MPs question Defra’s ability to handle Brexit after rural payments fiasco

Report on full impact of delays with Common Agricultural Policy funds distribution says UK taxpayers will be left with £642m in penalties 

By Jim Dunton

09 Feb 2017

Members of the Public Accounts Committee have voiced concerns over the Department for Environment, Food and Rural Affairs’ ability to deal with the UK’s departure from the European Union in the wake of 2015-16’s rural payments funding fiasco.

Tens of thousands of farmers were left waiting for months to receive their share of £1.8bn in EU Common Agricultural Policy funding because of shortcomings with the Rural Payments Agency’s mapping technology.

In addition to the hardship caused to farmers, the committee’s latest report on the crisis says UK taxpayers will be left footing a bill of £642m in “disallowance penalties” imposed by the European Commission when CAP rules are not complied with.

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MPs said the latest figure for Defra’s disallowance rate from 2005 to date was 2.98%, some 19 times higher than Germany’s.

The report said a key contributor to penalties were issues with land-data and mapping, and that Germany had a team of 200 people to ensure its data was no more than one year old, while until recently the RPA had “only a dozen or so people” performing the same task.

Difficulties that emerged in December 2015 meant just 38% of CAP payments for the 2015-16 round had been made, against previous years’ allocations of 90%. MPs said thousands of farmers were still waiting for their full payments nine months afterwards.

The PAC report said that while the extent of the RPA’s failure to pay farmers on time was clear, Defra still had no idea of level of hardship that had been caused.

It warned: “Defra’s record of failure when developing systems to support subsidy payments to farmers does not inspire confidence in its ability to cope with the challenges associated with Brexit that lie ahead.”

Committee deputy chair Richard Bacon said farmers had suffered badly from the collapse in service levels and government has done too little to help them cope, while taxpayers would be “hit in the pocket” by the failure.

“Rapid and effective change is required during what is a critical phase for the Rural Payments Agency, whose chief executive is leaving at the end of this month, and the Department for Environment, Food and Rural Affairs more widely,” he said.

“If farmers are to be properly supported through Brexit and beyond it is vital their interests are represented at senior level. In particular, the RPA must be at the table during discussions of any future subsidy payment scheme.”

A Defra spokeswoman said the CAP was “a complex and bureaucratic scheme” and that the government was working to improve the system and ensure farmers got the support they were entitled to.

“We have made major progress – this year the Rural Payments Agency has already met its target to pay 93% of farmers by March 2017, and it is working hard to get outstanding payments into bank accounts,” she said.

She added that the UK’s departure from the EU represented “one of many opportunities to design a better system” to support farmers and cut red tape.

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