Select Committee on Agriculture Minutes of Evidence



  I enclose as requested, an update on progress on the regional restructuring programme. This covers all aspects of the programme (ie the creation of the CAP Payments Agency (CAPPA))—about which you will be taking evidence from Johnston McNeill on 7 February—the establishment of a MAFF presence in the Government Offices and the creation of the Rural Development Service.

  It may be helpful to the Committee if we provide these updates on a regular footing. I propose therefore that we submit updates on a quarterly basis. The next updates would be produced in April. Please let me know if this would be helpful to the Committee.



  1.  This quarterly briefing note is intended to update the Committee on recent progress on the restructuring of MAFF's Regional Service Centres. The first section deals with the creation of the new CAP Payments Agency (CAPPA) and the second section deals with other aspects of restructuring (the establishment of a MAFF presence in Government Offices and the creation of the new Rural Development Service to deliver the England Rural Development Programme).


(i)   CAPPA creation

  2.  The aim is that CAPPA will be launched as a single paying agency during 2001-02. At that point the Intervention Board will be wound up and a fully independent coordinating body established. A joint delegation from MAFF, IB and the UK Co-ordinating Body met with the Commission in December to outline the current progress with the design and preparation for CAPPA. The Commission officials were briefed on the decisions taken by Ministers in July 2000 to promote and fund the new Paying Agency and the proposed transition arrangements for making and accounting for CAP payments. The Commission reacted favourably at the meeting, and their written agreement to the proposals has now been sought.

(ii)   Programme progress

  3.  The design work on the creation of CAPPA is progressing well and programme plans are being finalised. The draft IT strategy and high level logical design is being refined as further work on business processes, IT design and the sourcing strategy progresses. Initial design activities in key areas will be completed by April 2001 to enable the IT and detailed requirements to be specified in outline for a high-level Statement of Service Requirement. This will allow procurement to begin of the IT tools, products and services needed to develop CAPPA systems and migrate from existing systems in MAFF and IB.

(iii)   CAPPA senior structure and programme management

  4.  The Minister of State, Joyce Quin, wrote to the Chairman of the Committee on 23 November advising that Johnston McNeill has been appointed as CAPPA's Chief Executive. The News Release that accompanied the letter set out Mr McNeill's previous experience and highlighted the relevant practical experience he brings to the issues that face the CAPPA Programme team. Subsequently the structure of the CAPPA senior management team has been agreed, and the recruitment process is under way. The appointments to the CAPPA senior team will aim to blend internal experience within the operational areas with external skills and experience, particularly in the IT and Finance areas.

  5.  A Director of Business Operations will have overall accountability to the Chief Executive for all Scheme Management and Operational issues and will be supported by operational site heads at each of the CAPPA Processing Centres. A Director of Business Continuity, reporting to the Director of Operations, will ensure that MAFF scheme management and processing on the downsizing sites are transferred across to the CAPPA sites without any disruption—the post will lapse once the transfers have been completed. A Director of Business Development will support the CE in planning the development of the new CAPPA organisation towards its long-term goals.

  6.  In addition, there will be three Director posts, covering Finance, Information Technology and Human Resources, a Legal Adviser and a Head of Audit.

  7.  The CAPPA design envisages four commodity Scheme Management Units (SMUs) and a further SMU dealing with horizontal issues. These will undertake the work currently done by the MAFF National Scheme Management Centres, IB scheme managers and most of the existing functions of MAFF's Headquarters CAP Scheme Management Division. The new Rural Development Service (RDS) will also have centres of expertise on ERDP scheme design and delivery, working closely with the CAPPA SMU. The location of the SMU responsibilities will be as follows:

    Carlisle—livestock schemes.

    Northallerton—land schemes.

    Exeter—Rural Development Regulation schemes.

    Newcastle—multi-commodity trader schemes.

    Reading—horizontal issues (including IACS).

  8.  Additional external and internal expertise has been brought in to the CAPPA Programme Team. An experienced communications expert, working with the COI, is currently leading the work to implement the Restructuring Programme communications strategy in respect of both internal and external communications.

(iv)   Customer communications (including take up of electronic services)

  9.  An external consultation document was issued in July 2000. This principally covered the implications of CAPPA but also sought comments from external stakeholders on other elements of the restructuring programme. The analysis of the exercise is attached to this update at Annex A [not printed]. Consultation is continuing and a regular "Industry Forum" will be established to continue a two-way dialogue with stakeholders.

  10.  Further to the pilot exercise on electronic submission of IACS/AAPS forms, conducted in Anglia Region in Spring 2000, all IACS applicants have been invited to register interest in submitting their IACS 2001 applications electronically. Some 10,000 "expressions of interest" have been received. This is higher than the original, conservative planning assumption.

(v)   Business Continuity

  11.  A Business Continuity Project Board, under the chairmanship of an experienced MAFF Regional Director, has been established with the responsibility for developing strategic plans for managing the detailed work transfer arrangements between sites. The aim will be to minimise disruption for claimants, maintain efficient service delivery and ensure the maintenance of MAFF's paying agency accreditation status during the transition to CAPPA, the creation of the Rural Development Service, and the integration of work with Government Offices. A critical path is being prepared, underpinned by site specific contingency plans in the event that some of the planned work transfers might have to be brought forward ahead of schedule. The identification of risk plays a key role in the management of this project.

