Examination of Witnesses (Questions 60-73)
MR RICHARD
MACDONALD, MR
MARTIN HAWORTH,
MR REG
HAYDON AND
MR GEORGE
DUNN
24 APRIL 2006
Q60 Chairman: Did you, as a unit,
seek any internal or external expert advice to review what you
were being told about the IT capability of the RPA?
Mr Macdonald: From an external
IT or other consultant, no.
Q61 David Taylor: Can I conclude
my line of questioning, Chairman. A sister organisation to whom
you have already referred, the CAAV, has noted that, although
the detailed shape of the mid-term review could not be forecast
when the computer contract was let in 2002, the ambitions were
already clear in autumn 2002; you would agree with that observation,
I am sure. They go on to express surprise really, that is my word
not theirs, that the system seems designed in a way that does
not readily accommodate the inevitable changes and subtleties
of policy. Is that a fair assessment?
Mr Dunn: It is interesting you
should raise that question because I am a member of the RPA's
Industry Forum, which is a sexy term for a stakeholder group.
I recall, prior to the implementation of the CAP reform that was
agreed in June 2003, raising at those Industry Forum meetings
that, of course, you need to be aware of the changes that are
coming with CAP reform, that they will have a different mechanism
of paying the money out and that you need to be closer to Defra
on those aspects. We were given assurances at that time that RPA
and Defra were talking to one another and that the computer systems
would be made so that they could cope with that sort of change,
but essentially they were first brought in to deal with the legacy
systems that the RPA had from the Change Programme announced in
2001.
Q62 David Taylor: On 21 January 2003
the draft legislative proposals for the 2003 CAP reform were published;
10 days later, Accenture was formally appointed. This is three
years or more ago. Do you find it surprising, and the CAAV certainly
do, that the RPA pressed ahead with an IT contract with Accenture
based on a policy environment which was already destined for the
dustbin of history? Are you surprised by that, as they are?
Mr Dunn: The RPA, let us be clear,
were being driven by a Defra-inspired Change Programme to implement
new systems, implement new ways of working to close offices, to
move away from `customer to official' contact. They had to have
new systems anyway if that is the way they were being driven by
the Office of Government Commerce and Defra to upgrade the way
in which their systems were operating. You had your own inquiry
into that at the time. We said we were going too fast too soon.
Q63 David Taylor: The normal impact
of an internal review: the legislative proposals were there, they
were published, they had been on the table previously and here
we are contracting on the basis that is historic in every sense.
Mr Dunn: Whether that is the fault
of the RPA or Defra, I cannot tell you.
Q64 David Taylor: I am putting the
criticism to you to see if you agree with it.
Mr Dunn: It would appear strange
that a system was put in place that could not cope with a major
reform to the CAP which was imminently to occur.
Mr Macdonald: Perhaps it is worth
making one small point, I think that to go back to the dates you
mentioned, Mr Taylor, in mid-2002 we were talking about a mid-term
review then, so I think the scale of the change that was coming
about did not become apparent for some months after that.
Q65 David Taylor: We are now in late
January 2003.
Mr Macdonald: By then it was certainly
clear that things were going to get fairly serious.
Mr Haworth: To repeat our earlier
point, the Commission's initial idea of this reform was it was
entirely historic and the regional basis was very much an after-thought
put in at the request of the German Government at the time. The
idea that we would get anything as complicated as a dynamic hybrid
at that time would have been purely fanciful.
Q66 Mr Williams: Of course it was
not just the Single Farm Payment which was being introduced then
as the responsibility of the Rural Payments Agency, it was also
the new Environmental Stewardship Scheme with the requirement
to map field features such as hedges and ditches but also the
whole farm appraisal as well. Was that too much—it appears
to be too much—for the Rural Payments Agency?
Mr Macdonald: I think in hindsight,
Mr Williams, quite clearly so. I think with hindsight, if we were
asked the question now, "Would you have wanted these to happen?"
the answer would be "No." Two points to make. Clearly
the Entry Level Scheme has a number of potential benefits to it,
it brings money to farmers, it enables us to deal with some of
the environmental regulatory issues like the Framework Directive
and to bring about some changes, so there are numbers of big pluses
in it. At the time we sought the assurance, "Is this deliverable?"
I am sorry this is a repeated theme but, believe me, it was a
repeated theme from us time and time again in terms of this, and
the assurance we were given at the beginning was that this was
deliverable. In hindsight, as you say, if I knew what I know now,
I would have done something different.
Mr Dunn: I would concur with that.
We had the introduction of the new Environmental Stewardship Schemes,
we had the major Change Programme going on in the RPA already,
we had a complex system of implementing what should have been
a very simple CAP reform. We added to that the 40,000 new customers
who came along by opening up a system to a bunch of new people.
