Blundering farm pay agency under attack again

Margaret Hodge, chairwoman of the Public Accounts Committee (PAC), said that £1.3bn had been spent so far on tackling the crisis at the Rural Payments Agency (RPA), the body charged with processing Single Farm Payment subsidies to farmers, and warned that a new scheme to remedy shortcomings could not be ready for as much as another six years.

The warning came as Defra permanent secretary Bronwyn Hill, her predecessor Dame Helen Ghosh and the RPA’s current chief executive Mark Grimshaw, appeared before a PAC session on the Agency’s progress in which it was revealed that 7,802 farmers currently owe the Government money after being overpaid by the RPA.

Mr Grimshaw also drew the ire of Ms Hodge when he admitted he did not know how many farmers in total were affected by inaccurate payments.

And Ms Hill told MPs that the RPA may have to outsource its IT operations if it is to prevent another payment crisis, despite having already having paid one of their current IT providers Accenture some £217m.

Ms Hodge said the National Audit Office had calculated that the RPA had lost nearly £500m in fines to European Union because of late and inaccurate payments while a further £800m had been spent on administration.

She said: “You have now got another five years before there is a new scheme and we cannot, in defending the taxpayer’s interest, sit back and say, ‘Well £1.3bn lost to the taxpayer over the next five years is acceptable.’ So you’ve got to have targets for improvement.”

The UK is currently the second worst offender in Europe for making inaccurate or late payments to farmers, with a worse record than cash-strapped Greece.

Officials denied that costs had reached £1.3bn and said significant progress had been made in handling each subsidy claim.

However committee member Richard Bacon disputed this, saying that claims still cost £1,300 each. Dame Helen said that it was expected that the cost of handling each claim would be £760 by next year, a figure she conceded was still too high.

Ms Hodge also quoted new figures which showed four out of 10 farmers to be dissatisfied with the RPA.