Memorandum submitted by the Country Land
and Business Association (CLA) (RPA 08)
1. The CLA represents the interests of 40,000
members in England and Wales who together manage over half the
agricultural land of those countries. Most of our landowning members
are applicants for the Single Payment, many of our professional
members are also acting on behalf of many other farmers, both
landowners and tenants. We therefore have a very strong interest
in the smooth functioning of the Single Payment System (SPS).
We are glad that the EFRA committee has decided to look into this
matter which is of great concern to our members.
2. Our overall view is that from the outset
RPA massively, and negligently, underestimated the work involved
in the new payments system. The introduction of a wholly new payment
regime was combined with a project to digitally map the whole
of the two countries, and at the same time introduce a new environmental
stewardship scheme covering 80% of holdings. CLA questioned senior
RPA staff at the start of the project, seeking assurances that
sufficient resources were to be allocated to the task. Clearly,
despite what we were told at the time, they were not.
3. RPA has failed in delivery on processing
the SPS applications, and particularly the land mapping required
for the Rural Land Register. They, and DEFRA, have been excessively
secretive about many aspects of the SPS particularly the progress
they were making from the closing date for applications (16 May)
until the first progress data was made available in late October.
This denied the chance for the industry to apply pressure earlier
to help RPA get the resources it needed. In turn this now means
that RPA are planning, unlawfully, not to comply with the requirement
specified in the regulation that entitlements should be definitively
established by 31 December 2005.
4. The present expectation is that entitlements
will not be established until late February thereby reducing the
window for transferring entitlements from three months to just
over one month. This potentially has serious implications for
transferees' ability to make their 2006 applications. CLA members
are affronted that the regulations affecting the administrators
are wilfully ignored whereas they are applied ferociously, to
the letter, on applicants.
5. We would make two other general remarks.
First, the problems are not solely of RPA's making, to get fully
to the bottom of the poor decision making requires detailed knowledge
of the DEFRA-RPA decision process. No doubt DEFRA in turn will
seek to shift blame to the EU Commission who have indeed been
slow in producing decisions at a number of points. However, the
fact that SPS processing in England has been slower and more painful
than in other regions of Europe indicates clearly that much of
the responsibility lies in London and Reading.
6. Second, we wish to record that RPA operational
staff in the regional offices dealing with our members, and operational
staff in Reading who interact with stakeholders, have tried at
all times to be helpful. Whilst there have been cases reported
of inexperienced staff, and frustrations from time to time, we
have had many members praise the helpfulness of the staff. The
most usual comment has been that it is the system they are working
with that has been at fault. Thus the principal problems we refer
to arise from DEFRA/RPA management decisions not operational staff
performance. We have, however, encountered unnecessary obstruction
in providing information about the guidance used to make decisions
about hardship and cross compliance.
7. Your inquiry is confined to four points
so we will address them directly.
Why is the RPA unable to make payments under the
SPS at the start of the payment window in December?
8. The major reasons are:
(a) that DEFRA Ministers chose the most complicated
implementation scheme imaginable allowed by Regulation 1782/03
(this description is, almost verbatim, a quotation from a very
senior DEFRA official at a Stakeholder meeting in October 2003),
(b) the computer software systems used both
for mapping and processing seems not to have been fit for purpose,
(c) this already daunting task was further
complicated, and confused, by the decision to implement a complete
overhaul of the Environmental Stewardship schemes the same year.
9. A key explanatory factor in the slow
processing is the land mapping involved in these schemes. We do
not criticise the ambition to have a comprehensive, detailed,
digitised mapping of the whole of rural England. In the long run
this will be an aid to more precise land management for those
operating the land too. We do criticise the complete misjudgement
of the size of the task and the resources required to accomplish
it. We also suggest that if there was a real partnership and information-sharing
approach between DEFRA and its agencies and those on the ground
who know the lie of the land, then this could have been avoided.
We have repeatedly asked DEFRA and RPA for factual information
which has not been provided.
10. We understand that the SPS has involved
mapping in the order of half a million additional parcels of agricultural
land. Because Stewardship involves hedges, woodland and other
environmental features this has added hundreds of thousands more
such parcels to be mapped. (Note: we cannot be exact about these
statistics because RPA and DEFRA treat this information as state
secrets and do not publish clear information, this is an example
of the secrecy culture endemic in these organisations.) As this
gigantic mapping process involves new custom built computer software
and interactions by mail and telephone with 120,000 farmers, it
seems highly predictable that it would be a very difficult task.
11. Furthermore throughout autumn 2004 and
spring 2005 there was a complete lack of clarity, and confusion
out in the countryside, about what land should be mapped for which
scheme. It only transpired in July 2005 that RPA decided to prioritise
the mapping work for SPS. It had never dawned on us that they
could possibly have decided otherwise. It seemed a complete no-brainer
that as the SPS scheme provides an income stream critical for
the survival of many farms, it had a once-for-ever deadline, and
involved in the region of £1.7 billion it should take precedence
over a scheme with a continuous open-ended application period
and involved circa £200 million. It might be forgivable that
there was confusion amongst applicants about which land should
be mapped and where the priorities lie; it is unforgivable that
there was confusion about priorities about this in the RPA.