That was bound to create problems. When we were consulted on when
should the CAP reform be implemented, we said, "As soon as
possible, so long as you go for the historic system." If
they had suggested to us at the time they were going for something
more complex, we would have asked them to put it off.
Chairman: I want to move on to a line
of questioning about mapping and the Rural Land Register.
Q67 Mr Drew: This seems to be the
crux of where the logistical problems have come. At what stage
did you, given you were not in favour of this system anyway, become
aware there was going to be a significant problem over who would
map, how it would be mapped and that there would be a lot of argument
over the accuracy of this mapping?
Mr Dunn: I would go back to the
answer I gave earlier, as soon as the Government announced it
was going for a regional average system ultimately, following
a period of a dynamic hybrid, we knew then the mapping issues
were going to be huge, that people were going to have to register
new parcels of land, people who had not been used to schemes of
assistance before and may not be able to provide the RPA with
the sort of information which the 80,000 returning customers could
have provided. It became clear as the 2005 claim forms were being
completed that the system the RPA had chosen to use was causing
some major problems—fields were apparently disappearing
when they were there before and areas were changing—and
people with well-planned out systems were being thrown out by
the digitisation process. So our fears about the system became
reality when farmers were talking to the RPA Helpline following
the issuing of the 2005 claims forms.
Mr Haworth: I think there are
two problems. One is the one George has referred to, which is
the additional volume because of course all these new people who
registered had never been mapped before and this added to the
complexity. Secondly, the Entry Level Scheme required a whole
set of new parcels of land to be digitally mapped, and things
like woodlands to be mapped which had never been mapped before.
So that was one element of the problem. The other element of the
problem is that the digital mapping system, for whatever reason,
never seemed to cope very successfully with new entrants on to
the system. It seems to have been too sensitive in some respects.
That caused what should have been a fairly simple process of digitally
mapping an area of land, checking it and entering it on to the
registry, to be enormously complicated because of what has been
alluded to, that when changes were made they were not immediately
apparent to the applicant or they altered other aspects of the
same area. That caused what should have been a simple, one-step
process to become three, four, five, or in many cases a process
which is still not yet complete even now. We are still in this
circle of people saying their corrections have not been effectively
registered on the registry.
Mr Macdonald: We should be able
to give you more details, but my notes tell me that we started
noting this in early 2005. Although it has manifested itself in
a huge way, and no doubt you have all heard of endless people
whose mapping sagas have gone back and forwards, this has been
going on for quite a long time now.
Mr Haydon: As far as I know there
are very, very few farmers who have had a clean-cut application
with no problems with the maps. We personally in our application
had great problems. Somehow digitising the mapping process creates
a problem whereby fields get lifted out into another parish, so
you suddenly find you have four fields which do not belong to
you, and after deep investigation you find they are about five
miles away. This has been going on all time with people receiving
extra land out of the county. That is why, as at last Wednesday,
there were 62,000 applications which have not been validated.
Unfortunately, when you get one of these it does not tell you
the reason why you are invalidated, it gives about six options.
So far we have not found out why we are not validated.
Q68 Chairman: Can I ask factually
if either organisation was told the RPA had in some way trialled
the digital mapping system?
Mr Dunn: We have not been told
they trialled it, no.
Mr Macdonald: I do not think so.
Mr Dunn: The line the RPA had
given us all along was that the Rural Land Register was working,
that 98% of land parcels were on the system and correct, but the
understanding from what we were hearing from our members, and
I am sure the NFU and the CAAV were the same, was that that was
far from the case on the ground. We were not aware it was ever
trialled.
Q69 Mr Drew: Can I look at this issue
to do with the Single Farm Payment and the Environmental Stewardship
Scheme. Clearly, Defra—I presume it is Defra and not the
RPA—changed the priority between the two late in the game.
What was your view on how you could balance those two sets of
mapping priority? Did you have any view on this or were you consulted
on this? Were they separate initiatives and you saw them as a
separate line of activity?
Mr Dunn: It was one of those situations
which came long which you had to deal with at the time, and we
were getting calls from members saying, "We cannot get our
maps sorted out for ELS purposes, we need to get them sorted out."
People had been applying to the RPA for map changes on the old
IACS 22 forms and of course the RPA was building up a healthy
backlog of cases they had to deal with alongside all the issues
they were dealing with on the Single Farm Payment. So from an
operational perspective, whilst we were not necessarily happy
with the decision they made, I can understand why they had to
make the decision, "Anybody who has applied for mapping changes
up to this point will be kept in a priority queue and we will
sort them out for you. Anybody else who is making changes for
ELS reasons only will have to wait until we sort out the SPS débacle."
We were not exactly thrilled with that but I can understand why
they had to make that decision.
