Farm Payment Body Slammed In IT Review

The IT costs associated with the Rural Payments Agency (RPA) have been damned in a new independent report.

The RPA distributes more than £2.3 billion every year in Common Agricultural Policy payments to farmers. But a new independent review commissioned by Defra in September 2009 has called for the rationalisation of its computer systems when existing contracts expire next year.

“RPA seems stuck in the past, whereby it was acceptable to focus on payment value and speed, to the cost of quality. Some corners might have needed to be cut in 2006 and 2007 whilst the organisation was turning late payment matters around; it is unacceptable that these same corners are still being cut in 2010,” the review said.

“The review findings conclude that RPA is not well run and currently not fit to take on and succeed with any initiatives for 2013, without significant changes,” it added.

IT Slammed

Regarding the agency’s IT systems, the review was equally damning.

“A significant, legacy weakness is within an unnecessarily complex systems architecture and particularly within the SPS system, RITA. The opportunity exists to procure new systems contracts with key existing ones due to end in 2011,” it said.

It found that the RPA IT system is “very expensive and complex, with a current sunk cost to date of £350 million and it remains an expensive and inflexible resource,” the report found. It also said that the RPA has a high cost per claim of £1.997 in England for 2008/09 compared to just £300 in Scotland.

The review also found that a further £304 million has been spent on additional staff costs, £280 million has been set aside to pay expected EU fines, and £38 million has been lost in overpayments.

The RPA has not got a good track record for a number of years now. A payments crisis in 2005 resulted in farmers facing ruin after they failed to receive their subsidies. And in November last year, it lost backup tapes containing the payment and banking details of 100,000 farmers in the UK.

Meanwhile the Agriculture and Food minister Jim Paice has taken personal charge of reforming the agency and readying it to implement further EU agriculture policy reforms expected in 2013.

“Since the well-publicised problems in implementing the Single Payment Scheme in 2005/06, RPA has made significant improvements, particularly in the speed of making payments to customers. This has been achieved against a backdrop of a poorly specified IT system, which constrained the ability of staff to get the job done, and reducing staff numbers,” said Paice. “However, there is significantly more to be done. The administrative cost per payment is too high and where there are problems, it takes too long for them to be resolved.

“I will not allow this state of affairs to continue,” he added. “We are moving into a new and challenging phase for RPA and the Review highlights how important it is that RPA has the right capability in place to lead the organisation through this period and the right degree of oversight from Defra. I will personally drive forward progress by chairing a new Oversight Board.”

NFU Welcomes Changes

Meanwhile the National Farmer Union (NFU) said that if the reviews recommendations are acted on, it should signal “the beginning of a major push to transform the agency from a below-standard public body to an effective and cost-efficient one.”

“The NFU hopes that its publication and the Government response marks the beginning of getting the RPA to a place where it can hold its head high as an effective and cost-efficient organisation. Absolutely crucial to this, however, is Defra taking responsibility for the agency and ensuring that an effective action plan is drawn up and, more importantly, kept to,” said the NFU.

“I am particularly pleased to see Agriculture Minister Jim Paice take personal responsibility for the RPA’s performance as chairman of the new Oversight Board.,” said NFU President Peter Kendall. “It is something he said he would do ahead of the election and I congratulate him on keeping his promise. I wish him well with what is undoubtedly a challenging task.”

“Experience over the last six years tells me it is a tall order, but Defra and the RPA must get to the bottom of issues affecting wrong claims and incorrect data. Not just so that European fines are avoided in the future, but because of the stress caused to farmers by the constant re-working of their claims and the uncertainty that brings,” he added.

Earlier this month the RPA chief executive, Tony Cooper, announced he is leaving the agency at the end of this month. Cooper joined the agency as Interim Chief Executive in May 2006, announced he is to take early retirement ‘for personal reasons’.