Select Committee on Public Accounts Fifth Report


The Committee of Public Accounts has agreed to the following Report:

The 2001 Outbreak of Foot and Mouth Disease


  1. Foot and mouth disease was discovered at an abattoir in Essex on 19 February 2001 and confirmed the following day. The disease spread quickly and in total there were outbreaks in 44 counties and districts and over 2,000 premises were infected. By the time the disease had been eradicated in September 2001, more than 6 million animals had been slaughtered: over 4 million for disease control purposes; and over 2 million for welfare reasons. The nature and scale of the outbreak were unprecedented, partly because the disease was already widely seeded across the country by the time the first case was detected.
  2. The direct cost to the public sector of the outbreak is estimated at over £3 billion (Figure 1).

Figure 1: Cost to the public sector of the 2001 outbreak of foot and mouth disease
£ million
Compensation and other payments to farmers for animals slaughtered
Direct costs of measures to deal with the outbreak
Support measures for businesses affected
Cost of government departments' staff time

Source: National Audit Office analysis of Departmental figures

  1. The cost to the private sector is estimated at over £5 billion. Tourism and supporting industries suffered the largest financial impact, losing revenues of between £4.5 billion and £5.4 billion. Agriculture, the food chain and supporting services incurred net costs after compensation of £0.6 billion.
  1. On the basis of a Report by the Comptroller and Auditor General[1], the Committee took evidence from the Department for Environment, Food and Rural Affairs on three main issues: contingency planning for a possible outbreak of foot and mouth disease; the handling of the outbreak; and controlling the costs of the outbreak.
  1. Our key conclusions are:
  • The Department based its contingency plans for foot and mouth disease on the assumption that up to ten premises would be infected. In the event, however, at least 57 premises were infected by the time the first case was diagnosed. The plans did not consider any other scenarios, such as a worst case scenario or one based on the last big outbreak in 1967-68. Future plans should be based on an analysis of risks associated with foot and mouth disease and should incorporate a range of assumptions about the nature, size and spread of an outbreak, including a worst case scenario.
  • The Department's contingency plans were directed solely at the agriculture industry. Yet the tourism industry suffered much more than any sector and incurred some £5 billion of losses. Contingency plans should not only address farming but also the difficulties likely to be experienced by other industries. Stakeholders in affected industries should be fully consulted about contingency plans; and should participate in the simulation exercises carried out to test them.
  • Emergency vaccination was not used during the 2001 outbreak. The Government has announced that the option of vaccination would nevertheless form part of any future strategy for the control of foot and mouth disease. We cannot have a situation again where there is no clear-cut policy on whether and when vaccination is used. The Department's plans on vaccination should be clear and set out the circumstances and factors that would determine when vaccination would be adopted. The plans should be made known and explained to all relevant parties, including farmers, vets, and representatives of the food industry.
  • The Department could have done many things differently. For example, it should have imposed a national movement ban from the first day; it should have kept the countryside open and not allowed the blanket closure of footpaths for such a long time; it should have brought senior administrators in earlier to take charge of local disease control; and it should have not disposed of carcasses on mass funeral pyres; but we recognise that we say these things with the benefit of hindsight. These and other lessons need to be incorporated in the Department's plans and processes for any future outbreak of infectious animal disease. The armed services were called in three weeks after the start of the outbreak and made an important contribution to eradicating the disease. One of the lessons from the 1967-68 outbreak was that the earlier the military can be called in the greater their impact will be. The lessons from the value of calling in the armed forces early should have been remembered from the 1967-68 outbreak. But it seems to have fallen out of the collective memory of the Department. Working closely with the Ministry of Defence, the Department should define the military's role and identify the tasks it would carry out in any future outbreak. There should be clear trigger points as to when military support is requested and brought into effect.
  • Farmers received nearly £1,400 million in compensation and other payments for their slaughtered animals. The assessed values of animals rose threefold during the crisis, and with no functioning markets, the Department lacked a clear frame of reference to assess or influence the valuations against which compensation was paid. The Department allowed potential recipients of compensation to select and appoint the valuers. In future, systems of compensation to farmers for slaughtered animals need to give firmer control over the amounts paid. The Department needs better benchmarks for determining the rates paid for animals when markets are suspended; and it should not allow potential recipients of compensation to select and appoint the valuers.
  • The total bill for measures to deal with the epidemic is expected to reach nearly £1,300 million by the time all claims are settled. The Department was in a weak negotiating position and had to pay a premium to get things done at maximum possible speed. The Department should negotiate pre-arranged rates and fees for goods and services, which could be brought quickly into use in the event of a future outbreak. Claw-back arrangements should be in place to prevent firms making excessive profits at the Department's expense. A list of approved contractors should be drawn up, and kept up to date, and the capabilities of firms to carry out contracted tasks should be tested in simulation exercises.
  • The prevention of illegal meat imports is a key measure in avoiding foot and mouth disease. The trade in imported livestock is also high risk and requires special controls. The Department should ensure that the measures adopted in the United Kingdom are at least the equal of those elsewhere in the developed world, including Australia, New Zealand and the United States.
  • An internal Departmental Report of February 1999, the Drummond Report, found considerable variations in the State Veterinary Service's readiness to deal with outbreaks of diseases, including foot and mouth. The Report expressed concern that a rapid spread of foot and mouth disease could quickly overwhelm the State Veterinary Service's resources, particularly if a number of separate outbreaks occurred at the same time. The Department had responded to many of the Report's findings but had not resolved a number of key issues, including the slaughter and disposal of carcasses, training of staff, and updating of existing contingency plans. Of 34 recommendations, 27 had been taken forward. However, it was the Department which commissioned the Report. In future, if the Department commissions a report of vital importance affecting animal health they should implement its recommendations and not procrastinate. Implementation of the Report was incomplete because there had been other major priorities for the State Veterinary Service, most importantly the public health issues surrounding Bovine Spongiform Encephalopathy. At the time the risks from foot and mouth disease were considered to be low. The outbreak of classical swine fever in the summer of 2000 had also interrupted implementation of the Report, although it did give a practical opportunity to put some of the Department's ideas into practice.
  • In summary, many of the Department's difficulties in handling the outbreak reflect a narrow outlook and lack of contextual awareness. The tendency to focus on farming interests, important as these are, needs to be complemented by greater recognition of wider rural and national concerns. The Department also needs to build stronger and more confident partnerships with other relevant bodies in both the public and private sectors, so as to make better use of their expertise and resources. Longstanding attitudes are in need of reform, and the Department's new development programme for senior managers will need to be radical if the necessary change of outlook is to be achieved.
  1. Our detailed conclusions and recommendations are:

