Select Committee on Environment, Food and Rural Affairs Fifth Report


1.In making its decision to adopt the 'dynamic hybrid' approach for implementing the Single Farm Payment in England, we believe Defra gave insufficient consideration to the administrative complexity of the chosen model. Defra should also have considered postponing the implementation of the SFP until 2006, as allowed for in the CAP reform regulation, to allow more time for preparation, thus avoiding the problems that are now evident. (Paragraph 5)
2.We believe that the lack of foresight shown by the RPA, and the apparent lack of analysis about the possible impacts of the implementation model, are not acceptable. Further, we believe that both Defra and the RPA should have anticipated the extra work involved in this project, had they taken into account the policy effects of the SFP which, by definition, increased the volume of eligible land over and above the amount covered by IACS. (Paragraph 7)
3.For individual businesses, on the margins of viability, the added costs of interest and arrangement fees could be too much to bear. It would be unacceptable if farms were put out of business due to delays by the RPA in making payments, and the Government should make clear what steps it intends to take to ensure that this does not happen. The Minister appears to have based his assessment of farm viability on an analysis of "average" farms; in doing so he has, in our opinion, shown an unacceptable degree of complacency about the financial impact on the industry of a delay in making the SFP. (Paragraph 8)
4.We were alarmed to learn about the scale of the cost overrun on the revenue side of the RPA's IT contract with Accenture, given that it amounted to a doubling of the original budget. We are concerned that the nature of the contract agreed between the RPA and Accenture apparently allowed for the costs to increase so dramatically, and thus seemingly ignored the practical workload implications of the SFP policy agreed by Ministers. (Paragraph 9)
5.The Committee is particularly concerned about the IT problems encountered by the RPA. We believe that, while such difficulties are not uncommon in projects of this nature, with better planning and monitoring many of the problems could have been avoided. The importance of the IT systems was stressed in the Committee's previous scrutiny of the RPA. We regret that the Government appears to have taken little notice of our previous warnings. (Paragraph 10)
6.While we recognise that a peak in workload is likely when introducing a new system, we believe that the extremely long hours currently demanded of the RPA's staff should not have been necessary, had the project been better managed. We acknowledge the effort and commitment of RPA staff, in the face of large-scale redundancies and the requirement to work long hours. We recommend that the Agency's staff, including those on temporary contracts, should receive assurance from RPA management regarding their future employment once the current intensive period of work activity is over and payments have been made for the 2005 scheme year. (Paragraph 11)
7.We are deeply unimpressed by the failure of Defra and the RPA to plan properly for the process of administering payments under the Single Payment Scheme. This has led to English farmers being disadvantaged in comparison with those in other parts of the UK, who have already received a partial interim payment. We were also dismayed at the complacency of the Minister, who refused to admit that any mistakes had been made or that anything could have been done differently to avoid the problems. (Paragraph 12)
8.Most significantly, we were staggered that, so close to the proposed date for making payments, and nearly a year after that date was announced by the RPA, the Minister could still not give us a definitive statement about when payments would be made, or whether they would be full or partial payments. (Paragraph 13)
9.  We recommend that Ministers now make a definitive announcement on the timing and nature of Single Farm Payments in England. We further recommend that, if this announcement includes the making of interim partial payments, or further delays, then it should be made in the form of an oral statement by a Minister to the House. (Paragraph 14)

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