UK fined £36m over farm payments

The fine relates to 'inadequate controls' on payments

The UK is to be fined £36m (53.7m euros) by the European Commission for mistakes in payments to farmers.

The penalty relates to the 12 months from October 2003, long before the Single Payment System(SPS), which has been beset by problems, was brought in.

The fine relates to "inadequate control procedures or non-compliance with EU rules" on farm spending.

It has been estimated by MPs that the UK could be facing fines of as much as £300m for the delays involving the SPS.

'Control'

The commission has ruled that EU countries will have to pay out 285.3m euros (£193.8m) in total for problems to payments from 2003 to 2004.

Only Spain, with a fine of 60.6m euros (£41.2m) has been penalised more than the UK.

Mariann Fischer Boel, European commissioner for agriculture and rural development, said: "We have been working very hard to ensure the best possible control over farm spending.

"The clearance procedure is a vital process in ensuring that taxpayers' money is used properly and that incorrectly spent amounts are recovered."

The UK environment department, Defra, is negotiating with the EU over the exact amount of the fine over the SPS.

A computer problem at the Rural Payments Agency set up to deal with EU subsidies caused lengthy delays in payments to thousands of farmers when the SPS was introduced.

The RPA is charged with allocating about £1.5bn of EU money to farmers each year under the SPS.

The money from 2005's allocation should have been paid in early 2006, but there were widespread delays with farmers left struggling to survive.