(vi)   Risk management

  12.  The Restructuring Programme includes a formal risk identification and management procedure. Risks are reviewed monthly by the Programme and Business Continuity Managers to evaluate the risk, identify mitigating actions and ensure that each risk is "owned" by a named individual with the Programme team. The work of the review team and the changing status of the risks are evaluated by a monthly Restructuring Programme Board, chaired by the Permanent Secretary.

(vii)   NURAD

  13.  The Office of Government Commerce has reviewed the NURAD project and their report is expected imminently. The lessons identified by OGC will be taken into account in developing CAPPA's IT strategy and systems.


  14.  MAFF's updated response to the Committee's tenth report in October explained that the Ministry intended to place a Director and support staff in each of the Government Offices (GOs) for the Regions with effect from 1 April 2001 so as to strengthen MAFF's strategic role within the regional organisation and to foster closer links between the department and the regional stakeholders. The response also explained that the role and responsibilities of the MAFF Directors were being worked out in consultation with the Regional Co-ordination Unit (RCU) based in the DETR and with the GO Regional Directors.

  15.  Since then the MAFF Directors have been appointed to the eight Government Offices and will take up their posts at the beginning of April. The successful candidates represent a wide range of experience within MAFF and elsewhere. A programme of training and briefing activity will take place between now and 1 April, with input from senior policy makers within the Department and from GO Directors from other departments. The role and responsibilities of each of the MAFF Director posts will reflect the needs of the particular region as determined by the Regional Director of the GO, so that further training and development will have to be undertaken whilst in post. A small number of support staff will be identified for transfer to the Government Offices.

  16.  The Department is in regular contact with both the Regional Directors of the GOs and the RCU in respect of planning the transfer of operational work (such as structural fund work and emergencies) as well as setting up the infrastructure for the Directors and support staff.

  17.  It is our intention that MAFF should play a full part in the strategic work of the GOs. There will be close links between MAFF's Directors in the GOs and the Department's new Policy and Corporate Strategy Unit through regular liaison meetings. Direct contact between MAFF policy divisions and the GOs will be encouraged as and when business needs arise.

  18.  MAFF is contributing to the preparation of a Corporate Plan for the work of the GO network, which will define the activities of the GOs and relate these to Departmental PSA targets and other desired outcomes. It is intended that the Corporate Plan will be in place by 1 April 2001. Once this has been adopted, individual GOs will finalise their own business plans which will translate the broad objectives and outcomes of the Corporate Plan into specific activities and targets.


  19.  Our response to the Committee's report explained that a new nationally managed but regionally based service within MAFF's Rural Development and Environment Group (the Rural Development Service (RDS)) would be set up as part of the regional restructuring process to deal primarily with the implementation of the ERDP. It will bring together the technical expertise of the FRCA with the administrative experience of the RSCs in order to provide an efficient service for the regions.

  20.  The Head of the RDS was appointed in October 2000. The appointee (Sarah Nason) is currently the Chief Executive of the FRCA and she has already been heavily involved in the discussions and decision-making processes relating to the creation of the RDS.

  21.  The RDS will be managed on the basis of the boundaries of the Government Offices for the Regions. The regions will be headed by RDS offices located in Crewe, Worcester, Bristol, Reading, Cambridge, Nottingham, Leeds and Newcastle. Headquarters and a finance unit will be located in London. Four Business Process Units, which will take the lead responsibility for individual schemes, will be located in Bristol, Crewe, Nottingham and Worcester. Corporate responsibilities such as personnel, training and purchasing have been allocated to regional offices.

  22.  Decisions on the senior management structure of the RDS have been made and eight Regional Managers and the Business Processes Director were appointed in early January. The appointees all have experience of the work done by the RSCs or the FRCA. They will take up their appointments formally on 1 April. Work on the selection of administrative staff for RDS regional offices is being taken forward in parallel with staffing decisions for CAPPA, in consultation with the DTUS. Technical staff currently in FRCA will transfer to RDS on 1 April.

  23.  As a foundation for the future work of the RSD, a number of teams from the FRCA, RSCs and policy divisions have been assembled to review the administrative and technical processes for all of the main schemes under the ERDP. They will identify current best practice in RSCs and FRCA, amend existing Agreed Working Practices and desk instructions to take account in the changes in organisational structure, and draft Service Level Agreements defining the role of each of the organisations involved. They will also prepare implementation plans for changes to processes to include risk management and training requirements.

  24.  Whilst CAPPA systems are being developed, the RDS will have delegated authority to authorise payments to agreement holders under ERDP and other schemes. This means that the RDS will handle the whole process of preparing agreements and handling claims under the oversight of CAPPA's Scheme Management Unit, with CAPPA taking responsibility for compliance monitoring. Longer term arrangements will be determined as the design of CAPPA is taken forward.

January 2001

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