customer focused CAP Paying Agency, respected
as the European leader in efficient and effective administration
of CAP schemes, and as an authoritative source of advice on CAP
schemes.
The CAP Payments Agency
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 to farmers
who are not confident with new technology.
4. CAPPA will take advantage of the benefits
offered by modern technology to offer a streamlined, quicker and
more efficient service to farmers and traders. It will seek to
minimise the bureaucracy associated with CAP administration, and
will work closely with farming industry organisations and other
local partners such as livestock markets and rural post offices
to ensure that all farmers have access to local advice and assistance
with electronic claim submission. The Government is keen for the
farming industry to reap the benefits offered by new technology
and hopes that farmers will quickly see that e-forms will reduce
the burdens associated with submitting CAP claims and result in
payments being made more quickly. Paragraphs 16 to 31 below discuss
the assumptions on take-up of electronic forms and the plans to
develop a network of local advice and assistance. However there
are no plans to withdraw the facility for submitting claims on
paper in the foreseeable future.
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
functions 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. 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. MAFF recognises that the restructuring programme
as a whole, and CAPPA in particular, is ambitious, complex and
risky and that programme management skills of a high order are
needed to deliver it successfully. An experienced Programme Director
for the CAPPA Programme was appointed at the end of March 2000
and will lead the programme team until the Chief Executive takes
up post. External recruitment of the Chief Executive is nearing
completion and an appointment should be made during November.
An external consultant is leading the team drawing up the detailed
IT strategy for CAPPA, which will consider all the options for
sourcing the new systems.
6. Programme management expertise has also been
brought in to assist with the MAFF in the Regions Programme, which
covers both the establishment of the MAFF presence in the Government
Offices and the creation of the Rural Development Service.
Public 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.
7. The CAPPA programme team is drawing on the
recent Cabinet Office review of major Government IT projects,
Successful IT, in planning for the procurement and development
of the new systems. We are also taking heed of the report of the
Public Accounts Committee First Report (Session 1999-2000)
Improving the Delivery of Government IT Projects. As the Committee
recommends, the new systems will be thoroughly trialled and tested
before the existing systems are decommissioned.
8. Comprehensive risk registers have been drawn
up covering the Restructuring Programme as a whole and risks will
be actively managed throughout the transition to the new structures.
Regional strategy
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.
9. The role and responsibilities of the MAFF
Director in Government Offices have been worked out in consultation
with the Regional Co-ordination Unit based in DETR and with the
GO Regional Directors. The high-level objective is to ensure that
MAFF's participation in the GO framework contributes effectively
to the attainment in the regions of the Department's objectives
as set out in the PSA, and to the more effective delivery of Government
policy generally.
10. The MAFF Director will represent the Minister
and the Department in the region, handle relations with stakeholders
in the region, chair the Regional Programming Group for the ERDP,
and contribute to work on land use planning, EU structural funds,
information and emergencies in areas relevant to MAFF. In addition
he/she will accept responsibility for cross-cutting and corporate
functions and other areas of activity as determined by the GO
Regional Director. Selection of the MAFF Directors is now under
way, and GO Regional Directors are participating in the selection
process. Briefing and training for the MAFF Directors will be
arranged in the New Year.
Local services
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 clear idea of
who they are reporting to in terms of management.
11. Paragraph 4 above outlines our intention
to work with a variety of partners to provide assistance to farmers
in using new technology. As part of the detailed planning to maintain
business continuity during the transition to the new CAPPA systems,
we will consider a wide variety of options for offering face-to-face
contacts with farmers to deal with their queries over CAP claim
forms.
12. The new Rural Development Service (which
will be part of MAFF's Rural Development and Environment Group)
will bring together the technical expertise currently in FRCA
and the administrative experience of the RSCs so as to ensure
effective delivery of the ERDP and other MAFF services in the
Regions. It will provide a high-quality local service to farmers,
working with them to draw up agreements under the agri-environment
schemes and other schemes covered by the ERDP. It will operate
on the basis of GO regional boundaries and will provide technical
advice and assistance to GOs as well as to MAFF Headquarters.