Mr Haworth: I think this is another
example of a much repeated story. We were assured in the first
place that they could do both and they would do both and there
would not be a problem. We carried on being assured of that after
it must have been clear to them they could not. At that point
we were faced with a really difficult choice, "What do you
want to do?" I cannot remember if we were formally consulted
but we certainly had to acquiesce in them putting the priority
on to the Single Farm Payment, which we did. As George said, we
did not do that with any great gladness, I really think we had
no alternative. The underlying story here is of repeated assurances
being given way beyond the time when, in our view, they should
have been given.
Mr Haydon: I think the practical
situation is that most farmers with the problems they have with
the Single Farm Payment have been very reluctant to get into the
ELS scheme until they saw the main thing, the money, sorted out.
That is borne out by the take-up which at the moment is only 22%
of people who have actually applied for the ELS.
Q70 James Duddridge: I would like
to look at some of the lessons learned about the relationship
between Defra and the agencies. How much of the problems over
payment can be put down to poor information flow between RPA and
ministers? Mr Haydon, you mentioned Lord Bach had been given something
of a hospital pass in terms of the mistakes having been made,
but would you agree with me, whilst I am sympathetic he was passed
a difficult problem, he has not acted in a competent way demanding
the right information and grasping this problem and dealing with
it when he entered the Ministry?
Mr Haydon: It is very easy to
criticise people when they have picked up something they did not
exactly start off. The worst thing is the broken promises. One
of the classics for us at the TFA is that we invited Johnston
McNeill, who was the head of the RPA at the time, to come and
speak at our AGM and he stood up then in front of the audience
and assured everybody that everything in the garden was lovely,
and that was on 21 February and he got the sack on 13 March, which
was not too long afterwards. He was in charge, so was he telling
us a pack of lies or did he not know the true situation? Since
he has gone, there have been lots of management changes which
Mark Addison has brought in and obviously there is close liaison
between the RPA and the Minister now week by week. There was not
much progress last week except for the good news about the implementation
of the partial payments. Easter always affects things. There is
a meeting tomorrow so we shall see how things have changed and
whether there is an improvement. It has not been easy for the
people in charge, I can appreciate that.
Q71 James Duddridge: Would it be
fair to say Lord Whitty has created this mess, Lord Bach did not
identify it and now Margaret Beckett is promising to sort it out
and it is all happening too late?
Mr Haydon: I think it would, yes.
Maybe a combination of the Secretary of State and Lord Whitty
have something to answer for.
Mr Dunn: I certainly had a very
short but terse exchange of views with Lord Whitty after the end
of the second anniversary of the Curry Report when he was speaking
at that event. We had just had the call from him that morning
that he had spoken to Reg and I said, "This is going to be
a disaster" and that is why we had the meeting about eight
days later with him. Lord Bach I think has had a difficult issue
to face but, let us be clear, whilst the RPA appear to have had
all the forms scanned on to the system, they have keyed all the
data and they have got it all on to the computer system ready
to push the button for validation, this was the first time this
system was ever used in anger, and for the RPA then to press the
button to start making definitive establishments of the type as
of 14 February and then do the validation, no one knew if the
system was going to work. I was clearly aware that senior figures
in the RPA were saying, "We hope to do this, we want to do
this, this is what we are aspiring to, but we cannot be sure because
the system has never been run before." So in a sense there
was a groping in the dark by ministers, a groping in the dark
by RPA senior managers. This was the first time the system was
operated in anger, "What is going to happen when we push
the button? Oh no, it has gone pear-shaped. Now what do we do?"
Whether or not you can say that was the fault of an individual
or a group of people, I am not sure, but there was clearly a huge
systems failure that was only apparent when they pushed the button
to start validating claims.
Mr Macdonald: Let me try and answer
the question in the forensic spirit of it. You have seen the public
statement the NFU has made about ministers and, therefore, you
can take it—I am conscious of your comment about lack of
passion and being too polite—that there is certainly none
of that. In terms of the RPA, I think you can say, there was a
very poor information flow from RPA to Defra/ministers, that is
clear. I find it pretty difficult to conceive that the RPA and
senior managers at RPA did not know—or if they did one has
to question their ability and competence—that there were
very significant difficulties taking place. I have to say that
we, NFU, TFA and others drew attention to the RPA and a whole
host of difficulties that were taking place going back months.
The repeated answer that we were given was it would happen; you
have seen the delays that took place, the changes and the lack
of contingency time that was available but (a) that it would happen,
and (b) and I am repeating the point I made earlier that this
was a task-based system, ultimately, there would be a great crescendo
and hey, presto, it would all happen. We had, to put it mildly,
very serious doubts as to whether that was going to take place.