On contingency planning for a possible outbreak of foot and mouth disease

(i)  If a serious outbreak of animal disease is to be brought quickly under control, effective co-operation is needed, not only among government bodies but also among those closely affected on the ground. But the Department did not involve stakeholders in the preparation of its contingency plans. When foot and mouth disease broke out in 2001, key organisations such as the National Farmers' Union, the Local Government Association and representatives of livestock interests either believed that the Department had no plans for an outbreak of foot and mouth disease or had not seen them. The Department should bring all interested parties on board and discuss its contingency plans with central and local government, farmers and other major stakeholders.

(ii)  Failure by a farmer to report the disease after it had appeared in his pigs contributed to the widespread seeding of the disease and the unprecedented scale of the outbreak. The great majority of farmers take their responsibilities seriously, but there can be no guarantee that all will comply. Contingency plans must therefore take account of the risk of an outbreak not being reported promptly by the farmer concerned.

(iii)  Identification of foot and mouth disease was difficult in the 2001 outbreak, partly because the disease is hard to detect in sheep, the main animals affected, but also because some farmers and vets did not know what symptoms to look out for. The Department should aim for a high degree of awareness of animal disease in the farming industry. It should work with other organisations, including those in the voluntary sector, to educate farmers and vets about diseases they might not have encountered, but which nevertheless present a real risk.

(iv)  The Department is now revising its contingency plans for foot and mouth disease. But foot and mouth is only one of a range of serious animal health diseases and the Department will need to look at all its contingency plans afresh in the light of what happened in 2001.

On handling the outbreak

(v)  A severe shortage of vets prevented the Department from getting on top of the disease in the crucial early weeks of the crisis. The State Veterinary Service cannot be permanently staffed to meet the demands it would face during a serious outbreak of animal disease. The Department needs to decide what measures are needed to increase veterinary resources quickly at the start of any crisis. It should also clarify the basis on which vets recruited from outside would be paid and the terms and conditions on which they would be employed.

