---

Department for Environment, Food and Rural Affairs

As the right hon. Member for Fylde (Mr. Jack) said, it is a great pleasure to debate agriculture on the Floor of the House. The Government and the Opposition appear reluctant to use the time available for that. The production of good, safe and secure food, the protection of the environment and opportunities for the public to enjoy the countryside are important for the nation. I congratulate the Under-Secretary on his appointment. I am sure that he will enjoy participating in a fast-moving sector of industry. Many changes have taken place in the recent past, and more and rapid changes will happen in the near future. I would also like to place on record my declarations of my farming interests that appear in the register. In preparing for this debate, I thought that it would be interesting to consider the farming industry through the eyes of the younger person. It is impossible for me to do that, given the stage of my career in the industry, so I spent some time talking to young farmers at the royal show, at NFU conferences and in other locations. The average person who would be expected to go into the agricultural industry looks at it in a despondent and unhappy frame of mind. Young people look at the returns and at the commitment necessary to do the job properly, and they see that the two just do not add up. When they see their friends and acquaintances going into other professions, they are discouraged from going into farming. Indeed, at a time when farming is being encouraged to be more business-like, to prepare business plans and to set out cash flows, young people were doubly disappointed that DEFRA could not deliver the single payment when it was expected. They do not want to do business with an organisation that cannot pay on time. The right hon. Member for Fylde went through a number of the conclusions of our inquiry, but it is impossible to set out the scale of DEFRA’s failure in this matter: one only has to consider the other countries in the European Union and the devolved Administrations in the United Kingdom to see how they delivered. They adopted different approaches to the single farm payment, as the regulations permitted. Some adopted the dynamic hybrid, some adopted an area payment straight away and some adopted an historic payment. However, almost without exception, other countries managed to deliver the majority of the payments early in the payment window, which extends from 1 November to 30 June. Most countries were able to deliver within the first two months of that window. The purpose of the window is not to spread the payments; it is to deal with the difficult applications that every scheme will throw up from time to time. No one would criticise any organisation or country delivering the scheme for being cautious about disbursing public money if there was a doubt about an application. There is no advantage to any country in holding on to the money. No interest accrues to the Treasury of a country, because the money is drawn down from the European Union as the claims are disbursed. There is, in fact, every encouragement for the money and the claims to be dealt with quickly, because that releases staff to prepare the next round of payments. DEFRA fell apart between the 2005 and 2006 applications. When we took evidence, it quickly became clear to me that the real problem was that DEFRA had decided to adopt a dynamic hybrid at the same time as the change agenda was being taken forward in the Rural Payments Agency. I can understand why DEFRA wanted to go for an area payment scheme, rather than the historic payment scheme, which would more securely decouple support from production. I have no criticism about the extent of that ambition. However, if DEFRA had conducted a risk analysis of the difficulties of delivering not just an area payment scheme or an historic scheme but the dynamic hybrid, that would surely have sent waves of caution through the organisation. At the same time as DEFRA decided to take forward a dynamic hybrid, change was taking place in the RPA. That change programme, if successful, was going to lead to a reorganisation and substantial savings in public expenditure. The two processes coming together was, I believe, the cause of the problem in delivering the scheme. Indeed, I would not be surprised if the Government said something along those lines in their response to our inquiry. I visited the RPA in Reading with my hon. Friend the Member for North-West Leicestershire (David Taylor), as I call him. It was clear that it had been necessary to compensate for the reduction of staff there by employing temporary operatives. The training period necessary for them to become conversant with the system was such that some left before they were fully trained. It was clear to us that the mapping system was a cause of the problems, and one that it would be difficult to overcome. The relationship between DEFRA, the RPA and Accenture should be re-examined and lessons learned for future IT programmes, because the necessary engagement to make the most of the available talent and resources seemed to be lacking. Indeed, the lack of direct meetings between the RPA chief executive and the then Secretary of State was one of the things that seemed to contribute to failure. At a time when the project was in such trouble, that direct contact was lacking.