Conclusions and recommendations
1. Defra
should establish why its decision making processes did not require
an adequate examination in 2003 of the implications and changed
risk profile associated with introducing the Single Payment Scheme
in parallel with the RPA's Change Programme and its associated
new business processes. (Paragraph 31)
2. The
policy reasons for the Government choosing the dynamic hybrid
are appreciated, but such decisions should not be made in isolation
from practical realities. The choice of the dynamic hybrid model
made the RPA's task a more complex one than implementation on
a historic basis, especially with the Change Programme being implemented
in parallel with the SPS. The policy suffered from the closed
nature of discussions during its development and a lack of real
scrutiny of the implications of what was proposed, such as the
fact that payments would henceforth be made outside the farming
mainstream. (Paragraph 47)
3. We
conclude that Defra ministers selected the 'dynamic hybrid' model
in the knowledge that it was inherently more complex and risky.
But they did not seem to be aware of what they were letting themselves
in for. Defra officials did not quantify these risks for them,
and relied too easily on RPA assurances that the choice was deliverable
in the time available. These assurances were not based on detailed
analysis, and were partly motivated by a desire to escape from
difficulties with the development of IT systems to pay the previous
schemes. No proper appraisal was made of the volume of work that
the chosen policy would entail, both in terms of the number of
claims and, even more significantly, the number of land changes
that the RPA would have to deal with: land not formerly incorporated
would now be within the system and there was a strong incentive
for landowners and farmers to register as much land as possible.
Defra should now identify those who were responsible for this
fundamental failure to recognise the consequences of its own actions
on the RPA payment delivery mechanism. Senior officials who presided
over the lack of policy analysis should indicate why those actions
were not undertaken. (Paragraph 48)
4. The
amendment of the original dynamic hybrid decision so soon after
it was announced, by adding a third region, reinforces our conclusion
that the wider implications of the dynamic hybrid model had not
been properly thought through when the decision was made. It also
made the RPA's task yet more complex and lost them more time.
Defra should provide a commentary to explain this failing in its
internal decision making process. (Paragraph 49)
5. RPA
efforts to reduce risk of EU disallowance in fact increased the
risk of failure in policy delivery. The RPA and Defra ended up
with worst of all worlds: both a failure to deliver and the likelihood
of substantial EU disallowance. Defra should identify which ministers
and officials contrived to agree a scenario that was a precursor
to failure. (Paragraph 52)
6. We
conclude that the numerous changes to the SPS rules and late policy
decisions contributed to the delay in implementation by reducing
the time available to build and test systems. Defra was not to
blame for all of these delays: the EU was slow to finalise the
common rules of the SPS. However this should have been a foreseeable
risk, as Defra should have realised that other Member States were
not in such a hurry to have the details worked out, either because
they were implementing in 2006 or because they were using a historic
system. In addition, some of the RITA components were not able
to cope with the required volumes when delivered, which reduced
the amount of time the RPA had to process the 2005 SPS claims.
RITA itself did not work reliably enough. Defra failed to anticipate
the volume effects on their systems arising from the implications
of the SPS policy for the numbers of additional landowners who
could now benefit from the new arrangements. Ultimately ministers
and Defra senior management must accept full responsibility for
their failings. (Paragraph 60)
7. Accenture
witnesses appeared to have been well schooled in not venturing
comment on matters which they deemed were beyond their contractual
observations. This attitude denied the Committee an important
perspective on the way the SPS project was being run from the
standpoint of a company at the heart of the venture. We regard
this as an unacceptable attitude from a company of international
repute and which may still aspire to work with UK government in
other areas. (Paragraph 61)
8. What
this supervisory structure confirms is that Defra did not simply
let its executive agency get on on its own and try to deliver
the SPS on time. The Department effectively established joint
ownership of the project, 'warts and all'. In so doing it reaffirmed
its share of the responsibility for the project. (Paragraph 68)
9. The
Committee very much regrets the former Secretary of State's attempts
verbally to distance herself from the consequences of policies
which she herself must have approved. Expressing annoyance or
dismay was no substitute for her need at the time fully to engage
in her Department's efforts to deliver the SPS on time. (Paragraph
72)
10. The
RPA did not adequately take into account the effects of losing
a large number of experienced people. Lord Whitty should have
acted at the time to prevent the departure of so many such staff.
