MPs attack farm payments scheme

The government has failed to keep control of EU payments to farmers following the "poor implementation" of a subsidy scheme, according to MPs.

The much-criticised introduction of the single payment scheme by the Department for Environment, Food and Rural Affairs in 2005 is continuing to cause problems for farmers, the Commons' public accounts committee said.

Nearly 20,000 farmers' entitlements under the 2005 and 2006 schemes were calculated incorrectly and overpayments to farmers in those two years totalled some £37m, a report found.

Individual farmers who were overpaid have yet to be told how much they owe and when repayment is required, leading to "uncertainty for many farmers".

The Rural Payments Agency has been widely criticised for its rushed implementation of the single payment scheme, which replaced previous EU agricultural subsidy schemes in 2005.

MPs on Tuesday described the scheme as the "most complex option for reform" implemented in the "shortest possible timescale", and said the RPA had badly underestimated the scale of the task.

The committee, however, found that the agency had taken "little action" to recover the money and there was a risk that farmers may have unknowingly spent it in the meantime.

It was important to provide farmers with a predicted amount and payment date to assist them with their financial planning, the report said.

Committee chairman Edward Leigh said: "The agency's failings in implementing the scheme might lead the European Commission to fine the government hundreds of millions of pounds.

"And those failings have added some £50m to the cost of the agency's business change project through which the scheme was implemented."

He went on: "Restoring farmers' confidence will depend on the agency's improving its business processes and IT systems to the point where it can process claims efficiently and promptly and tell farmers when they are likely to be paid."

A Defra spokesman said: "While it is well documented that there were problems with payments during the first year of the scheme's operation (2005/06), the performance of the scheme has been turned around and the Rural Payments Agency met all of its 2007 payment targets ahead of schedule.

"But, of course, Defra and the RPA recognise that further steps need to be taken for the agency to again provide an acceptable level of service to its customers."