Examination of Witnesses (Questions 140-152)
DEFRA AND RURAL
PAYMENTS AGENCY
23 JANUARY 2008
Q140 Mr Mitchell: Okay. What is the
basis of the rationale for withholding payments? Is it they are
not paying their money over to the farmers or is it the usual
principle of screw the British at every opportunity?
Mrs Ghosh: What the Commission
and the Court of Auditors need to do is to make sure, in the same
way that the NAO does for the British taxpayer, that they are
protecting the funds that the European taxpayers have paid.
Q141 Mr Mitchell: They are not protecting
the taxpayer by this enforcement.
Mrs Ghosh: Indeed they are because
we are getting a repayment from Europe for the payment we make
to farmers. If they feel, for example, that we have not done rigorous
enough checks, for instance some of the disallowance relates to
making interim payments in that first year, then they are—
Q142 Mr Mitchell: Sorry, Europe is
making a lot more than that because you are getting less payment
than you are due to pay.
Mrs Ghosh: I am sorry, I do not
follow the question.
Q143 Mr Mitchell: It is a deduction
which is paid by the taxpayer.
Mrs Ghosh: Yes, it is paid by
the British taxpayer.
Q144 Mr Mitchell: Yes.
Mrs Ghosh: They are defending
the European taxpayer in the CAP payments made by them to us,
the British.
Q145 Mr Mitchell: Big deal! Can I
talk about the overpayments. It seems curious to me that you are
so kind and gentle towards farmers who have been overpaid to the
tune of over £100,000 in six cases, £100,000 to £290,000,
and in 17 cases of £50,000 to £100,000. Why have these
people been allowed to keep the money when the Treasury is so
prompt to screw people who are overpaid on tax credits, vulnerable
people, poor people, who are overpaid and are on tax credits?
Mrs Ghosh: The answer is that
they will not be allowed to keep the money.
Q146 Mr Mitchell: But they have been.
They have had the money and the interest on it for two years.
Mr Cooper: One of the reasons
that we were not able to recover was because we wanted to be certain
that we were not going to recover money and at the same time give
them some more money and then take it back. We had to get to a
point where we understood what the overpayment was and what the
overall position for that particular farmer was, and that is the
position we have reached now.
Q147 Mr Mitchell: Mrs Ghosh made
the point it might be difficult for somebody who is not getting
much extra money to know that the money has been put into their
account, but if somebody is getting £100,000 duplicated in
their accounts they know that something has gone wrong. They did
not tell you, did they? They did not rush forward and confess
and say, "Here is the money back", did they?
Mrs Ghosh: No, they did not rush
to the door.
Q148 Mr Mitchell: Okay. A lot of
the cause of this problem, it seems to me, is the fact that the
poor old Agency was going through the Gershon efficiency savings
and shedding staff at a time when it was taking on an increased
load to make these payments and it ended up hiring people back,
bringing in casual workers, paying a lot of overtime, and in the
end had a bigger staff. Have the Gershon efficiency savings been
applied to the Department since this fiasco?
Mrs Ghosh: No. The Gershon efficiency
headcount savings, which we had previously agreed with the Agency,
we renegotiated. The Gershon efficiency target for Defra, that
means the core and its agencies, by April next year is to have
reduced by 1,400 staff rather than 2,400. In fact, as it turns
out, as Tony has said, by the end of this year they will have
made some reduction so they will have contributed, but we have
not forced them to do so.
Q149 Mr Mitchell: To me it demonstrates
the daftness of the whole Gershon principle that you end up paying
more and more overtime. In terms of overpayments, you have been
pioneering the Northern Rock debacle with the fund. Could I come
back to this point about Accenture. From what you were saying
to Mr Bacon, Accenture were responsible for the fact that the
systems were inadequate in the first place so you are now paying
them more to update those systems. Are you fining them in any
way? Have they been penalised in any way?
Mrs Ghosh: Just to correct your
interpretation. They built what the Agency at the time asked them
to do, that was what they did, and they provided a system which
met the spec they were asked to produce and they actually provided
it at a very cheap rate if you benchmark the cost against similar
development. What they are now doing in the contract that Tony
has negotiated is absolutely bearing the risk, so if they fail
to deliver or, indeed, if we fail to deliver our targets in terms
of payments they suffer financially, so they have their hands
in the blood.
Q150 Mr Mitchell: Are you satisfied
that if there is any change in the system introduced by the Commission,
which is quite possible and, indeed, likely, the system can cope?
Mrs Ghosh: Yes. That is one of
the objectives of the greater flexibility in the IT system. My
policy people are working very closely with Tony to make sure
we do not agree to anything, for example in the CAP Healthcheck,
that could have significant operational problems for us.
Q151 Chairman: Mrs Ghosh, that concludes
our inquiry. I see that you studied Medieval Italian history.
Mrs Ghosh: I did.
Q152 Chairman: Have you found that
Dante and Machiavelli have been useful to you in your career?
Mrs Ghosh: I should say, Chairman,
that I studied a much earlier period of Italian history which
was the 6th Century when the Ostrogoths were raging around Italy,
so I leave it to the Committee to decide whether there are any
parallels between what I do now and the Dark Ages in Italy.
Mr Mitchell: There are lots of Visigoths
around at the moment.
Chairman: Thank you, Mrs Ghosh and Mr
Cooper.
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