Select Committee on Agriculture Minutes of Evidence


Claims paid by MAFF to farmers in 1999

Number of Claims
Total Expenditure(1)Average payment
£m £
Arable Area Payments44,706 91620,489
Sheep Annual Premium33,231 1364,093
Beef Special Premium(2)113,035 1271,124
Suckler Cow Premium21,924 894,059
Total212,976 1,268

1 Excluding agrimonetary payments but, for BSP and SCP, including extensification payments.
2 Farmers can make up to 12 claims for Beef Special Premium in a calendar year.

  21.  As a result ofthe various checks, a number of claims are reduced or rejected and, where appropriate, the penalties in the IACS legislation and/or domestic legislation are applied. Farmers who wish to query a decision on a claim can take it up with their Regional Service Centre. It is then looked at again by senior RSC staff, who consult the NSMC, the Policy Division and lawyers on difficult cases. If the decision is maintained and the farmer is still not satisfied, he can ask his Member of Parliament to raise it with the Minister. The Minister's decision can be challenged through the judicial review process, which may involve a reference to the European Court of Justice to determine points of EU law. Some in the industry have expressed concern that the current procedures are entirely internal to MAFF and would like to see a more independent element brought into the process. This was one of the recommendations of the IACS and Inspections Red Tape working group set up by the Minister and the NFU President, Ben Gill, in September last year, as part of a wider review of regulatory burdens on farmers. The Minister has indicated his willingness to consult farmers on possible options for changing the appeals arrangements which might be of benefit to them and a consultation document will be issued before the end of this year. The Minister accepted all the working group's recommendations and progress on implementing a number of them is described in paragraphs 27 to 32.

  22.  There are also procedures for dealing with complaints. If a farmer thinks that his claim has not been handled properly, he can refer his case to a MAFF's Service Standards Division and/or appeal through his Member of Parliament to the Parliamentary Commssioner for Administration.

BEST PRACTICE & BENCHMARKING

  23.  Scheme Manager Visits (formerly known as Best Practice Visits) ensure correct operation of the scheme. At the end of each annual programme of visits to RSCs, the National Scheme Management Centre issues a report of its findings and offers guidance based on aspects of scheme implementation which reflect Best Practice. The Regional Organisation is also developing benchmarking through "process mapping" its operations. This approach involves drawing up a flow chart that shows all the steps involved in a process, and who is responsible for each one. As work progresses in this area in each of the Regional Service Centres, different ways of managing processes are being identified and compared with the objective of making improvements.

  24.  MAFF's Regional Organisation has also started to use the EFQM Excellence Model. This work is being co-ordinated by a trained facilitator, who has experience of using the model with another Government Department.

  Different approaches to the self-assessment process are being piloted and staff at four of the nine Regional Service Centres are involved. The process has identified areas where improvements may be made. These are incorporated in action plans. Action points relate to present business processes and will be used both for planning business continuity and in taking forward work on the new CAP Paying Agency.

  25.  Efforts are also made to compare MAFF's scheme administration with that of Paying Agencies in other Member States. In the last year, there have been exchanges with (or visits to) Austria, Denmark and Sweden. In addition, the Head of CAP Scheme Management Division attends the twice-yearly Conferences of Directors of EU Paying Agencies. These conferences are attended by representatives of all the Member States, as well as the Commission (the Directorate General for Agriculture and the Anti-Fraud Office) the Court of Auditors, and the Secretariat to the Council of Ministers. Topics covered at the last meeting, held in May 2000, included:

    —  Commission plans for an agricultural database;

    —  debt management;

    —  the role of the Anti-Fraud Office (OLAF);

    —  the simplification of Community legislation; and

    —  the work of the "Panta Rhei" Group.

  26.  The Panta Rhei Group meets every six months to discuss IT developments and benchmarking. Topics covered at the meting in April 2000 included the management of IT developments, electronic communication, and implementing Agenda 2000. The October meeting of the group considered IT strategy and organisation, and the outcome of the pilot work on benchmarking between Paying Agencies. MAFF RSC staff attended the benchmarking workshops at the April meeting, which are comparing procedures for customer and staff surveys and for operating some of the livestock schemes.

PLANS FOR THE FUTURE

  27.  MAFF is currently taking forward plans for a number of developments designed both to improve its scheme administration and to provide a better service to farmers. These developments, which include:

    —  electronic forms;

    —  a Geographic Information System (GIS);

    —  combined cattle inspections; and

    —  simplification of the IACS rules.

are in line with the recommendations of the IACS and Inspections Working Group. Most importantly, the Ministry and the Intervention Board are now actively working together to create the new CAP Paying Agency (CAPPA) for which funds have been allocated in the 2000 Spending Review.

  28.  Electronic versions of the IACS forms were successfully piloted in the Anglia Region earlier this year. 15 per cent of the 8,000 farmers who submit claims to Cambridge RSC indicated their willingness to participate. Just over 200 of them were selected, of whom 164 were able to lodge their IACS declarations electronically. All these applications were successfully loaded into the RSC's processing systems at the first attempt, whereas the success rate from paper forms can be as low as 60 per cent. Half of those who submitted applications were interviewed: 70 per cent said that they intended to submit claims electronically in the future and another 18 per cent would do so if the system was improved. These farmers had found the e-forms easy to use and they particularly appreciated the ways in which these "intelligent" forms had prevented them from making some at least of the mistakes which can deprive them of all or part of their subsidy. As part of the Action Plan for Farming announced by the Prime Minister on 30 March, MAFF is now working to make electronic IACS forms available to all farmers in England next year.

