Farm payment fiasco fine expected

About £1.5bn was meant to be allocated to farmers in England

UK taxpayers could face a £300m fine because of the government's failure to pay European subsidies on time to farmers in England.

The environment department, Defra, said it was still negotiating the exact amount with the European Commission.

A computer problem at the agency set up to deal with EU subsidies caused delays in payments to thousands of farmers.

Last month, a former boss of the Rural Payments Agency (RPA) apologised "unreservedly" for the late payments.

Johnston McNeill, who lost his job over the issue, told MPs in a special secret committee session that the scale of problems with the IT system only became apparent at a very late stage.

New provisions

A Defra spokeswoman said no final decision on the fines had been taken.

"We have made accounting provision to cover potential financial corrections for payments made to farmers during 2005/06 and 06/07," she said.

These provisions were different from the previous year, when Defra's accounts estimated the fine for only one year, she added.

The RPA, a government agency, is charged with allocating about £1.5bn each year under the EU's single farm payment scheme (SPS).

The money from 2005's allocation should have been paid in early 2006.

But some farmers are still waiting for their payments.

Meanwhile, Environment Secretary David Miliband told the Commons on Thursday that more than £900m of 2006's allocation had now been paid to 77% of claimants.