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Defra will face difficulties paying farmers their Basic Payment Scheme (BPS) payments early and accurately following this year’s IT fiasco, a new report warns.

About 30,000 farmers and landowners in England were due to receive their BPS payment on the opening day of the window, Tuesday 1 December, according to the Rural Payments Agency (RPA).

But as the payment window opened, a report by the National Audit Office (NAO) laid bare the failings of Defra, the RPA, Government Digital Service (GDS) and other government bodies in their aborted bid to deliver a new “digital-only” BPS this year.

See also: Crunch time as farm payment window opens

Ineffective collaboration between government agencies has been blamed for the failure to launch the new digital-only Rural Payments system in England earlier this year.

CAP Delivery Programme: Key facts

  • £215m – budgeted cost of the CAP Delivery Programme in the September 2015 business case
  • 40% increase in costs in the three years since the outline business case
  • £1.8bn – average annual value of Common Agricultural Policy (CAP) payments in England, 2015 to 2020
  • 105,000 payments to farmers expected every year
  • Seven fundamental changes to the programme “increased the level of innovation and risk”
  • 88,000 Basic Payment Scheme claims received from farmers and agents, mainly via drop-in centres and post
  • £642m – total disallowance penalties incurred in England since 2005

Defra and Cabinet Office did not ensure a “clear and consistent vision” for the Common Agricultural Policy (CAP) Delivery Programme, the early review found.

They also did not effectively manage competing priorities, the report says.

As a result, Defra expects higher levels of disallowance penalties, poorer customer experience and difficulties paying farmers accurately at the earliest opportunity, the NAO says.

The £215m CAP delivery programme has been set back by numerous changes in leadership.

“There were four senior responsible owners within the space of a year, each bringing their own style and priorities,” says the report.

“Repeated changes were disruptive to the programme and caused uncertainty and confusion for its staff.

“The department failed to prevent counterproductive behaviours, with deep rifts in working relationships and inappropriate behaviour at the senior leadership level at many stages of the programme’s three-year history.”

In addition, GDS did not provide the support that Defra believed it needed to adapt to the changes during the spend control process.

While GDS committed to reducing the overall programme costs, improving the delivery confidence of the programme and building the department’s digital capability, its support was reported to be “patchy” and with “limited continuity in personnel”.

Defra had expected the 88,000 applicants to be able to register using the government’s identity assurance system, Verify, from October 2014.

Although the Verify team had advised the department that they would need to make alternative means available to access the service, Verify was not sufficiently ready for widespread use by farmers in October 2014 – and no alternative was initially put in place.

The vast majority of customers, therefore, registered using the RPA’s existing process, supported by drop-in centres and the RPA’s telephone helpline.

But in March 2015, in response to serious failings of the system, the online application system was abandoned and replaced by “paper-assisted digital” applications for the 2015 scheme.

This was a “speedy and effective change” to the programme that has increased the likelihood that the majority of farmers will receive BPS payments in December, the NAO says.

However, the focus on resolving immediate issues has diverted attention from long-term goals of improving the service to farmers, minimising future EC penalties and achieving other intended benefits, such as addressing the land data issues that are causing current penalties, the NAO adds.

Amyas Morse, head of the NAO, said Defra, the RPA and GDS needed to learn “serious lessons” from the latest failure.

She added: “Costs have increased and systems functionality has not improved at the rate expected, either in the back office or the user-facing front end. This does not represent value for money at this stage.

“One consequence of this is that the department faces difficulties paying farmers accurately and at the earliest opportunity.

“While the department is now making progress towards its target of paying BPS claims for the majority of farmers in December, significant challenges remain for the programme.”

Commenting on the NAO report, Meg Hillier MP, chairman of the Committee of Public Accounts, said: “The CAP Delivery Programme will now cost far more, but deliver far less, than was originally planned, and incur millions of pounds worth of avoidable penalties.

“This is not a good deal for the taxpayer or for farmers.

“Defra and the GDS have repeatedly failed to get the basics right. There is no clear vision, numerous changes in direction and governance, poor leadership, and ineffective risk management.”

Defra is understood to disagree with the NAO criticism surrounding accuracy of payments. The department insists that the payments farmers are receiving are accurate.

To this end, the RPA used a nine-point plan of checks and controls on the level of data quality and accuracy in the run-up to making payments under BPS.

However, the NAO assessment was largely based on analysis of activity in June and July 2015, before the system of checks and controls was introduced.

A Defra spokesman said: “The new Common Agricultural Policy (CAP) is widely acknowledged as the most complex ever and a new IT system was needed to handle this additional complexity and to make claiming as simple as possible for farmers.

“While there was a problem with one part of the online interface that enabled farmers to put data directly into Rural Payments, the system has always worked and has successfully started making accurate payments to thousands of farmers on the very first day of the payment window.

“The Rural Payments system will be further improved next year to make it easier for farmers to apply for their CAP payments.”