Introduction
9. The RPA is an Executive Agency of Defra. Its central
function is to make payments to farmers under the Common Agricultural
Policy (CAP) of the European Union (EU), principally the Single
Payment Scheme (SPS). The SPS was introduced following the reform
of the CAP agreed in 2003, and replaced 11 existing CAP subsidy
payments based on livestock numbers and the farmed area under
eligible arable crops. In addition the Agency provides other services
including the remaining subsidy payment schemes, carrying out
rural inspections, and running the British Cattle Movement Service.
10. In England farmers are entitled to payment from
the SPS as long as each 'entitlement' allocated to them is matched
by a hectare of eligible land and other eligibility rules are
met. Payment may be reduced if farmers do not keep their land
in good agricultural and environmental condition or do not comply
with requirements relating to the environment, animal and public
health, and animal welfare.
11. At the end of 2005 the Committee received information
that the process of dealing with SPS claims was not working as
it should. To establish in more detail what was going on the Committee
decided to appoint two Members as 'rapporteurs' to investigate
on its behalf, David Taylor and Roger Williams. They had the terms
of reference to follow up the Committee's earlier report in 2003
on the Rural Payments Agency[2]
by examining:
- Why the RPA is unable to make
payments under the Single Payment Scheme at the start of the payment
window in December 2005;
- the issues involved in making
an interim payment to farmers, in advance of the new February
target;
- what impact the RPA's own Change
Programme has had in the introduction of the new CAP payments
and the agri-environment schemes; and
- the extent to which the RPA's
IT systems have failed to evolve to deliver what is required of
them.
12. The rapporteurs invited written memoranda from
interested parties and visited the RPA head office in Reading
to see claim processing at first hand. As a result they recommended
that the Committee hold an evidence session with Defra and the
RPA.
13. We took evidence on 11 January 2006 from Lord
Bach, then the responsible Defra minister, and Johnston McNeill,
then Chief Executive of the RPA. Shortly afterwards we produced
an interim report which is referred to in paragraph 103-4. When
the serious difficulties with the SPS were announced by the Government
in March we decided to conduct a more detailed inquiry by setting
up a sub-committee for that purpose. The aim of the inquiry was
to:
… provide an opportunity for a forensic
examination of how the current situation came about, looking in
particular at the decisions taken at the start of the process
of implementing the new SPS and the start of the development of
the IT system used to execute it. A key element will be to examine
what wider lessons the implementation of the SPS has for the relationship
between "core Defra" and its agencies, given the fundamental
issues thrown up about communications between the RPA and Defra,
and about how Defra validated the information it was given by
the RPA.
14. We thank all those who have taken the trouble
to give written and oral evidence to our inquiry. We are particularly
grateful to the Central Association of Agricultural Valuers (CAAV),
who gave us a presentation illustrating the difficulties their
clients had had with SPS applications. As we said in our recent
report on our work in 2005-06, in some cases we have needed to
hear evidence from ministers and officials who have moved on from
Defra, in order to establish lines of accountability in relation
to policy decisions.[3]
We are particularly grateful to them for agreeing to be examined
about matters with which they are no longer directly concerned.
15. While we were undertaking our inquiry the National
Audit Office conducted a study into the delays in administering
the SPS in England. It published its report on 18 October 2006.[4]
In a good example of the benefits of joint working between the
NAO and parliamentary committees, the NAO used material that the
Sub-committee discovered in its inquiry, and the NAO report has
in turn been a valuable source of information for us. We record
our thanks to NAO officials for their cooperation.
16. The NAO report was the basis for a meeting of
the Committee of Public Accounts (PAC) on 30 October 2006, at
which the present Permanent Secretary of Defra, Helen Ghosh, gave
evidence alongside officials from Defra and the RPA.
17. This report does not attempt to duplicate the
NAO report; rather we see our role as examining particularly closely
those aspects of policy decision and political accountability
that the NAO was not able to address.
2 Sixth Report from the Environment, Food and Rural
Affairs Committee, Session 2002-03, Rural Payments Agency,
HC 382. Back
3
First Report from the Environment, Food and Rural Affairs Committee,
Session 2006-07, Work of the Committee in 2005-06, HC 213,
para 56. Back
4
NAO, The Delays in Administering the 2005 Single Farm Payment
in England, HC (2005-06) 1631, 18 October 2006. Back
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