Late farm payments a 'Whitehall fiasco'

Delayed farm payments have been branded a 'Whitehall fiasco' by an influential committee of MPs.

Delayed farm payments have been branded a 'Whitehall fiasco' by an influential committee of MPs.

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FARMERS struggling to cope with delayed payments are victims of an extraordinary civil service blunder that will cost the tax-payer £180m a year, MPs have said today.

* Thousands of farmers across Yorkshire still waiting for basic payments to keep themselves financially afloat

Meg Hillier MP, chair of the Public Accounts Committee

Meg Hillier MP, chair of the Public Accounts Committee

* Influential group of MPs labels payments hold-up a 'Whitehall fiasco'

* Senior civil servants accused of squabbling and failing to deliver system properly

The mismanagement of the rural payments scheme has left farmers relying on credit cards to keep their animals alive and has been dubbed a 'Whitehall fiasco' by the chair of a Commons committee.

'Childish' civil servants earning £140,000 a year created such a 'dysfunctional and inappropriate' culture within the Common Agricultural Policy Delivery Programme that trust broke down and was 'deeply damaging' to farmers, the report released by the Public Accounts Committee found.

With dairy farming in the midst of its worst cash crisis for a generation, The Yorkshire Post is calling for clear labelling of all dairy products so that shoppers can know when they are backing British farmers at point of sale.

With dairy farming in the midst of its worst cash crisis for a generation, The Yorkshire Post is calling for clear labelling of all dairy products so that shoppers can know when they are backing British farmers at point of sale.

Food labelling has also come under fire from MPs as a lengthy investigation by another Commons committee found that current guidelines have the potential to mislead consumers.

In line with the Yorkshire Post's Clearly British Campaign, the Environment, Food and Rural Affairs Select Committee is demanding Defra ask the EU for support in establishing clear rules that stop items such as butter labelled as 'British' when the raw product is from overseas.

On farm payments Meg Hillier MP, Chair of the PAC, said: "The Programme was set up to deliver support to UK farmers.

"Instead, it delivered an appalling Whitehall fiasco.

“It was frankly embarrassing to learn of senior and highly paid civil servants arguing to the detriment of hard-pressed farmers."

The Rural Payments Agency paid just 38% of Yorkshire's farmers the money they were owed from the EU in early December compared to 90% of those the year before, and for farmers and landowners who own common land, they might not receive their payment until later this month.

Struggling for four months over the winter period has led to many in the sector relying on credit cards to buy animal feed, according to the National Union of Farmers.

Asking farmers to complete forms online in what the Government hoped would be a shining example of digital innovation was also dubbed inappropriate by the committee considering poor broadband speeds in the countryside.

Delaying payments mean the Delivery Programme's costs rose by 40% from £155m to £215m and fines from the European Commission totalled £642m between 2005 and 2014.

And this is set to rise with an extra £180m in penalties expected annually over the next few years.

The damning appraisal comes just six years after Labour's handling of the very same payments system was labelled a ‘masterclass in maladministration' by the National Audit Office.

The Common Agricultural Policy Delivery Programme to distribute EU funds to farmers was changed in 2012 with quango the Rural Payments Agency and the Government Digital Service working together to create an IT based method of delivering the money.

However Liam Maxwell, the Government's Chief Technology Officer who earns £140,000 and Mark Grimshaw, chief executive of the Rural Payments Agency, who takes home a £160,000 salary, were heavily criticised in the report for not giving a reason for their territorialism and unacceptable behaviour when the committee heard evidence earlier this year.

“The enduring mental image is of managers, having seemingly lost sight of the purpose of the project, devoting their energies to a childish turf war instead," said Ms Hillier, who expressed sympathy for farmers who have had payments delayed when money in the sector is already stretched.

In the report’s recommendations to government, the Committee says Defra should review its approach to tackling serious failures of management and put in place measures to stop this ever happening again.

It also urges the department to set out “clear milestones” in the coming months for when it expects to pay farmers for future years and when it will return to previous performance levels.

On farm pricing, MPs have told Defra they want to see urgent changes on guidelines for labelling, and bolster the role of supermarket watchdog, the Grocery Code Adjudicator.

Chair of the Environment, Food and Rural Affairs Select Commitee, Neil Parish said: "Defra must strengthen its guidelines around country of origin labelling and continue to press for EU support in establishing clearer and better labelling requirements."

A Defra spokesperson said: “The new Common Agricultural Policy (CAP) is widely acknowledged as the most complex ever and the task of setting up a new IT system to handle this additional complexity was a significant challenge. Throughout this period the collective focus has always remained on getting payments out to farmers as quickly as possible.

“While there was a problem in March last year with one part of the online interface that enabled farmers to put data directly into Rural Payments, the core of the system has always worked. Over 87,000 farmers successfully registered on the system and it has been used to process and pay over 70,800 farmers – over 80% of all those eligible – their 2015 Basic Payment Scheme payment, totalling £1.11 billion.

“Almost all farmers in England will be paid by the end of this month and the Rural Payments system has been further improved for 2016 to make it easier for farmers to apply for CAP payments.”

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