17 August 2001

EU denies inquiry into excessive payments

By Philip Clarke

MEDIA claims that Brussels has launched an investigation into the UKs "excessive" foot-and-mouth compensation pay-outs have been flatly denied by EU Commission officials.

The suggestions followed the publication of a report on an inspection visit to the UK by the EUs Food and Veterinary Office last April. This scrutinised all aspects of the F&M crisis, including the slaughter and disposal of animals, movement controls and epidemiological testing.

On the subject of valuations, the FVO concluded "it is possible that excessive payments have been made in some instances".

"The freedom for farmers to choose a valuer and their subsequent payment on the basis of a percentage of an animals estimated value may lead to a conflict of interest," it said.

"Discrepancies between animal numbers at the time of the initial F&M confirmation and those presented for valuation suggest there may have been illegal movements of animals onto farms during this period."

The report, which was presented to the UK government more than two months ago, also noted that some valuations were "significantly higher" than Intervention Board guidelines. "Immediate action should be taken to ensure that valuation procedures are properly controlled," it suggested.

But a commission spokesman said no further action had been taken by Brussels so far. "The report has been handed to the independent audit office, OLAF, which has contacted the UK authorities and continues to monitor the situation. It has not launched any official inquiry."

Meanwhile, the commission has already received the UKs first request for funds to help meet the cost of F&M controls, reported to be around k800m (£496m).

Under 1990 legislation, Brussels is obliged to pay 60% of the cost for culling animals, disposing of the corpses, destroying feed and disinfecting buildings. This is paid in "tranches".

"If we find out later that there was over-compensation or fraud involved, we can scale back the final payment," explained the spokesman, pointing to the 1997 classical swine fever outbreak in the Netherlands when this happened.

Brussels would probably adopt a decision to release the first sum of money later this month, he said, though the commission could launch its own investigation if it suspected malpractice.

But the spokesman added he was not particularly surprised by the sums being paid in the UK. "It all depends on the size of the farm and the quality of the livestock." &#42

For more on compensation – p12