Memorandum submitted by the Central Association
of Agricultural Valuers (CAAV) (RPA 10)
EXECUTIVE SUMMARY
The work of the CAAV and its members has meant
that it has been closely engaged with the implementation of the
Single Payment Scheme in the England. A complex reform has been
made more complex by the policy options taken by DEFRA, the evolving
nature of the reform, the co-incidence of the introduction of
the Environmental Stewardship Scheme and the changed RPA IT systems.
It was foreseeable that this situation would add to the burden
of initial implementation both directly and by encouraging natural
reactions among farmers and landowners to optimise their positions
under the new regime using the opportunities available under the
English approach. However, this does not seem to have been generally
recognised by either DEFRA or RPA management in providing for
the delivery of those chosen policy goals. Not only was a major
programme of IT reform underway simultaneously but early IT decisions
on forms sometimes further complicated matters.
1. The Central Association of Agricultural
Valuers (CAAV) is the specialist body representing over 2,000
members practising in agricultural and rural valuations and related
advisory and professional work throughout England and Wales. They
provide professional advice and valuation expertise on issues
affecting the countryside to all who require these services whether
current or prospective owner occupiers, tenants, landlords, public
authorities or lenders and whether farmers, estate owners, conservation
bodies, public organisations or those with other interests.
2. The operation of CAP schemes and the
changes made to them are thus of great practical importance to
members and their clients. The impact of these schemes not only
concerns direct applications for payment but also the many, varied
and often complex interactions between them and changes in land
occupation and ownership, specialist farming systems and the flexible
business structures being used by owners and farmers.
3. The CAAV, accordingly, closely monitored
the development and the implementation of the present reform from
the point when the first papers were tabled by the Commission
in 2002. As well as meeting Commission officials then, the CAAV
has liased closely with the DEFRA and RPA officials responsible
for developing and administrating the implementation of the reform.
The CAAV has been a member of both of the DEFRA stakeholder groups
covering implementation and policy and is a member of the RPA
stakeholder group.
4. As a professional association, it is
not usually the CAAV's position to lobby for particular policies.
Rather, it takes an intense interest in the practicalities of
what is proposed—how it will work on the ground. The diversity
of members' client bases means that the CAAV holds no brief for
any particular interest in the rural world but has to consider
how any measure will work and how it will affect existing businesses,
new businesses, transactions, landlord/tenant relationships, business
contracts, taxation and many other factors.
5. The fundamental importance, scale and
complexity of the reform has meant that the CAAV has run three
major rounds of national conferences since September 2003, produced
two substantial texts providing guidance to members on the evolving
position and handled an enormous number of queries from members
throughout this period. While the reform officially took effect
at the beginning of 2005, there is much that is still unclear
and is emerging. Throughout this process, we have sought to present
practical issues to the policy and administrative processes so
that this reform can be implemented as sensibly as possible.
6. Members will have advised on or drafted
a very large fraction of the SP5 application forms as well as
reviewing the initial SP1 statements, working on forms SP2 to
SP4, SP5e and SP10 and making appeals as well as the many business
and property issues that have arisen.
7. In reviewing the experience of the last
three and a half years of intense activity, and before outlining
its critique of the handling of the implementation of the Single
Payment Scheme in England, the CAAV would like to record for the
Committee its considerable appreciation of the work of the limited
number of officials in both DEFRA and the RPA who have headed
up the operational implementation and negotiation of these reforms.
Just as the CAAV has sought to be as helpful as possible, these
officials have generally been co-operative and understanding and,
within the limits of the regime, often practical in the approaches
they have tried to take (though sometimes constrained by internal
legal advice). In the context of this submission, we believe that
the small team in Reading headed by Bill Duncan has striven manfully
and positively with an enormous task.
8. In summary, the CAAV submits that DEFRA
elected for broader reasons for a complex policy on implementation
which brought with it entirely foreseeable consequences. This
was compounded by the implementation of other major schemes at
the same time. Having taken those decisions, it was then the RPA's
role to administer them. The CAAV does not believe that the RPA's
senior management in planning for this appreciated (or perhaps
were free to appreciate) the scale of what they had taken on,
both in terms of numbers of claimants and the complexity of the
issues. Finally, it appeared that they were often as much the
prisoners as the beneficiaries of their out-sourced IT systems.