(vi)  The Department's computerised database for managing the outbreak—the Disease Control System—contained many basic errors, even locating some farms in the North Sea. These deficiencies delayed identification of the disease on infected farms and increased the time taken to slaughter animals. The Department needs to develop a reliable computer system to enable it to track the progress of any future outbreak of disease and to take swift and effective measures. The system needs to be fully maintained during periods when there are no disease outbreaks.

(vii)  Bio-security measures were insufficient to prevent the spread of foot and mouth disease in 2001 by people, animals and vehicles. In principle there would appear to be merit in the suggestion that the level of compensation for farmers should be linked to the adequacy of biosecurity on their premises, and the Department should consider whether a practical scheme could be devised.

(viii)  A foot and mouth alert in June 2002 centred on a pig that could not be traced to its farm of origin. It is of great concern that, so soon after the devastating problems in 2001, farmers and abattoirs should still be handling unmarked animals. The Department needs to be able to trace all contacts speedily in the event of any future outbreak of animal disease. It should institute effective checks for unmarked animals and penalise those who deal in them.

(ix)  The contiguous cull was controversial because it involved the slaughter of millions of apparently healthy animals. The Department should examine how the contiguous cull was implemented in 2001 and assess its impact and effectiveness, to inform decisions as to whether, and how, a contiguous cull should be used in the event of any future outbreak.

(x)  Seven mass burial pits were constructed at significant expense during the crisis to meet a worst case prediction of the number of animals that might need to be slaughtered. They were used to only one-third of their capacity and their long-term future has yet to be decided. The Department needs to formulate plans for the future of each site, and consult local authorities and residents on its proposals. Continued close monitoring and inspection of the sites in particular is essential.

On controlling the costs of the outbreak

(xi)  The Department is currently engaged in discussions with the livestock and insurance industries about alternative ways of reimbursing farmers for the costs of having their animals slaughtered. Rather than continue to make direct compensation payments, the Department is considering a subsidised insurance scheme or a joint industry-Government levy scheme. We are glad that these options are being considered since they offer the prospect of substantially reducing the taxpayer's exposure. The Department should report its conclusions to Parliament.

(xii)  The Livestock Welfare Disposal Scheme cost over £200 million in payments to farmers and nearly as much again to run, but failed in its purpose of alleviating animal suffering. The eligibility criteria were difficult to monitor and enforce, and generous payment rates led to the scheme being overwhelmed. Future welfare schemes should have clear objectives and eligibility criteria which can be readily checked. Payments to farmers should be set at a level that encourages applications to be submitted only in respect of genuine welfare cases.

(xiii)  The Department has been withholding payment of £90 million from companies in respect of invoices where it has so far been unable to verify that the work claimed for has actually been carried out. The Department is checking outstanding invoices and seeking supporting documentation. It should seek recovery in those cases where it believes it has been overcharged.

(xiv)  Poor financial controls were exercised by the Department over cleansing and disinfection work, which cost some £300 million in total. The Department had few standards or criteria on how cleansing and disinfection should be carried out, and this lack of guidance led to large variations between regions and significant differences in the costs incurred per farm. Improved guidance should be developed on the standards of cleansing and disinfection to be adopted in the event of any future outbreak.

(xv)  The Department chose to pay for the cleansing as well as the disinfection of farms because it wanted to be sure that the disease would not re-emerge. The Dutch government did not pay for the cleansing of farms and therefore incurred significantly lower costs on this work than the United Kingdom. The Department should examine the Dutch experience to assess the risks and benefits of their approach. The Department should also examine whether in any future outbreak the cost of cleansing and disinfecting could be met by the proposed insurance or levy scheme that is under consideration.


