Government steps in after another damning report on failing Rural Payments Agency

THE Government today stepped in to take closer control of the beleaguered agency which pays EU subsidies to farmers in the wake of another damning report into its leadership, systems and value for money.

Agriculture minister Jim Paice said he would chair an oversight board of the Rural Payments Agency in a bid to improve the situation at the organisation, which will also see a new leadership team installed.

Targets have also been brought in to reduce the huge costs of delivering the single payment scheme (SPS) for landowners to maintain their land, which had stood at an estimated 1,743 per claim.

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The RPA will be expected to bring down the cost of processing each claim from current levels of around 1,043 to 870 this financial year and 644 by 2013, Mr Paice said.

The agency has been the subject of a series of reviews in the past few years, including three by the National Audit Office - the most recent of which criticised the high cost of processing claims, the failures of the IT system and mistakes in paying subsidies.

Last October, the Public Accounts Committee chairman labelled the organisation's processes for paying out 2.3 billion a year in farming subsidies a "masterclass in misadministration".

The latest report was commissioned by the previous government and today made wide-ranging criticisms of the RPA, warning it was not well run or fit in its current state to cope with changes to the Common Agricultural Policy (CAP) payments due in 2013.

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The study said the agency did not focus on value for money, but simply on delivering payments on time - which in the past it had failed to do for many farmers.

The review, led by David Lane working with Deloitte, PWC and Gartner, also said the leadership at the RPA had "largely served its purpose" and there was a need for change.

It criticised those at the top of the organisation for resisting and attempting to disrupt the latest review and failing to accept - and even challenging - the findings of the NAO report.

There was a lack of governance and oversight within the RPA and by Defra, the report said.

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The review said the organisation was not "broke" and its existence should not be called into question.

But given the negative connotations of the RPA "brand", the review team suggested a rebranding of the organisation as part of efforts to mark a new lease of life for the agency.

It also made a series of recommendations including bringing in targets for costs per claim, potentially taking away some of the other schemes it handles such as cattle movement monitoring, bringing in a target to achieve 100% online claims and urgent changes to the leadership.

The chief executive of the RPA Tony Cooper last week announced he would be standing down at the end of the month, and today Mr Paice said the Government was looking for a new chief executive, with an interim head announced in the next few days.

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Responding to what he described as a "no holds barred" review, which was completed before the general election but only published today, Mr Paice said it would be his job to move the RPA forward.

"We know it's not delivering either the service farmers want or the value for money for taxpayers," he said.

Mr Paice said it was "hugely important" to create a new leadership team and ensure financial controls to improve value for money, while also making it more flexible and adaptable to future changes to the EU agricultural payment system.

But he said there was no point in changing the current flawed IT system at a huge cost, to deliver a system of payments that may be in existence for only two and a half years before the CAP is altered.

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And he said: "I'm not going to change the brand at all. We know the RPA is not a brand that carries a lot of cash value but we can't spend a lot of time faffing around with names and note paper."

Instead he said he wanted to focus on making the organisation better, adding the RPA was not immune to the tightening of Whitehall budgets.