The EU Single Payment Scheme replaced 11 previous subsidies to farmers based on agricultural production with one payment for land management. The European Commission gave some discretion to Member States over how to implement the scheme, and the Rural Payments Agency, which is responsible for administering the scheme in England, opted for the dynamic hybrid model which incorporates elements of previous entitlement and new regionalised area payments based on a flat rate per hectare. The Agency and Defra encountered severe problems in the implementation of the scheme in England, and by the end of March 2006, it had paid farmers only 15 per cent of the £1,515 million due, compared with its target of 96 per cent. This caused significant hardship to farmers and taxpayers will have to pay extra implementation costs. Defra has had to secure an extra £300 million to meet the potential cost of disallowance of expenditure by the European Commission arising on the problems in administering the scheme. Following on from a NAO report on this topic (HCP 1631, session 2005-06; ISBN 9780102943399 published in October 2006, as well as a report from the Environment, Food and Rural Affairs Select Committee (HCP 107-I, session 2006-07, ISBN 9780215033383) published in March 2007, this report by the Public Accounts Committee examines the impact of the payment delays on the farming sector, why implementation failed, the role of Defra and the changes being put in place to rectify the mistakes made. Lessons highlighted include: the Department made the scheme unnecessarily complex by choosing to adopt the most demanding implementation option; the Rural Payments Agency shed too many experienced staff at a key time; implementation of the project started before the scheme specification was finalised; and the IT system was introduced without adequate testing, a failure often seen with government IT projects.

This report sets out the results of investigation into complaints, using two representative case studies, about the administration of the 2005 Single Payment Scheme in England, including the Rural Land Register. The Ombudsman made five general findings of maladministration: the Rural Payments Agency did not meet the legal obligation to determine entitlements by 31 December 2005; Defra & RPA failed to heed the warning information of their own systems and from the Office of Government Commerce; RPA's and Defra's public statements in early 2006 failed to recognise the internal concerns they had; on 30 January 2006 Defra officials and Ministers considered RPA's position - the best case scenario was 70% of payments to be made by the end of March 2006 and they decided to tell Parliament that RPA would make the 'bulk' of payments by the end of March 2006; RPA was the only body ina position to estimate how much more digital mapping work it would have and its planning for the mapping process fell far short of getting it right. In short the Ombudman's principles of getting it right, being open and accountable and being customer focussed were not adhered to

Government failure is affecting everyone. The single mum worried sick by a tax credit demand from HMRC to 'repay' thousands of pounds she never received; the family whose holiday was ruined because the Passport Office couldn't issue passports in time; the school that couldn't open at the start of term because CRB checks were being carried out by an organisation in meltdown; the farmers led to bankruptcy and even suicide by a Kafkaesque system for administering farm payments; and rail operators facing an uncertain future because the Department for Transport inadvertently landed the whole rail franchising system in chaos. Why is government getting it so wrong? Richard Bacon and Christopher Hope delve into the astonishing world of cock-ups and catastrophes and ponder why those at the top continue to fall short.

The EU Single Payment Scheme replaced 11 previous subsidies to farmers based on agricultural production with one payment for land management. The European Commission gave some discretion to Member States over how to implement the scheme, and the Rural Payments Agency (RPA), which is responsible for administering the scheme in England, opted for the dynamic hybrid model which incorporates elements of previous entitlement and new regionalised area payments based on a flat rate per hectare. A NAO report (HCP 1631, session 2005-06, ISBN 9780102943399), published in October 2006, found that the RPA underestimated the risks and complexities involved in implementing the hybrid model, and the IT system was never tested as a whole before the scheme was introduced. It failed to adequately pilot land registration, and underestimated the amount of work involved in both mapping the land and processing each claim, having to rely on often inexperienced temporary and agency staff to clear the backlog. The difficulties were not picked up early enough, neither by the RPA nor Defra, for corrective action to be taken in time, resulting in the RPA's failure to meet its own payment targets. Delayed payments have cost farmers money in additional interest and bank charges, and caused distress to a significant minority of farmers, particularly hill farmers. The cost of implementing the scheme was budgeted at £76 million but rose to £122 million by March 2006, with further cost increases likely. Following on from a previous Committee report on the RPA (HCP 840, session 2005-06, ISBN 9780215027115), published in January 2006 and in light of the NAO findings, this report focuses on aspects of policy decision-making and political accountability raised by the problems with the Single Payment Scheme. The Committee concludes the Scheme has been a catastrophe for some farmers and a serious and embarrassing failure for Defra and the RPA, and Defra's fundamental failure to carry out one of its core tasks (that is to pay farmers their financial entitlements on time) differentiates this issue from the myriad of botched Government IT projects. There is a need for greater expertise within government in the delivery of such complex IT projects, and the report also criticises the quality of advice given by the Office of Government Commerce and the IT system designed by Accenture as the principal IT contractor. Defra determined the policies which it required the RPA to implement and Defra leadership was at fault for accepting RPA statements that implementing the complex hybrid model to deadline was "do-able". The Committee argues that responsibility for this failure goes wider than the dismissal of the RPA chief executive, and ministers and senior Defra officials should also be held to account, particularly Margaret Beckett (the then Defra Secretary of State), Sir Brian Bender, (the former Defra Permanent Secretary) and Andy Lebrecht (the Director General for Sustainable Farming, Food and Fisheries). It concludes that a departmental failure as serious as this should result in the removal from office of those responsible for faulty policy design and implementation, and it recommends that new guidance on Ministerial accountability is needed in the event of such serious departmental failure.

