Examination of Witnesses (Questions 260-279)
DEPARTMENT FOR
ENVIRONMENT, FOOD
& RURAL AFFAIRS
AND RURAL
PAYMENTS AGENCY
MONDAY 9 JULY
2007
Q260 Mr Mitchell: "We continue
to work towards full payments starting by the end of February."
What caused the reduction from "we will achieve" to
"we work towards" between September and November?
Johnston McNeill: Lord Bach was
receiving regular briefings face to face from the director of
operations, myself or the programme director. He was being briefed
on progress certainly on a weekly basis and, as I mentioned earlier,
towards the latter end he received almost daily Reports. They
influenced his stance when he made comments or observations about
progress.
Q261 Mr Mitchell: "We continue
to work towards" continued through November, December and
January, although by January had been added the words: "it
is clear that not all claims will be fully validated by that point."
The words disappeared in February. Was it in February that it
was made clear to you that there was a serious problem and that
you were regarded as the cause of it?
Johnston McNeill: No, in February
we had actually succeeded in defining entitlements and had started
making payments, proving that the system worked and that all the
work that had gone before would suffice. Our confidence at that
stage was actually quite high. We thought, "This is very
good." It was then that we realised that it was not the system's
problem but that we could not get the tasks through the system
to enable sufficient payments. They were going through, but not
fast enough.
Mr Mitchell: Yes.
Johnston McNeill: The system worked,
but it was clogging up, as others have said.
Q262 Mr Mitchell: But between 28
February and 10 March it became clear that the whole thing had
clogged up.
Johnston McNeill: Yes, it had
clogged up. That is exactly right.
Q263 Mr Mitchell: Why were you not
yelling out that that was happening before?
Johnston McNeill: We yelled out
on 10 March.
Q264 Mr Mitchell: You were effectively
called in and told by Ministers that it was clogging up on 10
March, but—
Johnston McNeill: No, we told
Ministers that it had clogged up on 10 March. That was in a note
from me to Lord Bach explaining what was happening.
Q265 Mr Mitchell: It was 10 March
when you were told that the dissatisfaction centred on you and
that you would have to go.
Johnston McNeill: No. That was
when I informed Lord Bach that we were having serious trouble
in getting level 2 validation through the system.
Q266 Mr Mitchell: So what happened
then?
Johnston McNeill: Then we continued,
with consultants and others, to try to identify whether there
were any means by which we could get it freed up. There was another
issue regarding blocked authorisations at the end, but to be frank
that was pretty much dealt with by DEFRA legal. The big issue
was how quickly we could get level 2 validations through the system.
Q267 Mr Mitchell: It looks from the
Reports as though by March you were trying to shift the blame
on to other people, such as the farmers, saying that there were
inconsistencies in the claim data, that they were not sending
back their mapping and that there were duplicate claims. By that
stage you were trying to shift the blame on to the customer—
Johnston McNeill: I am sorry,
I have no recollection of trying to blame anyone. I went straight
to the Minister and explained as soon as I got word that the system
was not going to deliver full payments by the end of March. That
was completely honourable and correct. The first time I was aware
that we were not going to achieve the target, I was talking to
him in a matter of days having checked that that was definitely
the case. Then we went to the discussion with the Secretary of
State on 14 March and explained exactly the same to her, and she
thanked me for my honesty. I was totally frank with her. I was
in a position to point to the facts of the position as opposed
to saying, two years earlier, "This cannot be done."
We had pretty much got there, and at the eleventh hour it failed.
Q268 Mr Mitchell: So how did you
feel when the responsibility was pinned on you after all the warnings
you had emitted and after almost achieving it?
Johnston McNeill: At the end of
the day, I was the Chief Executive of the organisation and I accept
that I have to carry some responsibility, but there were many
others involved and there was certainly a full and frank flow
of information between the Agency and the Department. Others in
the Department were very close to the matter, as the Environment,
Food and Rural Affairs Select Committee Report notes.
