The troubled Rural Payments Agency has admitted that it will not achieve stability in its IT systems for processing farmers’ Single Payment Scheme claims until 2008 – three years after the scheme’s introduction.
The admission comes in the agency’s 2006-07 annual report, released quietly during the parliamentary recess, in which interim chief executive Tony Cooper looks back over a “turbulent” 12 months. Back in March the government said it was "confident "the agency's management team could turn round the failing system.
Earlier this year, MPs called for a cabinet minister and senior civil servants to resign or be sacked after the failure of the RPA’s IT project to implement the SPS, which consolidates 11 separate EU subsidies.
The huge IT project descended into fiasco, leaving farmers out of pocket by up to £22.5m. The cost to the government has run into hundreds of millions of pounds.
The annual report reveals that the government’s Defra agriculture department has had to stump up £63m to compensate for EU funding lost because of the late handling of SPS claims in 2005, while RPA has been forced to pay out nearly £1m in interest payments to farmers for 2005 claims not met by 30 June 2006.
At the beginning of the 2006-07 financial year, the RPA still had “serious problems” in dealing with SPS claims from 2005, and “it quickly became clear that we could not expect to achieve stability until SPS 2008”, Cooper admits in his foreword to the report.
“There remain a legacy of data problems from implementation of SPS 2005 which will affect every year of SPS until we are able to tackle the deep-rooted underlying issues,” it says.
The RPA hit its target of paying 96.14% of claim value of SPS 2006 payments by 30 June 2007, but Cooper adds: “A significant residue of corrective activity will be carried over into the 2007 Scheme year.”
Some 2005 claims have yet to be paid, with others under review for under or overpayment.