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Baroness Hanham: My Lords, as I understood her, the Minister responded that the precept for the Olympic Games is on London ratepayers. However, from the Statement made by Mr Woolas, it seems that there is a general impost across the whole of the country. We ought to make it clear that it is just London council tax payers who are paying for the Olympic Games. I think there is a mistake in his Statement.

Baroness Andrews: My Lords, it is true that it is just London taxpayers, because the benefits will go to London. The figure of 4.5 per cent is spread out across the country to illustrate that.

The noble Baroness, Lady Hanham, asked about capping of what she described as "two hapless councils". We are pleased that there are only two and no more. Having set principles within a capping regime, as we are required to do, we have to apply them. It is unfortunate that the two councils have fallen into that category. They will be able to challenge the decision. They have that right. Indeed, they may choose to challenge the billing cost. They are free to do that. Nevertheless, they have fallen outwith the regulations.

Both noble Baronesses ask me what budget reductions would be required. In Medway, it would be £382,000 and in York, it would be £285,000. Those are the figures that we are talking about. The noble Baroness, Lady Scott, asked me about Lyons and, in particular, whether we could look forward to the scrapping of the capping system after Sir Michael's report. Would that I could anticipate what the gentleman will come up with. We shall have to wait and see. It is one of many aspects of the funding regime and the form and functions of local government that he will be looking at, and I am afraid we will have to be patient.

I believe that I have dealt with the other questions on the Lyons report that were put to me. I take the point on which the noble Baroness concluded. We are obviously keen to keep council tax down, but we believe, and this Statement demonstrates, that this year we have a settlement that is fair and negotiated and that will fully fund the services that are needed. With the LGA, we are looking at many other hard issues about new burdens; for example, adult social services, and so on. We look forward to working with the LGA as we approach CSR07 to make sure that we have as rational, fair and efficient a system as possible.
 
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6.30 pm

Lord Brooke of Sutton Mandeville: First, my Lords, if the 4.5 per cent is spread out across the country, as the Minister said, what would the London figure be, including the Olympic element, on its own? Secondly, by what average percentage increase has the Mayor of London's precept increased since his first impost upon Londoners?

Baroness Andrews: My Lords, I understand that without the Olympic precept, which is, of course, payable only in London, the London increase would have been 2.8 per cent rather than the actual 4.5 per cent London average. I do not have the other figures to hand, but I will write to the noble Lord about that.

Lord Skelmersdale: My Lords, we are used to Ministers producing spin, but there are moments, especially today, when I really grieve for the Minister. With a perfectly straight face, she read out paragraph 5 of this Statement. It says:

"By 2007–08, government grant for local services will have increased by more than the rate of inflation for 10 years in succession".

During this time, the Government have piled demands, not least recycling, on local authorities. So the two things simply cannot possibly go together.

Baroness Andrews: My Lords, I merely stated the facts relating to the 10 years. In terms of recycling, the noble Lord makes an important point. It is one aspect of the new demands on local authorities, for all sorts of reasons that he would know, where there are increased burdens in cost. It is one element on which we are working particularly closely with the Local Government Association to establish where we go in future.

Rural Payments Agency

6.32 pm

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Bach): My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State to a Question asked in another place earlier this afternoon. The Statement is as follows:

"In my Written Statement on 16 March, I told the House that the Rural Payments Agency (RPA) had advised me for the first time on 14 March that it would no longer be possible to make the bulk of single payment scheme (SPS) payments by 31 March and that, in the light of this unacceptable situation, a new chief executive would be appointed.

"I fully understand and share anxieties that these events will cause to the farming community and deeply regret that this unacceptable situation has arisen.

"I received an initial report from the acting chief executive (Mark Addison) into the situation at the RPA on 21 March.
 
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"There are substantial problems facing the RPA in getting SPS payments out to farmers, much greater than had previously been reported to Ministers. As I know the House and the farming community would expect, speeding up those payments remains the overwhelming priority of Defra Ministers and the RPA itself. However, it also remains essential that actions taken now in response to these problems are very carefully considered, but are also sure-footed to avoid making them still worse in the future.

"Mr Addison's report identified some initial steps, which should enable us to speed up payments, without losing sight of the need to properly manage the disbursement of a large sum of public money.

