Taxpayers hit by cost of civil service failures

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Failures to pay subsidies to farmers correctly have cost taxpayers around half a billion pounds in European Union fines in the past few years, the National Audit Office said.

Auditor general Amyas Morse has not signed off the accounts of the Environment Department (Defra) due to the latest penalties worth £46m for failing to meet EU regulations for payments to producers.

He also qualified the accounts of Defra and the Rural Payments Agency, which administers the subsidies in England, because of failures in making an accurate assessment of how much farmers had been over or underpaid since the scheme began.

The Rural Payments Agency has been beset with problems in administering the system of subsidies brought in in 2005, which pay farmers based on the amount of land they have rather than, as previously, how much they produce.

The National Audit Office said the penalties had been incurred as a result of weaknesses in management and administration of the agency, particularly during the early years of the “single farm payment” subsidy scheme.

The total value of the fines is currently £590.4m since 2008-2009, including provisions for an estimated £125.4m in penalties which have not yet been finalised.

In the past year Defra recognised fines of £46m imposed by the European Commission for earlier failings.

The report from the NAO said that the Rural Payments Agency continued to experience considerable difficulties.