Farm subsidy failures condemned

Some farmers had long waits for their 2005 EU payments

The government's failure to get EU subsidies to thousands of farmers on time has been called "a master-class in bad decision making" by MPs.

Defra and its Rural Payments Agency failed in the "basic principles" of project implementation, the Commons Public Accounts committee said.

The 2005 payments should have been paid to 96% of farmers in England by March 2006, but only 15% got them on time.

Defra says improvements have been made and its 2006 targets were met.

The RPA, a government agency, had been charged with allocating about £1.5bn under the EU's single farm payment scheme (SPS) - a system based on land area, which replaced one based on production.

Work 'underestimated'

Its target was to pay out most of the 2005 payments by March 2006, but by October that year 3,000 farmers were still waiting.

The committee said Defra and the RPA had "underestimated the scale of the work needed".

The single payment scheme is relatively small, but its implementation last year to a near-impossible timetable was a master class in bad decision-making Edward Leigh Committee chairman

It said the government had tried to implement the most complex reform model in the shortest possible time.

This had "led to a series of risks which individually would have been severe but collectively were unmanageable", the report said.

It called for clearer accountability and responsibility among senior managers, better risk assessments, tougher testing of IT systems, realistic timetables and better communication with farmers.

'Financially precarious'

The committee's chairman, Conservative MP Edward Leigh, said: "The single payment scheme is relatively small, but its implementation last year to a near-impossible timetable was a master class in bad decision-making."

He said a "significant minority" of farmers had been left "stressed and in a financially precarious position".

The UK has also set aside £436m in anticipation of possible fines from the European Commission over the administration of the 2005 scheme.

We know that there is more to do to alleviate the difficulties faced by farmers Defra spokesman

Mr Leigh said Johnston McNeill - the former head of the RPA - had failed to confront his bosses at Defra with the "highly risky" project's problems.

He also said the then permanent secretary at Defra, Sir Brian Bender, bore "a large part of the responsibility."

Liberal Democrat environment spokesman Chris Huhne said the report proved the Labour government had been an "unmitigated disaster for rural Britain".

Millions 'wasted'

He said Wales and Scotland had introduced the changes with few problems, while in England "hundreds of millions of pounds" had been "wasted" and many farmers had been "pushed close to financial ruin".

A Defra spokesman said a "wide range of actions" had already been taken to improve performance - including changes to the way claims are processed for payment and better IT systems.

He said the RPA had met its formal target for 2006, to pay more than 96% of payments by 30 June.

He added: "However, we know that there is more to do to alleviate the difficulties faced by farmers and the wider agricultural community as a result of the implementation of the Single Payment Scheme in 2005.

"Defra will formally respond to this report within the two-month deadline."