The Rural Payments Agency and the implementation of the Single Payment Scheme: third report of session 2006-07, Vol. 1: Report, together with formal minutes(The Rural Payments Agency and the implementation of the Single Payment Scheme: third report of session 2006-07)

The EU Single Payment Scheme replaced 11 previous subsidies to farmers based on agricultural production with one payment for land management. The European Commission gave some discretion to Member States over how to implement the scheme, and the Rural Payments Agency (RPA), which is responsible for administering the scheme in England, opted for the dynamic hybrid model which incorporates elements of previous entitlement and new regionalised area payments based on a flat rate per hectare. A NAO report (HCP 1631, session 2005-06, ISBN 9780102943399), published in October 2006, found that the RPA underestimated the risks and complexities involved in implementing the hybrid model, and the IT system was never tested as a whole before the scheme was introduced. It failed to adequately pilot land registration, and underestimated the amount of work involved in both mapping the land and processing each claim, having to rely on often inexperienced temporary and agency staff to clear the backlog. The difficulties were not picked up early enough, neither by the RPA nor Defra, for corrective action to be taken in time, resulting in the RPA's failure to meet its own payment targets. Delayed payments have cost farmers money in additional interest and bank charges, and caused distress to a significant minority of farmers, particularly hill farmers. The cost of implementing the scheme was budgeted at £76 million but rose to £122 million by March 2006, with further cost increases likely. Following on from a previous Committee report on the RPA (HCP 840, session 2005-06, ISBN 9780215027115), published in January 2006 and in light of the NAO findings, this report focuses on aspects of policy decision-making and political accountability raised by the problems with the Single Payment Scheme. The Committee concludes the Scheme has been a catastrophe for some farmers and a serious and embarrassing failure for Defra and the RPA, and Defra's fundamental failure to carry out one of its core tasks (that is to pay farmers their financial entitlements on time) differentiates this issue from the myriad of botched Government IT projects. There is a need for greater expertise within government in the delivery of such complex IT projects, and the report also criticises the quality of advice given by the Office of Government Commerce and the IT system designed by Accenture as the principal IT contractor. Defra determined the policies which it required the RPA to implement and Defra leadership was at fault for accepting RPA statements that implementing the complex hybrid model to deadline was "do-able". The Committee argues that responsibility for this failure goes wider than the dismissal of the RPA chief executive, and ministers and senior Defra officials should also be held to account, particularly Margaret Beckett (the then Defra Secretary of State), Sir Brian Bender, (the former Defra Permanent Secretary) and Andy Lebrecht (the Director General for Sustainable Farming, Food and Fisheries). It concludes that a departmental failure as serious as this should result in the removal from office of those responsible for faulty policy design and implementation, and it recommends that new guidance on Ministerial accountability is needed in the event of such serious departmental failure.