"The initial steps which I have sanctioned are: focusing resources in the RPA on making the 2005 payments as fast as is legally possible; removing disproportionate checks from the payment authorisation system to speed up the flow of payments once claims have been validated; prioritising work on validation of claims to release the maximum value of payments as quickly as possible, as opposed to the maximum number of individual claims, an action which will mainly benefit historic customers; centralising key mapping work at the most productive office (Reading); reviewing what further steps can be taken to simplify the process so that decisions can be made later this week; strengthening the RPA's capacity in key areas and changing the RPA's structure to streamline command and control.

"The Minister for Sustainable Farming and Food (Lord Bach) and the RPA acting chief executive have invited senior representatives of the industry to weekly meetings, the first of which took place on 22 March, so that close contact can be maintained with them, and will also be engaging urgently with the banks and other key stakeholders.

"Central to the success of these steps is the team at RPA. I am confident that with Mark Addison at the helm, we have in place the right people for the job in this next stage. Their work and commitment remain key to delivery. They have worked with absolute dedication throughout often in the face of considerable difficulties. I am sure they will continue to do so".

My Lords, that concludes the Statement.

6.36 pm

Baroness Byford: My Lords, I am grateful to the Minister for repeating in the form of a Statement the Answer to the urgent Question asked by my honourable friend in another place. These are very disturbing times. I have tried twice to table a topical Question on this subject. I have raised the issue of the Rural Payments Agency with the noble Lord on several occasions. It is quite right that we should take this Statement today.
 
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I find the Statement disappointing. It indicates where there are problems, but my reading of it does not actually give any answers to those problems. I will put some questions directly to the Minister, which I hope he will be able to answer. The Statement refers to,

"focusing resources in the RPA".

What resources are those and how will that be done? It refers to "removing disproportionate checks". Which checks are disproportionate and how will that be done? It refers to "reviewing . . . further steps" to simplify the process and so that,

"decisions can be made later this week".

Can that decision be made in time for our debate on Thursday, when we shall at least have a chance to look at the issues more fully? The Statement also refers to,

"engaging urgently with the banks and other key stakeholders".

The banking part is key, because so many farmers are finding themselves unable to pay their bills.

This Statement is long on problems, but short on facts and information. The Secretary of State accepts that there has been total failure and that the situation within the RPA is unacceptable. There are no reassurances, however, as to how this might be resolved, and no timetable is given. Is it just the mapping end that is not completed? How many farms have had their maps agreed and how many are still outstanding? Is it just that the RPA payment system is unable to cope? Is it that the IT system is not up to the job that it has to take on? Or is it that the new mapping exercise does not fit in with the previous maps that were held by many farmers who received historic claims? Considering the delay, will the department consider delaying the date—16 May 2006—by which the new applications for single farm payments are usually made?

I referred to engaging with banks. I understand that many farmers are at their wits' end and I have referred one case to the Minister. I am very grateful to him for taking it up. We should not, however, be in the position of having to take up individual cases because an agency has totally failed to do what it should do. In engaging with banks, will the Government consider providing an emergency fund where perhaps the banks are not willing or able to extend credit any further? As one tenant farmer said:

"I am close to my overdraft limit, with the rent to pay on 5 April, and with no single farm payments money to hand".

I have also contacted the Farm Crisis Network, which records that farmers have been calling it regularly over the past three weeks, very distressed that late payment of their subsidies is causing cash-flow problems. It has a knock-on effect not only on them but on their suppliers and the banks. Many callers are saying that fuel suppliers, feed merchants and others are refusing to allow farmers any more supplies or credit and that some banks are refusing to increase their overdraft facility. I ask the Minister what the Government will do about that and whether the Government will pay interest on the money that is outstanding.
 
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I understand that the helpline has taken 50-plus cases in the south-west alone. In each of those cases the problems have been exaggerated because of the late payment under the single farm scheme. These cases affect not only the farmers but their families. Not all of the calls in the south-west were received by the helpline itself; many were received directly at the volunteers' homes. They are even looking into a case where a farmer has committed suicide, partly caused, they believe, by the anxiety of this terrible state of late payments.

I know that in another place some Members have called for the Minister's resignation. No doubt he will consider his own position. He may feel it unfair that he should be the one to be singled out and in the firing line when the responsibility clearly lies with the Secretary of State herself. I have asked some very real questions. I expect answers to those questions. If they are not forthcoming, we will certainly expect them when we debate the matter further on Thursday.

6.41 pm

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