  1. The Department had prepared contingency plans for foot and mouth disease which met European Union requirements. The plans comprised a national contingency plan for Great Britain; local contingency plans; and standing field instructions for veterinary and other staff. The plans were approved by the European Commission in 1993 and had been updated in various ways since then. In the event, contingency plans worked in those areas where there were relatively few cases. But in the worst hit areas, the resources needed to deal with the disease rapidly went beyond what had been envisaged in contingency plans.[2] The Department acknowledged that the plans had proved inadequate for the situation it faced, as the plans of other countries would have done if they had faced the same situation.[3]

Scenario planning and wider impacts

  1. In line with European Commission guidance, the Department's plans were based on the assumption that there would not be more than ten infected premises at any one time. The Department had not considered any other scenarios because it felt that the risks of foot and mouth disease were low. This was a serious misjudgement. In the event at least 57 premises were infected before the outbreak was discovered and 2,000 premises were infected in total.[4]
  1. Little prior consideration was given to the impact that a large-scale epidemic might have on non-farming businesses. The outbreak had a severe impact on the rural economy, with many small businesses that depend on countryside visitors being badly affected. The closure of rights of way, alongside images of the burning and burying of animal carcasses, was widely perceived by the public at home and abroad as meaning that the countryside was closed.[5] The Department acknowledged that, in the light of the experience of the 2001 outbreak, a blanket closure of footpaths in the event of a future outbreak was unlikely.[6]

Consultation with stakeholders

  1. The Department had not consulted other key stakeholders about its contingency plans, such as government departments, local authorities and representatives of farmers and the veterinary profession, though stakeholders had been involved in a number of simulation exercises to test contingency plans, and a large number of local authorities had been involved in the development of local contingency plans. During the outbreak of classical swine fever in 2000 the Department had held regular meetings with stakeholders. The Department accepted that it needed to have a much more rigorous process of engagement with stakeholders in the preparation and testing of contingency plans.[7]

Reporting by farmers of suspected cases of foot and mouth disease

  1. Foot and mouth disease is a notifiable disease and there is an obligation on farmers or their vets to report any suspected cases. In the event of an unreported case, the Department would become aware of the disease only after it had spread, perhaps being picked up in an abattoir or being noticed by a vet on a farm visit. In the 2001 outbreak, the source case on a pig farm was not reported for three weeks, by which time the disease had spread far and wide. The Department's contingency plans did not allow for the possibility of the disease not being reported, nor did the plans consider that the disease might subsequently be spread through sheep, where it would be difficult to detect.[8]

Preventing illegal meat imports

  1. The 2001 outbreak of foot and mouth disease was probably caused by the importation of contaminated meat into the United Kingdom. The Government was trying to minimise the risk of illegal imports, and in March 2002 the Department published an action plan on illegal imports. This plan included a risk assessment based on the probabilities of undetected imports, the relevant hazards and the risk pathways. Its success depended crucially on effective intelligence and the sharing of data amongst the various enforcement agencies.[9]


  1. Before the outbreak the Department had drawn up detailed instructions for the use of emergency vaccination, but these had not been distributed to local offices. At the height of the outbreak, the Government had accepted that there might be a case for a limited emergency vaccination programme, and the Department had considered protective vaccination in Cumbria and possibly Devon. A European Commission decision would, subject to strict conditions, have permitted the vaccination of certain animals in certain counties, with the vaccinated animals allowed to live. The Government also set further conditions which would have had to be met before vaccination went ahead: there would be no slippage on the slaughter policy; there would be sufficient support from farmers to ensure that vaccination of the vast majority of the cattle involved would be completed within 14 days; and the meat and milk from the animals would find a market. Vaccination did not go ahead because the last two conditions were not met, since the necessary support of farmers, veterinarians, retailers and food manufacturers could not be obtained.[10]
  1. In November 2002, in response to the reports of the Royal Society and Lessons Learned Inquiries into the 2001 outbreak, the Secretary of State for Environment, Food and Rural Affairs announced that the option of vaccination would form part of any future strategy for the control of foot and mouth disease.[11]

Preparation of revised contingency plans

  1. The Department is revising its contingency plans in the light of experience in 2001. An interim contingency plan had taken account of discussions with stakeholders and other Government departments. After discussions with stakeholders, the plans would be tested by all the interested parties on a regular basis. The Department was also working on the revision of contingency plans for other notifiable animal diseases.[12] In November 2002, in response to the various inquiry reports, the Department published a revised version of its contingency plan on its website for comment and consultation.[13]