  29.  The Ministry's plans to introduce a Geographic Information System (GIS) pre-dated the recent changes to the IACS legislation and are proceeding well. The GIS will be based on the digitised maps provided by Ordnance Survey and will replace the alphanumeric database currently in use.

  30.  A toolkit designed to provide mapping facilities for RSCs, eg for producing maps needed for inspections, is under development at Reading RSC and a procurement exercise to select a contractor to carry out the data capture and digitisation of 1.7 million agricultural parcels in England is expected to be launched shortly. The digitisation process, which will provide a firm baseline for farmers' IACS declarations and subsidy claims in the future, will be carried out in consultation with the industry. A map showing the GIS data will be sent to each application on completion of the digitisation process. This map should make the completion of Area Aid applications more efficient and reduce the number of errors made. The GIS will also allow the inspection process to be improved. When fully operational, it should be possible to streamline validation processes, provide effective cross checking and reduce validation times. In the longer term the GIS will afford the opportunity to streamline electronic forms further by providing a more interactive and transparent means of making claims spatially.

  31.  Work being done to reduce the inspection burden on farms is two-fold. MAFF is currently working on the Combined Bovine Risk Analysis (CoBRA) project which aims to combine the various inspections for which it is responsible under the beef subsidy schemes and cattle identification rules. Not only will this allow us to reduce the number of separate farm visits, but the animals and records subjected to inspection will be looked at in totality. This will enable the inspecting officer to resolve cross-scheme issues at the time of inspection and reduce the need for repeat visits to inspect individual claims made under the various schemes. Furthermore MAFF is looking at options for rationalising and co-ordinating the on-farm inspections carried out by other authorities.

  32.  All these developments should make it easier for farmers to submit valid claims and for MAFF's Regional Organisation to meet its efficiency targets. But more progress could be made if the IACS rules were simplified. In June, the Minister and his French counterpart agreed on a number of ways in which the rules could be simplified without undermining the effectiveness of IACS as an anti-fraud mechanism. The French Government, which has made CAP simplification a major theme of its Presidency of the EU, canvassed the views of other Member States and the Commission on the measures proposed in the joint UK-French note. This initiative culminated in a presentation by Commissioner Fischler, at the October Agriculture Council, of the priority areas for simplification and in agreement by Agriculture Ministers that discussions on these changes should be taken forward rapidly. The priorities for change include both the rules for selecting claims under the cattle schemes for inspection, which will facilitate combined inspections, and for the inclusion of hedges and other field margins in claims for arable area payments.

  33.  The Minister announced on 24 July that a new CAP Payments Agency would be created by merging the paying agency functions of the MAFF and the Intervention Board. The Ministry secured a ring-fenced allocation of £130 million in SR2000 to create the new agency over the three years commencing April 2001. It will be situated at five sites around England: Carlisle, Newcastle, Northallerton and Exeter, with its headquarters at Reading.

  34.  The new paying agency will provide a step change in the delivery of CAP services to farmers and traders. It will provide high quality customer service, harnessing the benefits of new technology. Farmers and traders will benefit from a reduction in "red tape" and more efficient and rapid processing of payments. The Ministry is committed in its Public Service Agreement (covering the period 2001-04) to achieve 95 per cent electronic service delivery capability by March 2004. Customers of the new paying agency will be able to submit their claims for CAP payments electronically over the Internet. "Intelligent" electronic claim forms will be easier to complete, guiding customers through the form filling process. There will be immediate online validation of claims helping to prevent simple errors and omissions. This will allow claimants to be more confident that they have completed their applications correctly, and greatly reduce the burden of form filling. It should also help to ensure that claims can be paid at the beginning of the EU payment window.

  35.  The introduction of electronic claim submission will be staged, and the new arrangements will be brought online one scheme at a time. The first will be the electronic version of the 2001 IACS form which the Ministry aims to roll out across England next year. It is recognised that many farmers are apprehensive about using new technology to claim for valuable subsidies. The Ministry and the Intervention Board will continue to work closely with their customers to help them reap the benefits that electronic service delivery offers. However, the facility to submit paper claim forms will remain for the foreseeable future. In addition, the Minister has made a commitment to maintain arrangements for face-to-face local contacts with farmers, at least until the new IT systems are fully operational and everyone has easy local access to the Internet.

  36.  The new paying agency will also provide significant benefits for taxpayers. One of the Ministry's targets in the period 2001-04 will be to achieve a ten per cent reduction in the unit costs of administering CAP payments by March 2004. There will be further savings in subsequent years once the new agency is fully established. Creating the new agency will be a large and complex project and the Ministry and IB are fully aware of the inherent risks associated with it. External project management expertise has been brought in to give the project strong leadership and direction. A comprehensive risk management strategy has been implemented in line with the Turnbull Report.

  37.  The Ministry is not alone in modernising its administration of CAP payments. Similar steps are being taken in a number of other Member States, most notably in the Netherlands and Sweden. Attendance at the Paying Agency Director's Conference and the Panta Rhei Group, together with bilateral visits and exchanges, and meetings in Brussels to consider changes to the IACS legislation provide opportunities to exchange ideas on how to modernise and simplify CAP scheme administration.

CONCLUSION

  38.  Since its introduction in 1993, the Ministry's implementation of the Integrated Administration and Control systems has evolved continually to take account of changes to the EU legislation underpinning the agricultural support schemes, most recently the changes introduced under the Agency 2000 reform. In that time, MAFF has striven to balance the requirements for tight control over the disbursement of public funds with the needs of the farming industry through effective and efficient scheme administration. The new CAP paying agency offers the prospect of delivering significant improvements for both farmers and taxpayers.

November 2000




 
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