It will work closely with regional partners including Regional
Development Agencies and the Small Business Service. The new Farm
Business Advice Service for farmers and growers which was announced
by the Minister of State (Joyce Quin) on 10 October will be delivered
by the Small Business Service through the Business Links network.
Conclusion
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 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.
13. The Committee seeks clarification on how
the various initiatives covered by the restructuring programme
fit together. The programme consists of three elements:
- The establishment of a new CAP Payments Agency
(CAPPA) which will take over from MAFF and IB the processing and
payment of claims from farmers and traders under all CAP schemes;
- The appointment of a MAFF Director, with appropriate
support, in each Government Office for the Regions;
- The creation of a new nationally managed but
regionally based service within MAFF's Rural Development and Environment
Group (the Rural Development Service) whose primary role will
be delivery of the ERDP.
14. All three elements of the programme are designed
to enable MAFF to enhance its ability to deliver high-quality,
responsive public services and to improve the quality of its contribution
to the policy making process at regional level. The proposed restructuring
of the RSCs, IB and FRCA will allow MAFF to create new organisations
each clearly focussed on its core business and set up in a way
which maximises efficiency and facilitates partnership working.
15. The Department provided the Committee with
copies of the business case, which they discused with officials
in October. We will provide the report on the responses to the
consultation as soon as it is available.
16. The restructuring programme is a key element
of MAFF's response to the Modernising Government initiative.
MAFF Ministers and the Department's top management are fully committed
to seeing it through to a successful conclusion.
17. When the Committee met officials on 2 October,
they asked for further detail about the planning assumptions on
take-up by farmers of electronic forms. The following paragraphs:
- outline the assumptions on customer take-up made
in the CAPPA Business Case;
- explore evidence of customer take-up with MAFF
and in other public sector electronic service delivery projects;
- explore levels of internet usage amongst the target
customer base;
- outline the approach to obtaining customer take-up
for CAPPA.
Business Case Assumptions
18. CAPPA will be created by merging the CAP
payment functions of the MAFF RSCs and the Intervention Board
(IB). CAPPA's customers will fall into two broad communities with
different aptitudes for adapting to technological change: farmers
(MAFF RSC and IB customers) and agricultural commodity traders
(IB customers). The CAPPA business case assumed that farmers and
traders would react differently to the introduction of new technology
in their dealings with Government: farmers have been assumed to
be less drawn to new ways of working and the use of electronic
access routes, whilst commodity traders (mostly large agri-businesses
and food manufacturers) were assumed to embrace the benefits e-business
could offer and to be keen to exploit them in their dealings with
Government. Indeed, there is a perceived demand from those in
the trading community to communicate electronically with Government.
19. The detailed assumptions on take-up included
in the financial model are outlined in the table below. As yet,
there is very little real evidence available on the take-up of
electronic public services, other than pure information provision
across the public sector. In practice, MAFF, with the Inland Revenue
and Customs and Excise, are among the leaders in delivering interactive
electronic services. The assumptions made in the Business Case
are therefore very conservative.
20. PA Consulting reviewed a BT/MORI survey of
predictions of take-up across the UK public sector in April 2000.
It is this baseline that has been used in the CAPPA Business Case,
to derive the take-up profile below.
| Customer Take-up for Internet Based Forms
| 2001 % | 2002 %
| 2003 % | 2004 %
| 2005 % | 2006 %
| 2007 % | 2008 %
| 2009 % | 2010 %
|
| Baseline take-up | 15
| 15 | 24
| 31 | 35
| 38 | 41
| 43 | 44
| 44 |
| % IB Schemes in scope |
40 | 50
| 80 | 100
| 100 | 100
| 100 | 100
| 100 | 100
|
| % take-up for IB schemes in scope
| 45 | 45
| 54 | 61
| 65 | 68
| 71 | 73
| 74 | 74
|
| % MAFF Schemes in scope
| | 30
| 60 | 100
| 100 | 100
| 100 | 100
| 100 | 100
|
| % take-up for MAFF schemes in scope
| 5 | 5
| 14 | 21
| 25 | 28
| 31 | 33
| 34 | 34
|
21. Given the differences in customers' knowledge
and aptitude for new technology outlined above, the assumptions
are that take-up of electronic applications for Intervention Board
customers will run at 30% above the average for Government Departments,
and 10% below the average for MAFF customers.