  1. Foot and mouth disease was eradicated in two months or less in around half the infected areas (Figure 2). The Department was largely successful in containing the outbreak to those areas initially infected with the disease, thereby protecting large areas of important livestock production in adjoining and more distant areas. The Department was also successful in ensuring that once the disease had been stamped out in an area it did not reappear. However, there were severe problems in handling the outbreak in the worst-hit areas.[14]

Figure 2: Time taken to eradicate foot and mouth disease by Disease Control Centre

Source: National Audit Office analysis of Departmental figures

National movement ban

  1.   Preventing the movement of infected animals is a vital element of disease control since direct animal to animal contact is the quickest means of virus transmission. The Department did not impose a national movement ban (and closure of livestock markets) until 23 February 2001, three days after the first case was confirmed. It did not do so earlier because it believed that local movement restrictions would control the disease. A national ban would have been unprecedented, and the Department initially considered that there was no evidence to justify it. One of the Government's academic advisers has estimated that the overall scale of the outbreak might have been reduced by between a third and a half if a national movement ban had been imposed straightaway on 20 February 2001.[15]
  1. The Department acknowledged that, had it known on 20 February 2001 that the virus was already active on 57 farms, it would not have waited until 23 February 2001 to impose a national movement ban. Between the identification of the disease and the imposition of the national movement ban, a further 62 premises in seven counties were affected. If the ban had been imposed from the first day, the disease might not have affected those seven counties. However, the national movement ban imposed on 23 February 2001 was widely regarded at the time as a draconian measure, which could cause major welfare and economic problems.[16] The contingency plan now published by the Department is based on the presumption that a national movement ban would be imposed on the day the first case was confirmed.[17]

Shortage of vets

  1. After the disease was confirmed on 20 February 2001, operations were initially directed by the Department's veterinary officers. In many areas they were overwhelmed by the scale of the managerial and organisational role that they had to perform. A severe shortage of vets led to delays in disease control, particularly the identification and slaughter of infected and exposed animals.[18]
  1. The Department said that on 23 February 2001 it had activated the International Veterinary Reserve, an agreement between the United Kingdom, Australia, Canada, Ireland and New Zealand to support each other in the event of an outbreak of disease. It had also advertised and requested vets from private practice. However, it had proved difficult to achieve the very rapid increase in the number of vets that was needed; it took time both to recruit them and also to get them mobilised.[19] Many were deterred by what they saw as the low rate of remuneration of £160 a day. The Department therefore increased the daily rate to £250 and backdated the increase to the start of the crisis.[20]
  2. The availability of veterinary resources was increased further by relaxing the quarantine periods for vets after visiting infected premises. At the beginning of the outbreak anybody who had been in contact with the foot and mouth disease virus was not allowed on to farms for five days. During the outbreak this period was first reduced to three days, following discussions with the Institute for Animal Health, and then to 24 hours. In Cumbria, which was extremely short of vets, the quarantine period was reduced to overnight. The possibility of vets spreading any disease was remote as they were cleaning and disinfecting as they moved from one farm to another. In the event of another outbreak, the quarantine period would probably be set at between 24 and 72 hours.[21]
  3. The Department said that the number of front line vets had not altered significantly since 1990. Although there had been a significant reduction in the management structure of the State Veterinary Service, the number of field vets had remained stable, varying slightly according to the ease of recruitment. The staffing of the State Veterinary Service would now be reviewed in the light of the various inquiry reports. The Department would also be considering how to increase resources from outside the State Veterinary Service to deal with an emergency.[22]

Military assistance

  1. The Department kept the military informed from the outset but did not call for large scale military assistance until mid-March 2001. The armed services went on to play a key supportive role, assisting centrally and locally in the organisational and logistical arrangements, particularly for slaughter, transport and disposal.[23] The Department said that it had initial contacts with the armed services from the outset. Ministers formally notified the Ministry of Defence on 1 March 2001 that they were considering military assistance. But it was only at the beginning of the week of 12 March 2001, when the scale of the disease had become apparent, that the Department identified a clear role for the armed services.[24]

