Single Payment Scheme

James Paice Excerpts

Friday 4th March 2011 Written Statements

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

In my statement of 16 December, Official Report, column 120-21 WS, I promised to keep the House informed of the Rural Payments Agency’s (RPA) progress towards its 2010 single payment scheme (SPS) payment targets set by the previous Government.

The first target, to make payments to 85% of eligible claimants by the end of December 2010, was met with 85.5% of the eligible population paid at that date. The second target is to pay 95% of the total value of eligible payments by the end of March 2011. As I made clear in my earlier statements, this target is particularly challenging given the legacy of system and data problems that need to be corrected before accurate payments can be made.

The previous years’ achievement of targets has been at the expense of accuracy resulting in EU fines (disallowance) and a massive backlog of cases where it is believed overpayments or underpayments have been made.

The RPA oversight board which I chair decided that this state of affairs could not continue. It therefore decided to ensure the RPA makes full use of all options open to us to reduce the backlog of error cases by not pursuing those where the farmer could not reasonably have been expected to identify an error. Nevertheless there remains a substantial backlog of cases which need to be reviewed for potential errors. The board also set a priority to ensure that this year’s payments are accurate so that a line can be drawn under past failures and farmers will know their precise entitlements going forward.

Given the complexity of the existing systems and the inadequacy of the IT systems, speeding up payments is not simply a matter of increasing resources. In the last six months some 140 “fixes” have been made to the IT system which now allows us to be more confident in the accuracy, but does not significantly speed up the process.

The consequence of that, I regret to inform the House, is that the RPA will not achieve the target of paying 95% of claims by value by 31 March 2011. The estimated figure will be nearer to 90%.

We are therefore looking at the possibility of making manually validated payments to those who would otherwise be unlikely to be paid on the system before 30 June. However we need first to ensure that such payments would meet the required standard of accuracy in order to avoid further EU fines (disallowance).

I am very conscious that for many, if not all, farmers the further potential delays could involve considerable hardship or costs. We already make manual payments to hardship cases referred to us by farming charities and representative bodies. However if the RPA is finally to put the legacy of chaos, errors and disallowances behind it we need to ensure that payments made this year are based on accurate data so that we can move forward.

I met with the RPA chief executive and farming industry representatives to discuss this earlier this week. The representatives were told of the situation and have asked us to give urgent consideration to making partial payments to those farmers who are not likely to be paid soon. I have undertaken to examine this option and will continue to keep the House informed.