12. Our main criticism is that, despite
warnings, the magnitude of the task did not seem to be appreciated
until as late as July 2005. CLA staff repeatedly asked RPA through
the Autumn of 2004 if they had sufficient resources. The response
was a calm (we now know, complacent) reassurance that everything
was fine. We were told last autumn that the reallocation of RPA
staff from the final processing of livestock claims to deal with
SPS work would provide the required resources. We do not know
enough about the skills possessed by staff and skills required
for RLR mapping versus livestock claim processing to comment on
these detailed staff management issues. However, it eventually
became apparent that the resources required for the mapping work
were just not available.
13. There were good contacts between RPA
and stakeholders throughout the whole SPS design period and up
until the closing date for applications, 16 May 2005. Then two
strange things happened. First, the stakeholders meetings were
diverted entirely to consideration of the 2006 SPS application
forms. This was useful and necessary work, but we could not understand
why it completely displaced any comment on the 2005 processing.
Second, the meetings stopped in July and, despite our agitation,
did not resume until October. Despite many requests for statistics
on the progress of processing, as were being circulated by the
Welsh Assembly Government, none were provided by RPA until late
October and these only after we had written in strong terms to
the CEO of the RPA copied to DEFRA explaining that we had lost
confidence in the RPA's ability to perform its one and only task—to
make Rural Payments.
14. It is staggering to us that the decision
to outsource the RLR mapping for all but seven counties (even
now we have not been told which these counties are—more
needless secrecy) was evidently not taken until autumn 2005. We
do not know the precise date, nor the details of the decision
process to outsource the mapping. We urge the Committee to probe
this in detail. When did RPA first decide they could not cope
with the mapping? When did they first request the resources to
do this? Presumably the financial consequences were an important
consideration in all this. There was evidently a huge under-budgeting
of the implementation costs of the scheme chosen by DEFRA Ministers.
It would be worth looking back at the Regulatory impact assessment
of DEFRA's decision to see if any consideration was given to this
mapping aspect. There is also some doubt about the process of
re-integrating the outsourced mapping work back into the main
system. It is worth probing the potential for this to go wrong,
and delays it might cause.
15. RPA will doubtless point to the huge
expansion in their number of "customers" as they like
to call us. They often quote the comparison of 120,000 SPS applicants
compared to 70,000 IACS customers (ie the old arable, beef and
sheep schemes). They really should add the number of specialist
milk and sheep producers who they were aware of even if they did
not have all their land mapped, this was probably another 20,000
farmers, thus the genuinely new customers number about 30,000.
This was predictable given the, correct in the view of the CLA,
decision to take a wide definition of agricultural land including
such areas as grazed woodlands, orchards and land grazed by horses.
More sharing of data and detailed discussion with stakeholders
could have enabled us to anticipate these magnitudes.
16. There are many other complicating factors
which make the initial set-up and processing of the SPS a genuinely
complex and highly demanding task. These include:
— Dealing with the cross boundary
farms (across the three English regions as well as Wales and Scotland),
— Hardship processing (16,000
cases),
— National Reserve applications
(18,000 cases),
— Fruit, Vegetable and Potato
Authorisation applications (numbers not revealed),
— Common Land applicants (numbers
not revealed), as well as the eligibility checks and cross compliance
checks.
We perfectly appreciate that it is not a simple
matter to process these issues as they require individual attention
and judgements. However, the processing of these has been inhibited
by poor initial design of the application forms and the explanatory
booklet so that to resolve two of these tasks (National Reserve
and FVP authorisations) it has been necessary to go back to applicants
for more information in November.
17. In short, the delayed payment in England
is mostly a result of a massive, and in our view avoidable, misjudgement
(underestimate) of the scale of the task, particularly of the
land mapping. The whole SPS processing task was not only massive,
but also extremely complex, however RPA cannot claim that the
complexity of the task was not realised, it was chosen. The difficulties
the RPA then ran into were then not helped by the failure to share
information and to come clean early enough as detailed above.
The issues involved in making interim payments
in advance of the target payment date of February
18. CLA members would be delighted if it
was possible to make interim payments in advance of February,
for example right now as in Wales and Scotland.
19. The reason this cannot be done is that
for all the reasons explained above, RPA have only processed 31%
of applications to the Level II validation stage (this figure
relates to RPA statistics revealed to Stakeholders on 1 December
2005). Thus even if this stage is sufficient validation to make
an interim payment eg a fraction of the historic reference amount,
only a minority of farmers could possibly benefit. But it is far
from clear what proportion of this 31% are also involved in National
Reserve applications (of which only 2/3rds are "in progress")
or unresolved hardship cases (600) or involved in FVPs or cross
border claims.