9. Before enlarging this analysis, it must
be stressed how fundamental it was to farmers to ensure their
applications were right. The 2005 SP5 forms (with associated options
in revising SP1 Forms, and applying on SP2, SP3 and SP4 forms)
were the one opportunity they had to protect their position for
the future. Many had also to judge their approach to landholding
and tenancy issues. Value lost in May 2005 was value lost forever
while the point of the reform was to expose them to more open
(and so less secure) product markets. Not only was the process
of crucial importance to their economics (with particular options
initially affecting some expanding beef farmers, for example,
by over £100,000 a year) but, amid the detail, it was a demanding
system for many to understand the practical implications for them
and then to complete the forms in an optimal way. Particular complications
arose in the previously commercial world of horticultural cropping
where the additional issue of authorisations has now seen two
years of specialist cropping arrangements negotiated without knowing
whether or not they will attract Single Payment. Not only was
this general difficulty compounded by confused or conflicting
advice from official helplines but also by developing policy as,
say, towards motor sports (and so whether some land was eligible
or not) which only crystallised at the end of the week prior to
15 May while the forms could still be revised in December for
long-term energy crops.
10. Area based implementation—It was
entirely foreseeable (and the CAAV said so in its submissions
ahead of the decision) that the adoption of an area basis for
implementing the reform would bring considerable complication.
This was not merely because of the blend of two payment bases
but more fundamentally because:
— By offering to pay people on
the basis of the area they submitted in spring 2005, a profound
incentive was created for farmers to find additional area.
— As the regional option was (necessarily
under the regulation) based on the area a claimant could hold
in 2005 and considerable forewarning was given of this, it enormously
distorted the land and business structures being used as all potential
claimants sought to maximise their opportunities under the new
system whether by retaining land which would ordinarily be let
or surrendered, or by adapting or freezing their business structures.
This latter factor was compounded by the time
taken to implement the reform given the normal pace of changes
in land occupation and to farmers' businesses in a sector dominated
by small family businesses. The draft Council Regulation was published
in January 2003 with an immediate effect on the land market; entitlements
will not be established and become transferable until spring 2006.
11. Whether or not DEFRA and the RPA believed
their own statistics on land occupation, most of which confuse
more than illuminate, they do not seem to have taken account of
the extent to which the English are a commercial people with flexible
and sophisticated land tenure and business structures available.
Not only did the area choice create an incentive to find area
that had not been previously needed for earlier subsidy systems
but so did the promise of Entry Level Stewardship (ELS) resulting
from the Curry report, also offering an area-based payment. While
understanding the broader political imperatives for this coincidence,
its administrative consequences do not seem to have been foreseen.
12. Implementation by RPA—From that
policy decision, it appeared until perhaps autumn 2005 that the
RPA were several weeks or more behind events in understanding
what they had taken on. Throughout the summer of 2004, the RPA
helplines presented a major problem with conflicting and often
inaccurate guidance being given to desperate farmers and advisers
by staff with much good will but little knowledge or training.
In one instance, one helpline was giving advice to Yorkshire farmers
by reading from the Welsh guidance based on a different system.
13. The natural pressure on the Rural Land
Register (RLR) with ten times the normal volume of IACS 22 land
registration forms being submitted in the year from September
2004 was again not fully foreseen. Despite repeated expressions
of concern by the CAAV and others, this pressure appears to have
resulted in an emphasis on productivity in handling numbers rather
than competence in accurately improving the record. Where farmers
have submitted corrections, many maps have been returned several
times either uncorrected or with previous errors restored. Some
errors, including some raised freshly this month with farmers
offered six days' notice to respond, simply arise from RPA mistranscription
of Ordnance Survey grid squares or sheets—apparently unchecked
for seven months. Common errors are the persistent addition of
fields not belonging to the farmer and the "stacking"
of different farmers' fields on the same reference. Sometimes
there is no explanation, sometimes the papers are said to have
been lost. It appears that some corrections made can be seen on
screens in some RPA centres but not in others working from the
same record. There seem to be poor linkages between the digital
register and the printed maps so that fields believed to be on
the RLR did not appear on the issued maps. Some members are now
receiving maps which show only fields that have been added but
not the whole map, making it impossible to check if fields have
been correctly deleted. The pressure of the present position has
seen letters sent to farmers requiring answers before the date
of the letter.
14. This situation is a problem not only
for the Mid Term Review but also for farmers' early hopes of entry
into ELS. It has been profoundly difficult for farmers and their
advisers—farmers are having the same work done several times
and may not always understand why their advisers appear to be
ineffective. Members suggest that the RPA should compensate farmers
for the extras fees incurred by farmers for work repeated without
effect where the system has not processed the forms. Handling
the RLR in 2005 is a substantial task but for those trying to
ensure their records are correct for spring 2005 it is often chaotic,
frustrating and burdensome—points which the RPA is reluctant
to recognise.
15. While the CAAV had been assured beforehand
that the administration had been tested for its capacity to handle
120,000 applicants, it would seem that the RPA had never really
expected there to be more than the previous numbers of 85-90,000.