I am almost asking the questions that I guess, Chairman, you will
have to ask in due course. The second question is, to what extent
should Defra have known? I think it is fair to say we were drawing
these issues to their attention. Secondly, if they did know, what
more could they do than ask RPA repeatedly and get the same sort
of answers we did? I think there are question marks there. I think
there is an issue that I alluded to right at the beginning which—forgive
me, I am not here to pose your questions for you—is what
is the structure of the interface between Defra and the RPA, because
I think that you may find that the majority of the effort, for
a lot of reasons, is based on trying to ensure their process and
system is working as opposed to asking, "Are we achieving
the policy goals that we set out?" Therefore, a significant
number of the people in Defra who are involved in the interface
with RPA are systems, process and management people as opposed
to policy people and what we have here is a huge policy, a very
complex policy issue that has to be implemented. If you are a
manager or a systems person and not a policy person, you do not
necessarily see the difficulties in the same way. Therefore, I
think that there are, at the very least, some significant questions
as to whether the structure of the interface had the right people.
That is not a resource one, that is an issue of the right expertise
constantly looking into this. I think if you were often to talk
to Defra policy people, they would say this is a systems issue
going back. Again, in hindsight I think that that is wrong and
certainly an awful lot of the issues we have been raising questions
on for the last six or seven months, whatever it is, more probably,
are policy-based.
Mr Dunn: There was also another
review which was carried out, which I have never seen the report
on, which I think was the Office of the Government Gateway Review
of the RPA's performance in its Change Programme and delivery
of the SPS. I certainly gave some evidence to that on 8 February
this year. I understand that a report was drawn up; I do not know
where that report is, who has got it or what it says, but that
was looking at some of the processes and some of the systems issues
and IT concerns that you were talking about, so if it was possible
to find out where that has got to, it might be useful for the
Committee.
Q72 Chairman: Can I ask you, sometimes
organisations like the TFA and the NFU form, on a person to person
basis, some private relationships of a very proper nature, but
nonetheless private relationships, that help to communicate what
is going on under difficult circumstances, such as the ones we
have been discussing for the last hour and a half. When you started
to see the wheel falling off this process, did you, Richard, Martin,
George or Reg, pick up the telephone to speak to anybody quietly
and privately in the RPA and say candidly, "What the hell
is going on? Is it going to work or is the wheel going to come
off?" Did you have any insight like that?
Mr Haydon: We thought that if
we asked the head of the RPA down to speak at our AGM, because
things began to look not too good around February time, by having
the person in charge he would be able to give us the truth and
the up to date situation. He stood up and said, "Gentlemen,
everything is fine. We are about to start tomorrow, the computers
will roll, the button will be pressed and money will be coming
out", so we thought, "Hoorah, fantastic"; it all
turned out to be an absolute load of nonsense. What more could
you do?
Mr Dunn: It is true that private
conversations took place with senior individuals in the RPA and,
from my perspective, they never differed from what they were telling
us publicly at stakeholder meetings and within the RPA Industry
Forum. It was always couched in terms of we were aiming, ie the
RPA was aiming, to get the payments out as soon as possible in
the payments window which was opened on 1 December, as you know,
but that was always couched in terms of "This is an untested
policy. There are lots of changes yet to come from the Commission
that we need to implement. We are not sure whether the technology
is going to work for us", et cetera, so they were always
saying, "We hope to achieve this, but we do not think that
we can say for absolute certainty that it will happen". Even
when we had the start date in February and the bulk by the end
of March, senior figures in the RPA were saying to us in meetings
and privately in conversations that we were having, "We cannot
say for sure this will happen. This is what we are aspiring to,
this is what we can see so far we are getting to, but there are
some huge risks here that we may not get the system implemented
in time". When we had similar conversations with Defra, the
line we got from Defra was, "The RPA are telling us they
can do it".
Mr Macdonald: The answer, Chairman,
is yes, both publicly and, as you say, in less formal meetings
and discussions. I can look back and know that we, in terms of
NFU people at various levels, and I have quite clearly fielded
the difficulties but given a very similar line throughout. I think
one of the issues is it does come to the point of process that
you are looking at, which is, ultimately, which one person held
the ring and pulled all these things together? Quite often, what
one did is talk to somebody, who said, "I need to tell somebody
else" or "I am assured by somebody else". I suppose
the charitable way of looking at it is this is a very process-driven
system, you have a whole variety of different players on this
and we are waiting for it to come together.
Q73 Chairman: Gentlemen, thank you
very much indeed. You have marked our card, particularly in those
closing words about where else we must seek the truth about what
is happening. I suppose like the best of the soap operas we close
with the words, "Well, why did Mr Johnston McNeill say it
was going to be all right on the night, when in actual fact from
within his organisation there was a trembling and a worry that
it would not be?" No doubt in further episodes of this thrilling
investigation, we will get to the bottom of that and perhaps our
next set of witnesses will be able to assist us in that. Thank
you very much indeed. There are a number of questions that we
did not reach, which we will put in writing to you, and there
may be further things that arise during the course of our inquiry
that we would like to come back to. Thank you very much for your
candour and information, much appreciated.
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