Information technology systems

  1. The Department's communications and information systems were severely stretched throughout the epidemic. At the beginning of the foot and mouth outbreak, the Department had developed the Disease Control System, a web based database which could be accessed to add and remove information. A major difficulty with the database was the three-fold problem of identifying animals, owners and land. First, the farm and the land had to be identified, then the owner of the land had to be established and finally the animals had to be located. The Department was actively working with the Rural Payments Agency and others to introduce a system which would provide precise data on the location of each holding. Such a system would however be extremely expensive and complex to develop.[25]

Biosecurity and livestock tracking

  1. Biosecurity precautions to minimise the risk of the foot and mouth virus being spread inadvertently are a key element of disease control. They include the thorough cleansing and disinfecting of people, equipment and vehicles by those working on and visiting farms. Strict movement controls also need to be put in place. During the 2001 outbreak foot and mouth disease was spread largely as a result of movements of people, animals and vehicles. Some 78% of foot and mouth disease cases resulted from local spread between infected premises within 3 kilometres of each other, much of which resulted from poor biosecurity.[26]
  1. Asked about an unmarked pig with suspected foot and mouth disease which was identified in June 2002, the Department said that the farmer was breaking the law, and the abattoir should not have accepted it. Ministers were examining urgently with the industry what further action should be taken in the light of this case.[27]

The contiguous cull

  1. In mid-March 2001 the Government's scientific advisers provided evidence that the Department was finding it difficult to keep up with the number of new daily outbreaks and was effectively chasing the disease. The advisers warned of an exponential growth in the number of new cases. In the light of this advice, the Department introduced a number of changes, including the slaughter of animals on premises contiguous to infected premises. These changes helped to control the disease but led to the culling of many apparently healthy animals.[28]
  1. The Department said that the Government used what it considered to be the best external scientific advice in developing the contiguous cull policy. Animals on contiguous premises would have been exposed to the disease and could have shed virus before clinical signs of the disease became apparent. The scientific advice given to the Government, and shared by the Government's Chief Scientific Adviser, was that the number of cases would continue to increase, perhaps dramatically, unless further action was taken.[29]

Disposal and environmental impacts

  1. The most commonly used methods of disposing of slaughtered animals were burning, rendering, landfill and burial. In practice the Department experienced problems with all the methods used. In March 2001 many carcasses were disposed of on mass pyres, but the Department said that it would not use funeral pyres as a method of disposal in the event of any future outbreak.[30]
  1. Some 1.2 million carcasses were disposed of at mass burial sites (Figure 3). Mass burial was adopted when the disposal problem became very severe, especially after the introduction of the contiguous cull policy. The Department thought it prudent to plan for the worst case scenario, and the total capacity of the sites was about three times that which was eventually needed. The Department was in discussion with local authorities and residents about what should now happen to the sites.[31]

Figure 3: Cost, capacity and use of the mass burial pits
Burial site Location
Likely total costs to the Department over the life of the site

Potential capacity in terms of sheep carcasses (note 1)
Number of carcasses buried
Great Orton (Watchtree) Cumbria
Tow Law (Stonefoot Hill) County Durham
Widdrington (Seven Sisters) Northumberland


Birkshaw ForestDumfries and Galloway, Scotland
Eppynt (Sennybridge) Powys, Wales
0 (note 2)
Ash MoorDevon
0 (note 3)

Source: National Audit Office analysis of the Department's data.

Notes: (1) On average a sheep weighed 50kg, a pig 100kg and cattle 500kg. (2) 18,000 carcasses were originally buried at Eppynt but because of seepage problems they were subsequently burnt, along with a further 19,500 carcasses. (3) By the time Ash Moor was opened, the need had passed.

  1. Extensive monitoring had been undertaken to evaluate the environmental risks of disposing of millions of carcasses. There had been four significant water pollution incidents but no reports of illnesses. The evidence from monitoring air quality around the mass pyres showed that they posed no additional risk to health through the food supply and no illnesses associated with air quality had been detected. Dioxin levels had been closely monitored and it was unlikely that anyone would have exceeded the tolerable daily intake of dioxins for any substantial period.[32]


