Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20-39)



  20. I know what the procedure is, can you just clarify why nobody spotted that the barn was already there?
  (Mr MacKinnon) All he had made was an application in which he needed to put forward essentially a business case for the construction into which he was entering. So you could say that the application was approved in principle but no monies would be paid out unless he made an application for those monies, which he did not do. It is for speculation whether the reason that he did not make his application subsequently was the inspections and the investigations which were going on but, as a matter of fact, he did not make an application for monies to be paid.

  21. The department agreed in principle to pay for a barn which was already constructed?
  (Mr Bender) No, the department's controls had not been triggered because he had not submitted a claim. We had registered his application but he had not submitted a claim.

  22. He had submitted an application which you had accepted?
  (Mr Bender) We had accepted.

  23. You accepted the application. Had he submitted a formal application would you have sent somebody out there to check whether or not the barn existed?
  (Mr Bender) There were inspections made. I cannot say that in every case, and I am therefore speculating—

  24. There had already been inspections made of this property, had there not, and nobody had spotted that the barn was already there?
  (Mr Bender) At that stage, no, nobody had spotted that.

  25. It is a difficult thing to spot, of course.
  (Mr Bender) What they had said was that there was a business case for constructing—

  26. Are you telling me then that it would not normally be the procedure to check that any barn you were giving money for actually existed?
  (Mr Bender) It is now the procedure, Mr Davidson.

  27. So up and down the country there could very well be barns that already existed for which you have paid?
  (Mr McNeill) When the official arrived to discuss the application with Mr Bowden he asked to see the site where the barn would be sited. At that time Mr Bowden indicated that he had not taken a decision yet as to where the barn was to be placed. Had he proceeded with his application, at that stage it is possible the controls would have been triggered, would likely have been triggered, and then an inspector would have looked for a new barn on the site of the property.

  28. Well, okay, I do not think we are going to get much more on that. Can I clarify this question of the confidence in the inspections. The briefing we had indicated that various routine inspections in 1994 and 1995 did not find any irregularities because it was difficult to identify the crops being grown and harvested since flax and linseed are similar. Cows and sheep are similar but you would normally expect a trained representative of the Ministry of Agriculture to be able to identify the difference between different crops, would you not? This was not an inspector for the Benefits Agency, was it, it was presumably somebody you could reasonably expect to know which crop was which? Does that seem fair?
  (Mr McNeill) Chairman, the inspectorate was there to identify that flax was being grown on the fields. They were satisfied that, one, it was being grown and after harvest there had been flax on the fields and that met their requirements. It is going back to this issue of whole farm inspection. They were not there to inspect was he growing the crops he said on a multiple range of issues, they were looking at a specific scheme. The situation was that assessment was correct. In fact the courts relied upon the judgment of the two inspectors and accepted their word that flax was being grown and that formed the basis of the prosecution on the basis that he had claimed that other crops were being grown on the fields. In technical terms the assessment by the inspectorate was considered valid.

  29. Okay. So we trust the assessment of the inspectors about what crops were being grown. This is the same department which accepted Ordnance Survey references in the Atlantic as being property in Devon, is it not? I am sure you can understand our perplexity about all this. There seems to be so much confusion here. I understand your point that somebody did not need to provide Ordnance Survey references but when they did you would have thought that somebody would have checked. The parallel I draw is the same with the Benefits Agency. If you claim for a house, four children, a wife and all the rest of it, you are required generally at some stage to provide some evidence that this house and, indeed, you yourself do exist, so why do you not do that?
  (Mr Bender) Can I try and answer that. The error in this case was a systemic one, following the earlier questioning, because there was not a check between A and B. The map references issue, as Mr McNeill said, enabled the inspector simply to find the fields in question, that was all he had to do. He was not asked to identify them.

  30. Can I clarify how did it enable him to find the fields in question when the references were in Iceland, Greenland, the North Sea, various locations. If the man had managed to find the fields through those map references then he would have been worthy of promotion.
  (Mr Bender) The final four digits of the map were, as I understand it, correct. It is when you put the whole reference together on the Ordnance Survey and then ask where those fields would be. Can I repeat, the issue is not the competence of the inspector, he was not tasked properly. That is why the issue did not come to light. He was not asked, taking your analogy, to find whether this person had four children or not, he was simply asked to identify the fields and find what they were growing. He did not cross check and that was the error in the system that allowed the fraud to continue.

  31. Can I just clarify then whether or not anybody at all bears any responsibility for this on a personal level or is it just the system?
  (Mr Bender) The answer I would give to that is that as Accounting Officers Mr McNeill and I are responsible for the systems which exist and existed. I do not think there was human error down the line in terms of individuals, the systems were set up by the Ministry of Agriculture, and by the Intervention Board and they were therefore accounted for by the Accounting Officers.

  32. Are you on any performance bonus at all?
  (Mr Bender) I am. Well, I will tell you at the end of the year but, in principle, yes.

  33. During this period?
  (Mr Bender) If you are personalising it.

  34. I am.
  (Mr Bender) In 1996 I was in the European Secretariat of the Cabinet Office. I am the Accounting Officer and, as you well know, I am accountable for this issue.

  35. Can you clarify for me whether or not anybody who was involved with this at any stage was on some bonus system and whether or not they got a full bonus or whether this was just ignored?
  (Mr Bender) I cannot answer that.[2]

  36. Maybe you can give us a note about that, I think we would be interested. Can I just clarify whether or not I would be correct in assuming because you are dealing with farmers there is an assumption of innocence, and an assumption that anything they say is to be taken as correct whereas I often feel that with the Benefits Agency there is an assumption of guilt. Does that seem reasonable to you?
  (Mr Bender) Hugh, do you want to comment?
  (Mr MacKinnon) I think the answer is certainly no, there is no assumption of innocence or guilt. What I can say is if we get information or if there is information on the face of any application or claim for money that seems to suggest something suspicious then we will pursue it. I think I can say that was the case for the Ministry's Regional Service Centres and for the Intervention Board.

  37. Okay. There is an issue about the difficulty of completing the forms. Do you think your forms are any more difficult than the Benefits Agency forms or the DLA forms?
  (Mr MacKinnon) I am no expert on those forms. I know something of our own forms.

  38. If you cannot compare then I will move on. Have you ever checked how difficult these forms are? Have you thought of seeking professional advice? Farmers are always moaning—farmers are always moaning anyway—about the difficulties of the forms. You have never taken advice as to whether or not they are more difficult than other Government forms?
  (Mr MacKinnon) There are two areas where we do take advice and compare. One is in relation to what other Member States do and the other is that as we are trying to get the IACS system on line, we are taking professional advice on how to have it in electronic form as simple as possible.

  39. Interesting answer but it does not answer the question, with respect. I was asking how they compared with other Government departments?
  (Mr McNeill) There are some groupings in which we use the forms and pilot them and take the views and try to identify how we can improve the forms.

2   Ev 26, Appendix 1. Back

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