20. It not sufficiently clear what degree
of validation is necessary to make any payment at all to applicants
in a country implementing the regional payment system. Does it
require progress on al applications to have some estimate of the
regional element, or can interim payments be made based on historic
reference amounts? The RPA story to Stakeholders is that they
are working on a parallel processing scheme which could enable
interim payments in February. They assert that it is impossible
to make interim payments before this date as they will not have
sufficiently validated claims, and they cannot make payment if
claims have not been sufficiently validated. The Committee is
urged to press RPA to explain clearly why those claimants who
have reference amounts which have been validated, eg by 7 January,
could not receive an interim payment of, eg 80% of this historic
reference amount, soon after that date. We simply do not have
the full explanation of this.
21. In fact, given that RPA announced the
February/March period during which they still say they will make
full payments to 95% of applicants, many months ago, this has
been factored into most English farmers' cash flow expectations
and planning. Our principal concern now is that they may not achieve
this target. If they have to revert to interim payments in February/March
not only is there a cash flow consequence of this, but if farmers
do not know definitively what their total entitlements are then
(a) they cannot transfer them, and (b) depending how late in April
or even May, the final settlement comes, there is a danger this
will interfere with their ability to make their full claims in
2006.
22. We therefore urge the committee to probe
the RPA about the decision process, the timing and the detailed
nature of the RPA's contingency plan for partial payments in February/March—which
part of the payments, to which classes of applicants? Also it
would help farmers to know if this contingency has to be invoked,
and our assessment is that the odds are not far short of evens
that it will, then when will definitive establishment be achieved,
and when will the balance of payments be made?
What impact has the RPA's own change management
programme had for the introduction of the SPS and the new Environmental
Stewardship schemes
23. The CLA is not in a position to answer
this and we are very much looking forward to seeing the answers
from RPA and the DEFRA ex-Permanent Secretary who was presumably
behind these changes.
24. From a customer point of view there
has definitely been a loss in customer service, and coupled with
the problems detailed above a loss of customer confidence in the
RPA. Previously there was a chance that a farmer could know the
person to contact in a regional office. Now there is only the
anonymous, first name only, voice at a call centre, or reference
to a staff member in a distant office. After requests by stakeholders
that all letters be clearly signed and staff give more than first
names, RPA only yesterday (1 December) agreed that letters should
be signed and staff may give surnames, although individual staff
have the right to decline this.
25. Members have commented on the frequency
with which they have been referred from one RPA office to another,
and sometimes back to the one they started at. This has meant
that just as an applicant is getting to know the staff member
dealing with his case, the staffer is moved and all continuity
lost.
The extent to which the RPA's IT systems have
failed to evolve to deliver what is required
26. This is again a matter on which outsiders
do not have the information to answer. We are given to believe
that the IT system designed and delivered by Oracle and Accenture
(we understand) has been a failure. The system was unstable right
through until the new release at the beginning of October. We
understand that it simply could not cope with the number of people
working on the system at once. Even the latest release has continued
to have problems. It would be good for the Committee to probe
the design characteristics of the system. What numbers of applicants
was it designed to process? What number of operatives were expected
to be working at the same time? It would be helpful to pinpoint
if the problem was inadequate specification of the system capacity
required or poor IT system design that was not able to deliver
the capacity promised.
27. It is clear to us that the IT mapping
systems simply could not cope with large estates with maybe a
few hundred fields. There are instances where whole blocks of
land of regular, previously mapped, fields have just disappeared
from the system causing hours of work to discover why and retrieve
them. The software seems to have been designed in the absence
of knowledge that such large holdings existed. But we also understand
that a high proportion of the problems concern quite small slithers
of land, and strips (on the maps) the width of a pencil. One wonders
if an unnecessary degree of accuracy is being pursued. Many members
have told us of land appearing on their maps which relate to other
counties, this is removed yet reappears—another indication
of unstable software. Another indication of the poor quality of
the software systems are tales we have heard where the system
simply goes down when the scale is changed (as the operative is
talking to our member) and all concerned drum their fingers whilst
the system is restored. It would be useful if your committee could
talk to operators of the RLR computer mapping system to gather
first hand information.
FINAL REMARKS
28. A regionally based SPS with fully digitised
maps was always a mightily ambitious undertaking. If, as we sincerely
hope is the case, RPA do manage to overcome their difficulties
and misjudgements, and make 96% of payments by the end of March
2006, then this will be a good achievement. It is in the interests
of all English farmers that this is the case, so we urge the committee
to focus its efforts constructively to help identify whatever
is needed to bring about this result. The time for post-mortems
is when the body is dead, right now we want it to be brought to
full health and vigour.
29. The CLA will happily provide more information
if required and meet the rapporteurs if this would be helpful.
Allan Buckwell
Chief Economist and Head of Land Use
December 2005
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