The Parliamentary Ombudsman, Ann Abraham, has upheld complaints from nine farmers about the Government's handling of a subsidy scheme which caused them to miss out on payments they were entitled to. The farmers complained to the Ombudsman about the administration of the Single Payment Scheme (SPS) in 2005 and 2006 by the Rural Payments Agency (RPA), part of the Department for Environment, Food and Rural Affairs (Defra), The SPS is the latest generation of the EU schemes intended, among other policy aims, to give farmers direct income support. The farmers complained about RPA's handling of their claims to the SPS on a number of counts, including that they provided poor quality and sometimes ambiguous guidance on how to make a claim; failed to return applicants' telephone calls when this had been promised; misdirected applicants about the status of their cases; delayed letting applicants know that they would not be paid; and did not explain their decisions properly. RPA also failed to consider the effects their errors and omissions had on the farmers when they came to complain. In one case, a farmer misunderstood the new form and only claimed a subsidy for the year 2005. She did not activate her claim and subsequently did not receive a payment. No one questioned her mistake, even though RPA knew this was a common error by farmers. Losing a payment of over £13,000 left the farmer unable to pay all her bills and reliant on her partner's goodwill. She found out her mistake almost a year after submitting her claim, when she asked what had happened to her payment. Another farmer also misunderstood the new form and guidance and did not activate his claim. He was then led to believe by the RPA that he would be paid, which was not the case. He and his wife found the confusion and uncertainty of their circumstances particularly stressful. The farmer had to increase his overdraft, sell land and take on extra part time work in order to meet the financial shortfall. As a result of the Ombudsman's investigation the farmers will each receive a written apology from the Permanent Secretary of Defra and compensation of £500 for the inconvenience, distress and frustration that they experienced. They will also receive individual payments to put right the financial impact of RPA's failures. In addition, the Ombudsman has also asked RPA to provide an action plan setting out the changes they have made to prevent other farmers experiencing the same problems in future.

Drawing on 20 years of experience as Comptroller and Auditor General, and head of the United Kingdom National Audit Office, Public Sector Auditing: Is it Value for Money? is Sir John Bourn’s own account of the role and influence value for money auditing has in holding governments to account and in helping public bodies improve the ways in which they deliver services. Key features include: In-depth case studies from UK, US, Canada, China, India and Australia; Detailed analysis of complex areas of public expenditure such as health, education, privatisation, regulation, defence and IT; Examples of how auditing can promote positive outcomes rather than negative post mortems. This book is relevant for people working in both the public and private sectors, and should be essential reading for the staff of public sector audit institutions around the world, as well as commercial accountancy firms and students of accountancy, politics, economics and public management.

This NAO report examines the state of financial management in the European Union. It is divided into three parts, with appendices. Part one, looks at the background; Part two, presents key findings in respect of the main expenditure areas, irregularities and possible fraud; Part three, looks at improving the financial management. Amongst the findings and recommendations of the National Audit Office are: for 2005, the European Union's expenditure totalled £71.1 billion, with a revenue of £72.3 billion, and the UK's net contribution coming to £2.5 billion, comprising payments of £8.3 billion, with a £3.5 billion abatement. Against this background of financial contribution, was a report from the European Court of Auditors, in October 2006, which found the accounts of the European Union did reflect the revenue and expenditure for the year, but had noted some errors in relation to balance sheet items, which led the Court not to issue a Statement of Assurance, which confirms the legality and regularity of the European Community's expenditure. For the NAO, the main findings included the views of the European Court of Auditors, that financial management had been strengthened and consolidated. Further anti-fraud measures, as introduced by OLAF (the European Union's Anti-Fraud Office) had also been strengthened, and that European Union expenditure was not subject to excessive fraud. The NAO sees the success of gaining a Statement of Assurance, as linked to the implementation of the European Commission's action plan of simplifying the rules and regulations governing European Union programmes (as noted in the HCP 498, session 2004-05, ISBN 0215023870). The Court of Auditor's also noted some weaknesses in the UK's management and control of structural measures programmes, and the NAO states that relevant UK authorities should ensure their risk management arrangements focus on the need for proper control and management of European Union funds.