Yet between new businesses, changing businesses, previously unsubsidised
businesses newly allowed into the system, the wider range of uses
allowed and farmers' own reactions to the reform, there was no
reason to make this limited assumption. To the outside observer,
these processes coincided with the pressure from government for
the swift implementation of full-scale new computer systems. In
the background, there appears to be an urgency to bring whole
farm appraisal systems into use much earlier than had been originally
planned. This meant that the RPA was trying to introduce new registration
systems (such as Single Business Identifier (SBI) and Personal
Identifier (PI) numbers) to replace earlier systems at the same
time as it was supervising a major reform. Many claimants received
CReg01 forms to assist this process—a lengthy and, in places,
confusing additional form covering all those dealing with the
RPA, whether farmers or whisky exporters.
16. It was pleasing that the SP5 application
forms went to known farmers during March (in advance of Wales)
but there were then enormous problems as many advisers and farmers
needed spare and continuation forms to make valid applications
by new or larger claimants. The RPA was very keen that all forms
should be pre-printed with appropriate barcodes so that they could
be handled mechanically. It does not appear to have appreciated
the nature of and pressures in the world that they were dealing
with. It would appear that the RPA had planned that spare forms
should only be released in early May which would have left only
a few days for the correct completion of these forms. This completely
ignored the enormous pressure that CAAV members, other advisers
and farmers were under in completing the forms. Indeed, not all
forms for existing farmers went out promptly—one farmer
with 197 fields for the part d of the form did not receive his
form until just before the close of applications despite repeated
requests. Others were in a similar position.
17. The pressure for such blank and continuation
forms was so great that the CAAV was able to agree with the RPA
a process by which the CAAV would collate members' needs into
a consolidated order. Within 48 hours of posting the notice on
our website, the CAAV needed to request 6,000 forms on behalf
of members. Again, it appeared that the RPA was four to five weeks
behind the actual pressure of events.
18. We wonder if there is a more structural
issue arising from the outsourcing of the IT provision in that
the contractors are driven by the obligations, timescales and
incentives of their contracts rather than the larger RPA obligation
to the system. In times of difficulty that difference of perspective
may add to the inflexibility of the IT support.
19. It is not clear to the CAAV how much
the providers of the computer systems actually understood of the
RPA's work but we noticed a tendency for design of forms to be
set early in the system. That meant that when those forms were
available for discussion it often seemed to be too late for practical
recommendations to be taken on board—doing so would carry
a cost. As an example of this, the SP5 form was the vehicle whereby
English applicants asked for allocations from the National Reserve.
It made no request on the form for supporting papers nor did the
section on supporting documents include anywhere for farmers to
show that they had included papers supporting an application to
the national reserve. The CAAV pointed this out on seeing a draft
in late 2004 but it appeared to be too late, even then, for that
change to be made. The result was that, as many farmers did not
submit supporting information, the RPA had to circulate a new
SP5e form in October 2005 to seek out this information.
20. We have already raised practical concerns
that the early draft of the RLE1 form for handling land and entitlement
transfers will cause operational difficulties partly through ignorance
of how transactions are actually undertaken and partially because
it is trying to do too many things at once. We fear a repeat problem
in spring 2006 over access to blank forms given the very tight
time window in which effect can be given to transfers of entitlements
between their definitive establishment and the closing date for
Single Payment applications. The risk is that there may be many
who have leased or bought farms for 2006 who may not be able to
use their entitlements in 2006.
21. Resolving all these issues within England
was never going to be swift, never minding the additional post-devolution
issues of the UK-wide nature of the national reserve and those
farmers with land in more than one country. It is not yet evident
that Wales or Scotland would on their own have established entitlements
in early December though they are clearly delayed by matters in
England. Welsh national reserve allocations have only recently
been started. It may always have been the inevitable consequence
of the English approach to policy that payments would not start
until March 2006—the CAAV was certainly advising members
and farmers in 2004 to budget on receiving payment around Easter
2006, so that any earlier payment would be a bonus.
22. As payment can only be made to claimants
accepted as eligible, interim payments seem to be less of a panacea
than they might first appear. Even Wales, with its historic system,
believes it can only make interim payments to some 75% of farmers.
In England, that fraction might be markedly lower. The risk, now
the RPA appears seriously engaged with the real work, is rather
that diverting effort to interim payments could prolong the agony
in England.
23. In conclusion:
— we fear that to an extent the
RPA offers a readily visible whipping boy for the industry's grievances
when the original source of its problems lies with policy decisions
taken elsewhere;
— that having been set the task
of implementing those policy decisions, those responsible for
allocating resources did not foresee what would be needed and
so management of key issues (such as the RLR, quality of helplines
or the availability of forms) became reactive to overwhelming
pressure rather than pro-active in handling foreseeable circumstances;
— we sense that the complications
were enhanced by the overlap with other computer system reforms
and by the timetabling requirements of those providing the software.
The CAAV is happy to enlarge on any of these
points or respond to other points the committee may wish to pose.
December 2005
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