It has been a tale of bungling which has placed an impossible burden on individual farmers. Michael Hickling looks at the background to the Rural Payments Agency fiasco which came to a head this week.
N July 2000, Nick Brown, the then minister, announced a brave new world for farming with something called the Rural Payments Agency (RPA) at the heart of it. The RPA he assured us, would modernise the way in which the Common Agricultural Policy was a
dministered by taking full advantage of the benefits of "electronic service delivery".
This he insisted, would deliver tangible benefits to taxpayers, customers and employees alike.
Johnston McNeill was to run the show. McNeill is a Belfast man, a mechanical engineer who moved via jobs in refrigeration and air conditioning companies to eventually become chief executive of the new Meat Hygiene Service when it started in September 1994 at York.
McNeill's climb took him onto Defra's management board – whose task is to "give corporate strategic leadership to the department" – as a non-executive director with "skills in operational delivery".
What could be better? He seemed just the sort of dynamic individual who could grapple with the bureaucratic complexities raised by the start of the Single Farm payment this year. The SFA was a new method of subsidy which worked out what each farm should get according to past receipts and their land area. It was a key part of the 2003 reforms of the Common Agricultural Policy. But it had to roll 11 previous schemes into one, and its complexity was compounded by the fact that it had to take into account thousands of previously unregistered land owners.
The agency received 120,000 subsidy claims to process. Before too long, alarm bells were ringing. Government departments have a long track record for hailing forthcoming all-singing, all-dancing computer systems which turn out to be black holes into which limitless public funds are poured and nothing sensible comes out of the other end. So it proved once more. At the start of this year, the Environment, Food and Rural Affairs Committee of the House of Commons discovered that the cost of this new computer system had doubled from £18.1m to £37.4m. Moreover, the computer supplier, Accenture, had been mixed-up about what sort of CAP forms its computer programs were supposed to be dealing with.
The RPA should have started making the single farm payments in February and should have paid 96 per cent of eligible farmers by the end of March. Delay, according to the MPs' committee could cost farmers an extra £25m in interest to banks. They accused Defra of giving "insufficient consideration" to the complexity of the scheme and of failing to anticipate an increase in claims from farmers.
When Lord Bach, rural affairs minister, appeared before the committee on January 11, he could not confirm when full payments would be made, or whether farmers would be given partial payments if there was a delay. But in a typical politician's tactic of blaming the messenger, Lord Bach turned on the committee. He told its members the timing of their report was deeply disappointing and blamed them for creating "unfounded alarm and uncertainty in the farming community".
Last month Lord Bach had more promises to make. This time he said that beginning at the end of February, £1.6bn would be going into farmers' and growers' bank accounts "With the bulk complete in March".
This was echoed by Johnston McNeill who said confidently "Our staff have shown dedication and a lot of hard work in recent months to deliver these payments and it is a great credit to them."
Yet this week the hapless McNeill was holding up his hands to admit that the electronic service that was promised couldn't after all be delivered. On Tuesday he told ministers the end of the month deadline for making most of the payments was impossible.
He was promptly replaced by Mark Addison as acting chief executive, who was instructed by Environment Secretary Margaret Beckett to report to her in a week's time.
Ms Beckett said that there were "structural issues" in the RPA which would be the subject of a fundamental review of the agency.
She told the agency's new boss to look at the agency's "current and possible future functions and the effectiveness of its relationship with my department and its other key stakeholders and to make recommendations for the future."
This all sounds like so much government gobbledygook to farmers facing financial distress as they fend off creditors, or at the very least put their businesses on hold.
With the system apparently in total disarray, they simply can't afford to wait for Margaret Beckett to go back to the beginning to start again.