@AFLINK@Compensation to farmers for animals slaughtered

  1. Farmers are legally entitled to compensation for livestock slaughtered for disease control purposes. The Animal Health Act 1981 requires compensation to be based on the value of the animal immediately before it became infected or was slaughtered. During the 2001 foot and mouth outbreak farmers received over £1.1 billion in compensation for animals that were slaughtered for disease control purposes. Professional valuers determined the compensation to be paid. Their valuations tended to rise as more and more animals were slaughtered because they expected the resulting shortage of stock to be reflected in increased prices when the markets reopened. Average compensation values for cattle and sheep tripled during the crisis.[33]
  1. There were a number of difficulties in establishing compensation values. Information about the market values of animals was not available after the markets had closed at the start of the crisis. Many animals were being slaughtered at a time when they would not normally be traded. There were therefore no clear benchmarks to determine valuations.[34] Farmers were allowed to select a valuer of their choice. Fees paid to valuers were based on 1% of their stock valuations, with a minimum fee of £500 a day and a maximum fee of £1500 a day. The Department agreed that these arrangements provided an incentive for valuers to over-value but said that there was no evidence of such overvaluation on a systematic basis.[35]
  2. It was difficult to overturn the valuations as there was no market to which the Department could refer, and the valuations were done by experts in the type of stock slaughtered. The valuers were able to refer to the history of the stock in question, and had much data on which to base their valuations. The Department had challenged 150 out of 10,000 valuations and found that, apart from one or two where there was obvious concern about collusion, the valuations were well supported by sale documents for similar stock, histories of the stock concerned or parallel information elsewhere in the herd.[36]
  3. Standard rates for slaughtered animals were introduced on 22 March 2001 because the valuation process was thought to be delaying the slaughter of animals on infected premises. The standard rates were generous to encourage farmers to use them. The Department expected that at least 70% of farmers would accept the standard rates rather than seek individual valuations. In the event, however, the standard rates were used by only 4% of farmers. They acted as a floor for valuations and contributed to the rise in the amount of compensation paid.[37] The Department had begun to observe an upward creep in valuation levels in April 2001, but had concluded that to change the arrangements at that time would be more likely to complicate matters and risk delaying slaughter. It recognised however that valuation arrangements needed overhauling.[38]


  1. Compensation is payable to farmers for animals slaughtered for disease control purposes whether or not the owner has insurance to cover the loss. A number of farmers insure against various diseases, generally to cover the consequential loss of having their animals destroyed, such as the loss of milk or meat production. The Department was not aware of any insurance policies which covered owners for the capital value of their animals. Such cover would be nugatory given the Government's obligation to pay compensation.[39] The Department was actively pursuing ways of sharing the financial risk of animal diseases with the industry, whether through subsidised insurance schemes, or a joint industry-Government levy.[40]

The Livestock Welfare Disposal Scheme

  1. Farmers received over £200 million for animals slaughtered for welfare reasons. These animals, though not directly affected by foot and mouth disease, had suffered through being confined by the movement restrictions. The payment rates for the scheme were attractive to farmers, and were generally considered to be higher than the likely market price had markets been operating. Because so many claims were received from farmers with modest or no welfare problems, it took much longer than it should have done to process claims from farmers with serious immediate problems. To that extent the scheme failed in its purpose of alleviating animal suffering.[41]
  1. The Department had introduced the Scheme as a last resort to deal with the major welfare problems arising when animals could not be moved. The prices had distorted behaviour, however, and had therefore been reduced. Checks on eligibility had been introduced, but there was much subjective judgement involved in determining what was a welfare case and what was not. Eligibility checks were tightened from the beginning of May 2001. Of the rejected applications, none had led to a fraud investigation.[42]

