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NAO report slams Rural Payments Agency

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Computer problems played a significant role in the chaos affecting England's Rural Payments Agency (RPA), according to a report by the National Audit Office (NAO)

Changes to the specification, inadequate testing, and the lack of a contingency plan all contributed to the failures that caused delays in payments to farmers and undermined the RPA's efforts to find efficiency savings.

The report, published today, focuses on the difficulties encountered by the agency in making payments under the EU's Single Payment Scheme. It led to events which caused distress to a significant minority of farmers, it cost farmers money in additional interest and bank charges, cost the agency £122.3m compared with a budgeted £75.8m, and has left it with little prospect of achieving its projected savings of £164m between 2005-09.

The Department for Environment, Food and Rural Affairs (Defra) and the RPA notified farmers that they aimed to start payments in February and complete 96 per cent by the end of March; but by that time it had paid £225m (15 per cent of the £1.5bn) to 31,000 farmers (27 per cent). It processed 95 per cent of payments by the end of June, but in the interim the chief executive had been removed from his post.

One of the major causes, according to the NAO, was that the timetable for implementation of the scheme became very tight when changes were required in the specification for the computer system – due largely to changes in EU regulations.

Following this, the RPA began to use the IT without testing it as a whole, and soon found that it was unstable. Another mistake was that it deferred the development of software to draw out key information on the progress of each claim in order to focus resources on the parts of the system it thought would help it meet the deadline.

It also underestimated the work involved – expecting to record 1.7 million parcels of land instead of the 2.1 million with which it was faced – and pressed on with development after the Office of Government Commerce had assessed it as "red" under a Gateway Review. Defra did not recommend invoking a contingency plan that was under development or delaying the use of the system by a year.

Another problem was that no system was put in place to identify how much needed to be done to complete an individual claim.

The problems were intensified by the implementation of the scheme as part of a major business change process.

"The department and the agency knew from the beginning this was going to be a very high risk scheme," said Phillip Gibby, the director of Defra value for money studies at the NAO. "Also, they have not shared or connected effectively between the different teams.

Among the NAO's recommendations are that the RPA:

  • undertakes a cost benefit review of processes and systems by the end of March 2007 to determine whether they are adequate for business needs;
  • finalises and tests plans for a partial payment system before the payment window opens in December 2006;
  • draws the attention of farmers to the payments calculator on its website, so they can check whether their 2005 payment was reasonable before claiming for 2006.

NAO head Sir John Bourn said: "Foremost among the agency's priorities now must be to determine if the administrative and computer systems for mapping land and processing claims are really up to the job. Until that happens, there is little prospect the problems will be remedied in time to deal with the 2006 claims."

In response, RPA chief executive Tony Cooper said: "We will be considering the content of the report carefully. The problems we have faced over the last year have been widely documented. We are striving to make payments as quickly as possible and apologise to those farmers still awaiting money.

"We are doing our utmost to improve the situation, but it is only fair to warn the industry that the 2006 scheme year is going to be a challenging one."

This article was originally published at Kablenet.

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