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
May 15th 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:
a) 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
b) 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 4 to 5 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 per cent
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:
a) 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
b) 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.
c) 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.
Central Association of Agricultural Valuers
December 2005
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