The bill to taxpayers in Brussels’ fines for the Government’s mishandling of EU financial help for farmers is likely to top £580m, a public spending watchdog said.
More than £400m has already been handed over to the European Commission, another £89m is due and allowance has been made for a further £84m, Department for Environment, Food and Rural Affairs (Defra) accounts show.
But the National Audit Office (NAO) said the cost to the public purse was likely to exceed that sum by the time the accounts for the current phase of the Common Agricultural Policy (CAP) – from 2005 to 2015 – were finalised in 2019/20.
The Rural Payments Agency (RPA) was beset with problems in administering the system of subsidies brought in in 2005, which paid farmers based on the amount of land they have rather than, as previously, how much they produce.
The NAO pointed to “weaknesses in data quality and cross checks” as the major cause of the huge fines and called on Defra to ensure lessons were learned to counter the “significant risks” of similar problems resulting from the introduction of a more complex CAP regime from 2015.
NAO chief Amyas Morse welcomed “good progress made by the Department and RPA in rectifying past overpayments and underpayments to farmers, and in processing payments more accurately”.
His praise came as he gave a clean bill of health to Defra’s accounts for the first time since 2007, but warned the scale of fines in the pipeline meant they could be qualified again in coming years.
“The Department faces a number of significant risks in implementing impending CAP reform...and it will need to manage these well if it is to avoid a repeat of the high penalties imposed following the previous reforms in 2005,” he said.
A Defra spokeswoman said: “We are determined to implement the CAP in England in a way that is as simple, affordable, and effective as possible.”