Evidence from other public sector electronic
service delivery projects
Electronic IACS Application - Pilot Project
22. A pilot project to trial electronic submission
of the IACS/AAPS application form took place in Spring this year.
The IACS application forms are complex and time-consuming to complete
and process. MAFF's electronic alternative aims to reduce the
amount of time taken to complete the forms and reduce the number
of errors contained within them. Following the successful pilot,
a full implementation of the 2001 electronic IACS application
form is planned, which will allow applicants across England to
submit their claims electronically. The lessons and feedback from
the pilot project are being used to enhance the electronic forms
for the national roll out of electronic IACS applications.
23. An estimated 15% of IACS applicants in the
Anglia region indicated their interest in participating in the
pilot. Of these, 220 applicants were selected to take part. 73%
of participants successfully completed their forms electronically,
with 70% commenting that they intend to submit their forms electronically
in the future. A further 18% confirmed that they would also submit
claims electronically in the future providing some changes were
made. If these figures were extrapolated across England and across
schemes, it would be expected that a conservative estimate of
8,000 forms would be received electronically in 2001. This equates
to a take-up of some 10% of IACS applicants, double the level
of take-up assumed in the CAPPA Business Case for 2001 and 2002.
This reinforces the point that the CAPPA Business Case was based
on prudent assumptions regarding customer take-up.
CLICK Project in Herefordshire
24. MAFF has instigated a pilot project intended
to bring the benefits of new technology to farmers and their families
in Kington, Herefordshire, one of the most rural counties in England.
One of the many benefits being offered is the provision of a range
of claim forms for agricultural subsidies electronically over
the internet. 80 farm businesses attended a MAFF demonstration
of the project's website capabilities and benefits. 79 have signed
up to be users of the site. This high level of take-up demonstrates
a willingness on the part of farmers to engage in new ways of
dealing with Government, and of harnessing the benefits new technology
will bring to their businesses.
25. The pilot project will run until the end
of next year, and lessons will be used to inform the way CAPPA
will interact with its customers.
Inland Revenue
26. The one major example of electronic service
delivery by Government so far is the Inland Revenue's self-assessment
income tax returns. Early indications are mixed. So far only one
"self assessment" taxpayer in 400 has sent back a return
to the Inland Revenue via the internet (23,000 in total). However,
this low take-up may have been due to software problems. Another
80,000 people have registered on the new system electronically
and many of these are expected to file electronic returns by the
end of January 2001, the final deadline for figures relating to
the 1999-2000 tax year. The CAPPA Team will ensure that the lessons
learned from Inland Revenue's experiences will be incorporated
into the CAPPA Programme.
Evidence of Internet Usage by Customers
27. There are few studies available which give
the picture of internet usage by CAPPA's customers. However, as
part of the Action Plan for Farming, MAFF commissioned a study
by ICL and ADAS on farmers' IT needs and MAFF's role in e-business.
The ADAS Farmers Voice 2000 Survey was consequently extended to
provide data on the current level and use of IT among farmers.
The full report is part of MAFF's ongoing work under the Agricultural
Strategy, and it contains some material relevant to the issue
of take-up. A brief summary of the findings is set out below:
- Out of a total of nearly 2,000 farm businesses
surveyed, 71% responded that they owned a computer, with a further
5% indicating they intended to do so shortly. Taking account of
the structure of the ADAS survey, the researchers concluded that
between a half and two-thirds of all farmers are likely to have
computers.