Cost and financial control

  1. Large numbers of staff had to be brought together quickly and deployed across the country, and a wide range of goods and services procured to meet urgent demands. The Department recognised that it would have to pay a premium to get things done in such circumstances. The £113 million spent on the construction of the mass burial pits was much more than would have been necessary had the task been less urgent. The Department's weak negotiating position also resulted in it paying excessively for goods and services. For example, it paid up to six times the going rate for land; and valuers, slaughterers and private vets all demanded and received higher fee rates.[43]
  1. The Department had introduced various measures to secure value for money. Commercial, legal and procurement advice was available from the centre of the Department, and key procurement and contracting staff had been sent to all the Disease Control Centres. A procurement cell had been set up in the Department's Joint Co-ordination Centre. Quantity surveyors, claims surveyors, forensic accountants, lawyers and claims specialists had been employed. A vigorous programme of internal audit had been implemented to identify and tackle control weaknesses.[44]
  2. Nevertheless, cost and financial controls were weak, particularly during the early weeks of the crisis. Many contracts, which would normally be put out to tender, were awarded without competition. Aspects of some contracts were initially agreed orally. When contracts came to be written and formalised it was sometimes difficult for the parties involved to recall the detail of what had been agreed. And information was often lacking to support the payment of bills. These problems later gave rise to many disputes about payment for work done.[45]
  3. The Department said that it was still engaged in a clear-up exercise in settlement of contractors' claims. It was in commercial dispute with over 20 companies and was withholding payment of £90 million whilst verification and substantiation work was undertaken. In some cases companies had themselves been overwhelmed by the scale of the outbreak and may, therefore, not have kept adequate records. In other cases companies had simply behaved badly and the Department was taking a tough line.[46]
  4. The Department intended to identify its procurement needs in the event of another serious outbreak of disease and its contingency plan made provision for greater use of pre-contracting in future.[47]

Cleansing and disinfecting

  1. The cost of cleansing and disinfecting farms, amounting to £300 million, was one of the largest areas of expenditure during the outbreak. The average cost per farm was £36,000, but there were wide regional variations. In July 2001 the Department had carried out a review in the light of concerns about the escalating cost of cleansing and disinfecting. The review noted that the Department was not well placed to exercise effective control and was frequently unable to monitor the work being carried out by contractors. The review led to a tightening of controls: no cleansing and disinfecting was to take place without a clear business plan, a statement as to the number of days to be worked, an estimate of the cost of the work and details of who would be undertaking it. The Department had subsequently recovered some £8.2 million out of the total of £9.4 million which it considered it had overpaid.[48]

1   C&AG's Report, The 2001 Outbreak of Foot and Mouth Disease (HC 939, Session 2001-02) Back

2   C&AG's Report, paras 2.7-2.13 Back

3   Q 172 Back

4   C&AG's Report, paras 2.30-2.35 Back

5   Ev 47-49 Back

6   Q 191 Back

7   C&AG's Report, paras 2.53-2.57; Qq 7-8 Back

8   Qq 96, 98, 154 Back

9   Qq 92, 236; Ev 33 Back

10   C&AG's Report, paras 2.20-2.29; Qq 219-227 Back

11   HC Deb, 6 November 2002, col 287 Back

12   Qq 8, 175, 177: Ev 49 Back

13   HC Deb, 6 November 2002, col 286 Back

14   C&AG's Report, paras 3.4-3.10 Back

15   C&AG's Report, paras 3.50-3.54 Back

16   Qq 9, 79-80, 158 Back

17   Qq 9, 176 Back

18   C&AG's Report, paras 3.14-3.17, 3.33-3.42 Back

19   Q 86 Back

20   Q 87 Back

21   Qq 123-125 Back

22   Qq 163, 264; Ev 47 Back

23   C&AG's Report, paras 3.24-3.29 Back

24   Qq 77-78, 82-85 Back

25   Qq 13-15 Back

26   Qq 45, 179; Ev 42, para 107 Back

27   Q 160 Back

28   C&AG's Report, paras 3.70-3.81 Back

29   Qq 39-42 Back

30   C&AG's Report, paras 3.98-3.100; Q 193 Back

31   Q 230 Back

32   Qq 195-197: Ev 31-33 Back

33   C&AG's Report, paras 4.5-4.9 Back

34   Qq 10, 46, 50 Back

35   C&AG's Report, paras 4.10-4.14; Qq 51, 57, 118 Back

36   Qq 54-56, 130, 135-136 Back

37   C&AG's Report, paras 4.16-4.19 Back

38   Qq 10, 64, 66 Back

39   Qq 143-144; Ev 30 Back

40   Qq 142-145, 182, 240, 248: Ev 30 Back

41   C&AG's Report, paras 4.22-4.32 Back

42   Qq 68-71; Ev 29 Back

43   Qq 11-12; C&AG's Report, paras 4.37-4.48 Back

44   Q 138 Back

45   C&AG's Report, paras 4.49-4.55 Back

46   Qq 12, 138-140, 212 Back

47   Q 113 Back

48   C&AG's Report, Figure 58; Qq 183-185 Back

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