Farm subsidy system 'not fit for purpose'

Ombudsman Ann Abraham criticised the refusal of the Department of Environment, Food and Rural Affairs (Defra) to pay 3,500 to a North Yorkshire farmer – and expressed astonishment a letter of apology from officials to another farmer was not even personally signed.

The farmer has branded the Rural Payments Agency (RPA), which is responsible for the blunders, as "still one of the most frustrating departments to deal with" and claims "the left hand never appears to know what the right hand is doing".

Yesterday, bewildered MPs expressed astonishment the Government has dug in over a relatively small amount of money as Ms Abraham – who called for the payments to two farmers after she ruled there was maladministration in the handling of their claims – raised concerns the RPA still fails to offer acceptable customer service.

She told MPs "systemic issues" at Defra and the RPA meant further complaints and demands for recompense would follow.

She added: "I think if they are not addressed and tackled we are going to be back here again. There is something about their service design which seems to get in the way of service delivery."

At a grilling by the House of Commons public administration committee, Tory MP Ian Liddell Grainger branded the organisations "incompetent".

Amid concern at continuing troubles identified by recent reports into the RPA, he said: "You've spent an inordinate amount of time not putting the house in order. I'm sorry I don't recognise anything you've said today."

He added: "I don't think you get it. I don't think you're fit for purpose."

Defra permanent secretary Helen Ghosh said she "absolutely understood" the frustration of farmers but insisted there was "another picture" to the one being painted.