Rural agency in cost-cutting drive

The Rural Payments Agency (RPA) will have to shave 15 per cent from the cost of issuing the payments as part of an efficiency drive over the next 12 months.

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It will also have to cut its administration costs by nearly 10 per cent, improve its staff absence rates and slash the amount of errors it makes in the distributions of payments. Overall, the RPA's budget for 2010-11 has been reduced by 30 per cent from levels seen in 2007-08.

The move follows strong criticism over the massive cost of handling the Single Farm Payments system, subsidies paid by the European Union to all farmers. In contrast to other countries, which spend just a few hundred pounds per claim, the RPA has been spending more than 1,700 per payment.

The astronomical cost was at the heart of a critical National Audit Office report into the agency's failing, which accused the agency of being "a masterclass of maladministration". A Public Accounts Committee's scrutiny of the RPA was also critical.

The agency will also have to make sure that 85 per cent of claimants under the 2010 scheme are paid by the end of the year and that 95 per cent of the monetary value of claims are settled by the end of March 2011

The sweeping cuts are understood to have been agreed jointly between RPA officials and the Secretary of State at the Department of the Environment, Food and Rural Affairs (Defra), Hilary Benn, and were announced upon the publication of the RPA's Business Plan 2010/11 document.

RPA chief executive Tony Cooper said: "We will strive to address the issues identified and reported on by the National Audit Office and look to stabilise the operation, making essential changes and improving the quality of the data we hold.

"There are various reviews of the agency under way at the moment. As the results of the reviews emerge we will fully engage with Defra and establish the best way of delivering the agreed actions to improve the way we deliver our services. I expect this will lead to some changes to the activities set out in this plan."

A statement from Defra said: "The RPA has shown year-on-year improvements in delivering services and this has been reflected in a broader range of more challenging targets for 2010-11.

"There will again be a target on the timing of payments under the Single Payment Scheme; 85 per cent of claimants under the 2010 scheme to be paid by December 31 and 95 per cent by monetary value of valid 2010 claims to be paid by March 31, 2011.

"However, the RPA is aiming to focus further on proactive customer engagement and a new target has been introduced to promote the use of its e-channel services, so that farmers can submit their applications online.

Tory Shadow Defra Minister Nick Herbert meanwhile reaffirmed his party's commitment to put a politician in charge of the beleaguered industry.

"The performance of the RPA has been a disgrace," he said. "It needs a fundamental shake-up. Jim Paice (Shadow Farming Minister) will chair the RPA board to achieve some accountability, so farmers will know where the buck stops."