(Paragraph 76)
11. The
Office of Government Commerce should review its procedures and
warning assessment systems which allowed a project to reach a
rating of probability of success of only 40% seemingly without
effective preventative action being taken. (Paragraph 96)
12. Given
the high importance of successful implementation of the SPS scheme,
to the reputation of the Department and the RPA let alone to the
claimants, we find it extraordinary that Defra seemed prepared
merely to aim to keep the probability of success above 50% just
eight months before payments were due to begin. (Paragraph 97)
13. Defra
should explain why its concerns that disallowance prevention was
interfering too much with the preparations for payments were not
heeded by the Agency. (Paragraph 115)
14. The
Department should indicate in detail what steps it has taken,
and plans to take, to ensure that lines of communication between
Defra and its Agencies are clear so that parties can be certain
in the future that each has understood what the other is saying.
Defra must also incorporate in its next Annual Report a section
giving a clear and unambiguous account of how it is correcting
its weaknesses and responding to the lessons learnt. (Paragraph
131)
15. We
welcome the RPA's live test of 2006 scheme year payments in January
2007. Defra should have demanded that such a test take place in
the 2005 scheme year before it went ahead with the attempt to
pay all claims. (Paragraph 142)
16. We
seriously question the decision to spend more than half a million
pounds in fees to private consultants as part of the Hunter Review
of the single payment scheme. The Department must publish an explanation
about why use of such a sum was thought necessary and where the
resources to fund the review have been found at a time when Defra
has been cutting the budget of a number of its agencies. (Paragraph
143)
17. The
Committee requests that the Secretary of State continues to keep
the House fully informed of progress with payments and important
operational developments. (Paragraph 146)
18. Although
the move away from the task-based system is welcome, we remain
concerned that the RPA is still using an IT system that was designed
for a task-based system and has been difficult and unreliable
in service. We require the Department and the RPA now to cost
and publish details of the further IT changes which will now have
to be made to overcome current problems and speed up the SPS payments
process. (Paragraph 146)
19. Johnston
McNeill was Chief Executive and Accounting Officer of the independently
accountable delivery body that failed so clearly to deliver, and
which failed to foresee in time the fact that it would not deliver.
As such he is accountable for, and must bear responsibility for,
the failings of the RPA. If he felt that he was being asked to
carry out a task that he would not be able to defend on value
for money grounds to the PAC, he should have sought a formal written
instruction in accordance with the Treasury's rules on Government
Accounting. (Paragraph 149)
20. But
Mr McNeill was not personally and solely responsible for the failure
to pay farmers. The Agency failed largely because Defra asked
it to do too much in too short a time and did not pay enough heed
to the Agency's warnings about the risks of what was being proposed.
The governance arrangements stipulated that Johnston McNeill should
share senior responsible ownership with Andy Lebrecht, and all
the crucial decisions and recommendations to ministers on implementation
were made jointly with Defra by committee through CAPRI or the
ERG. We conclude that it is unfair for McNeill to be the only
person to be held accountable when he was not given the sole responsibility
for delivery. (Paragraph 150)
21. If
a failure to deliver on such a scale had occurred in a major plc,
the chairman and the senior operating executives would have faced
dismissal from post. With this in mind the Committee continues
to be astonished that Sir Brian Bender continues to hold the rank
of Permanent Secretary. If he does not tender his resignation
the Head of the Home Civil Service should explain why a failure
such as this results in no penalty. (Paragraph 153)
22. His
long standing knowledge of the importance of timely payments to
farmers and his full involvement in the SPS project from its inception
mean that he should now consider his position. If he chooses to
stay, the Department in its response to this report should explain
to us in straightforward language why being so closely associated
with the waste of large sums of Government and farmers' money
and the widespread disruption of England's rural economy should
result in no personal penalty being paid. (Paragraph 154)
23. It
will seem strange to many in the rural economy that right at the
top of Defra no price for failure has been paid by the now Foreign
Secretary. Leaving others to get on with the day to day delivery
of services should not remove the obligation from the holders
of high office to do more than just apologise and mouth the words
"I am taking responsibility". It should be the case
that when a Department fails to deliver a key programme right
at the heart of its fundamental responsibilities the holder of
the office of Secretary of State should not be rewarded with promotion
but its reverse. New ministerial guidelines should now be drawn
up to make it even clearer that if individuals are prepared to
accept the glories that come with high office they also know precisely
what to do if fundamental Departmental failure occurs. (Paragraph
159)
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