Probe into 'abuse' of cull payouts

Defra is concerned about the cost of valuation

Government ministers are reported to be investigating allegations of abuse of the foot-and-mouth compensation system.

Concerns have been raised that livestock valuers and farmers have colluded to increase the value of animals culled during the crisis.

The Independent newspaper says Chancellor Gordon Brown and Secretary of State for Rural Affairs Margaret Beckett are alarmed at evidence that a lack of financial scrutiny is costing the taxpayer millions of pounds.

We are looking at the whole system of valuation

Defra

The Department of Environment, Farming and Rural Affairs (Defra) has said it was "looking at the situation very carefully".

A Defra spokesman said: "We are concerned about the cost of valuation in that the initial system was designed to speed up the valuation process.

"We need to ensure that it represents good value for money and cost effectiveness and expertise."

Changes

There have been 1,887 cases of foot-and-mouth resulting in the slaughter of 3,593,000 animals.

According to Defra, the estimated compensation costs are £925m, of which £871m has been paid to farmers.

Foot-and-mouth facts

Total cases: 1,880

Slaughtered: 3,593,000

New cases Tuesday: 3

Awaiting slaughter: 27,000

Awaiting disposal: 11,000

The Defra website says changes have been made to the valuation procedure, giving farmers the option of payments at standard rates or of having animals valued by a valuer.

"This is intended to help speed up the process of valuation, while retaining the possibility of individual valuation if a farmer wishes."

The Independent says valuers are paid 1% commission for every valuation they carry out on the government's behalf, with a minimum fee for a day's work of £500 and a maximum of £1,500.

The valuation bill so far has reached £4.7m, with "a couple of million" still owing, according to Defra.

Minimum prices

Agriculture and Treasury ministers are now said to be examining the possibility of appointing their own valuers to prevent abuse.

The Independent also claims official prices set by government are being used as "minimum" prices by valuers, with many farmers nominating valuers who will put a higher price on their livestock.

Some farmers compensated in February received about £700 for a breeding cow.

Similar animals will now fetching up to £1,400, says the paper.

Earlier this week it was revealed that Prime Minister Tony Blair has suspended the clean-up of affected farms amid concern over escalating costs.