- 43% of those who said they owned a computer
had bought it in the last year.
- As would be expected, larger farms (83%) were
proportionately more likely to own a computer than medium sized
(69%) or small farms (62%).
- Computer ownership also differed by sector:
Livestock farms (58%) were less likely to own a computer than
other farm types.
- 86% of those who owned a computer, used it
for business purposes.
19% of computer owners said they were "very
keen" to use electronic forms to claim subsidies. A further
42% said they may be interested.
How CAPPA will seek to obtain customer
take-up
28. As explained above, the CAPPA Business Case
assumed a conservative level of take-up for electronic services
and claim forms by customers. However, the aim will be to encourage
as many customers as possible to use the electronic services available
and share in the benefits they will offer, namely:
- claim forms pre-populated with the most up-to-date
data held by CAPPA's databases;
- "intelligent" claim forms, which
will be more user-friendly and easier to complete;
- on-line validation of claims to prevent simple
errors and omissions which can result in penalties being applied
to claims;
- finally, claims submitted electronically will
be more likely to pass initial validation checks and as a result
will be processed more rapidly.
29. However, take-up will not happen on its own.
There are significant barriers to the use of electronic services
and CAPPA will need to address and overcome these if it is to
be successful. In the first instance, it will be necessary to
examine the need for cost effective incentives for customers to
access CAPPA's services directly. But an inclusive approach to
service delivery is also required: it will be necessary to set
up a national network of third parties to help those either unwilling
or unable to submit claims electronically themselves.
30. On incentives, at this stage nothing is being
ruled out. Areas such as the provision of low cost PCs or subsidised
internet access routes (through PCs, digital TV, WAP etc.) are
being examined carefully. That said, any incentives must meet
the criteria of being:
- value for money;
- cheap to administer; and
- logistically possible.
31. Not every customer will have access to the
internet, and this has been reflected in the need to promote a
network of third parties who could assist in the submission of
electronic forms. Examples of potential third parties include:
- land agents and agricultural consultants, who
fulfil this role already;
- farm management software providers;
- internet bureaux: internet terminals situated
in convenient local locations e.g. rural post offices, livestock
markets, agricultural colleges etc;
- internet portals, who would provide access
to the electronic forms and provide online help and guidance.
The proposed MAFF electronic Rural Portal, which is the subject
of a scoping study, would have an important role to play here.
32. CAPPA will also need to encourage IT training
among its customers and provide adequate support arrangements
for those using the electronic forms. Support will need to be
responsive to the needs of the customer, particularly in its opening
hours.
33. Finally, a concerted communication effort
will be required, to explain the benefits to customers and ensure
that they are aware of the new opportunities open to them. This
communication effort will be focussed on the roll-out of electronic
IACS applications.
The NURAD Project
34. The Committee also asked for further information
about the NURAD project and the extent to which the work done
on NURAD will contribute to CAPPA's new IT systems. The Business
Case for NURAD showed total costs of £41.9 million over the
7 year life of the project, with IT development costs of £29.3
million over the period covered by the Comprehensive Spending
Review (1999/00 to 2001/02). Total expenditure from April 1999
to September 2000 was £10.7 million.
35. The main products delivered by NURAD are
the outputs from a number of strategy and architecture studies
and analysis of business processes. These include definitions
of models for CAP scheme processing and the technical architecture
for delivery, including a Geographic Information System element
for area-based schemes and electronic submission of claims, both
of which are being taken forward. Other NURAD products are informing
the development of the CAPPA IS/IT strategy. A number of elements
of the NURAD work are being progressed to protect business continuity
during the transition to the full CAPPA systems, and to inform
the development of IT support for implementation of the ERDP.
36. A number of capital assets purchased under
NURAD will be deployed for CAP administration, either within the
CAPPA programme, to ensure business continuity until CAPPA is
fully operational, or to implement the ERDP.
Ministry of Agriculture, Fisheries and Food
November 2000
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