Q269 Mr Mitchell: You say that others
were involved—you said that there were six people Reporting
to you.
Johnston McNeill: Yes.
Q270 Mr Mitchell: Are the others
who were involved above or below you?
Johnston McNeill: I was thinking
more of the others above me.
Q271 Mr Mitchell: So where would
you pin blame, then?
Johnston McNeill: I am not in
a position to pin blame on anyone. I do not think that that is
appropriate. Others have looked at this and taken a view. That
is for them to decide.
Q272 Mr Mitchell: Do you feel that
you were left to carry the can, while people higher up escaped
the blame?
Johnston McNeill: I have to carry
a level of responsibility for this. I was the Chief Executive
of the organisation. It goes with the job.
Q273 Mr Mitchell: Do you feel that
other people should have carried responsibility as well?
Johnston McNeill: I really would
rather not comment.
Mr Mitchell: Thank you.
Q274 Mr Davidson: Following up the
point about mapping, do I take it that, as a result of the mapping
exercise that has been undertaken, we will not in future have
claims made for EU grants for sites in the middle of the North
Sea, as you will be aware we had in the past? Are all these things
behind us now?
Johnston McNeill: I had the dubious
pleasure of explaining the North Sea claims to this Committee
and I was quite certain I was never coming back. I sit here, hand
on heart, and say that I do not believe that there are any claims
in the North Sea on that system.
Q275 Mr Davidson: Okay. That raises
an interesting point about three-dimensional mapping. Presumably,
given that water moves, I am sure that the farmers would find
a way of getting even more money out of the system.
The group devising the policy did not seem to
be in adequate communication with the group that was going to
be charged with delivering the policy as the process was evolving.
Is that fair?
Johnston McNeill: I think that
by fielding Hugh McKinnon and Bill Duncan, who were our two top
people—they really had more experience than anyone else
in the Rural Payments Agency in this area—we fielded the
best team we could. I think the trouble is that, while one reaches
agreement at EU level about what is going to happen and whatnot,
the devil is in the detail. Hence you end up with the 21 major
policy changes and 61 change requests to Accenture. As things
become clearer, as the Commission makes things clear and as the
thing evolves—I think that that was where we ran into the
serious problems.
Q276 Mr Davidson: Right. Can I just
clarify the 21 and 61 changes? Do those apply to Scotland, Wales
and Northern Ireland as well?
Johnston McNeill: No, just to
England.
Q277 Mr Davidson: So these were not
changes coming from the EU, were they?
Johnston McNeill: They related
to the EU's discussions regarding the Single Payment Scheme—the
dynamic hybrid—which England had decided to adopt.
Q278 Mr Davidson: Fine. So when you
were commenting on whether this scheme was able to be delivered,
you were not aware at that stage that that number of policy changes
and directional changes would be required. Is that fair?
Johnston McNeill: It is fair.
Having started to ascertain as quickly as possible what the scheme
would look like, we sat down with our policy colleagues at a two-day
session. We went through the scheme in some detail and developed
a number of assumptions as to what it would finally look like,
because after all we had an IT contractor waiting to get on and
we were going to be paying it whether or not it was working. We
took the view that, to save time, we would sit down with the policy
side, with the best expertise we could find, and spec out what
we wanted.
Q279 Mr Davidson: So because of the
general thrust adopted in respect of the scheme, you were having
to second-guess how the EU would interpret various elements of
the agreement, and you obviously must have made some mistakes
in those assumptions that had to be revised. Is that so?
Johnston McNeill: I do not think
that there were mistakes. The Department engaged in a number of
consultations after the change from SDA to non-SDA to SDA and
non-SDA rural, etc., which resulted from discussions between Ministers,
the Secretary of State, the NFU and others. So things changed
as a result of internal consultation between the policy makers
and stakeholder groups. Also, the Commission—this was all
new to it—was taking a view as to what it would accept and
what it would not accept.
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