A second progress update on the administration of the single payment scheme by the Rural Payments Agency
Stationery Office, Oct 15, 2009 - Business & Economics - 35 pages
The Rural Payments Agency and DEFRA have shown scant regard to protecting public money in their administration and management of the EU's Single Payment Scheme in England. The IT system does not meet the scheme's needs, the cost of processing claims has continued to increase and the administration of the scheme is not value for money. Payments to farmers have been made earlier, but the concerns over value for money previously raised by the National Audit Office and the Committee of Public Accounts have not been addressed. Under the 2008 scheme over 96 per cent of farmers were paid by mid May 2009, compared to 80 per cent by the same month for the 2006 scheme. However, the cost of the scheme is high and increasing: the average cost per claim is £1,743, an increase of 22 per cent on the 2005 scheme. (It compares to a cost of £285 per claim under the simpler Scottish system.) The report highlights additional administration costs of £304 million as a result of needing more staff than anticipated, £280 million set aside for disallowance and penalties, and the Agency anticipates that a further £43 million of overpayments will be irrecoverable. IT upgrades and maintenance since 2007, costing £130 million, have resulted in heavy customisation with complex software that is expensive and reliant on contractors to maintain. The cost of correcting earlier mistakes in processing claims has amounted to £119 million and overpayments are likely to be between £55 million and £90 million.
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