Annex A - Understanding RPA’s approach to claims to the Single Payment Scheme: an administrative chronology

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Before CAP  Reform

RPA starts  work in 2001

  1. RPA was  established in October 2001 as an executive agency of Defra. It replaced the  Regional Services Group of Defra and the Intervention Board for Agricultural  Produce. RPA became the accredited European Union (EU) paying agency for Common  Agricultural Policy (CAP) schemes in England.61 In January 2010 RPA had 3,390 full‑time staff and paid a total of about £1.86  billion in SPS payments to around 106,000 farmers.
  2. A review of  government spending in 2000 had released £130 million for streamlining the  system of administering claims under the CAP. RPA started a ‘change programme’  in 2001 in order to do that. It was due to finish by the end of 2004. The aims  of the programme were to:  
    • ensure 95 per  cent electronic delivery capability for CAP schemes by 2004, with the facility  for electronic submission of claims for all schemes;
    • reduce the cost  of CAP administration and the risk of disallowance;
    • reduce the  average time taken by a claimant to complete a claim for CAP payment;
    • pay all valid  claims submitted electronically within two weeks of the start of the payment  window (or three weeks from the date of receipt where no payment window  existed); and
    • improve the level  of staff and customer satisfaction, measured in annual surveys, by 5 per cent  per annum.62
  3. In April 2003 the  House of Commons Environment, Food and Rural Affairs Committee reported on RPA.  Their report, and the evidence from RPA senior managers, covered problems with  late payment of subsidy to farmers, the risks of information technology and  poor customer relations – including the effect of mistakes by farmers in claim  forms.

Drop‑in centres

  1. The changes  included cutting the number of RPA offices and centralising the processing of  claims. On 18 December 2001 RPA’s operations director minuted the  Minister and senior managers in Defra and RPA about using drop‑in centres,  which offered face‑to‑face information to farmers, particularly in the run‑up  to some claim deadlines. He noted that Ministers and the RPA had assured  farmers that RPA would continue to offer face‑to‑face contact, at least until  2004. He recommended that RPA should provide a basic level of service at sites  from which work had transferred. He said that farmers were used to calling at  RPA offices to deliver forms or ‘seek advice’, particularly in  rural areas. But RPA had found the quality and timeliness of claims was  unchanged when farmers had been unable to call at RPA offices because of  restrictions resulting from foot and mouth disease. He said that newly‑established  drop‑in centres simply acknowledged forms before sending them on for processing  and:  

    ‘If we were to  attempt a replication of the previous service we would have to either increase  the staffing again, or transfer staff from another office. We have neither the  financial nor manpower resources to do either.’

    He  acknowledged that the industry might not welcome this change and suggested that  RPA explain the change to industry representatives ‘in a low key way’. He suggested that RPA should end claim ‘clinics’  by 2002 and expand their telephone helpline service. (See also the glossary  note on drop‑in centres, paragraph 146 and the Defra Permanent Secretary’s  comments at paragraph 147.)

  2. On 1 February  2002 RPA’s business continuity director at the Northallerton office minuted  senior managers about drop‑in centres. He noted that the Minister had concerns  about the potential loss of face‑to‑face contact with farmers visiting RPA. He  emphasised the scope for a gradual move away from present system based on  providing a basic check of the claim form for people who requested that and  referring people who wanted more advice to RPA’s telephone lines. He said: 
    ‘In order to  wean our customers away from the old and on to the new we shall need to be firm  but at the same time ensure that our systems are robust, easy to use, well  organised and deliver consistent and good quality advice.’
  3. Also in 2002  Defra carried out some research, called the Clayton report, which looked at how  farmers accessed information. One of its key findings was: ‘Customers’ preferred method of communication  is word-of-mouth. Access to a method of asking questions is seen as essential’.  It also found that farmers could take detailed explanations in leaflets to be ‘patronising’ and that they ‘obscure what customers need to know’. In  the papers we obtained for this investigation, we found no reference to this  research before July 2005.

CAP Reform begins in 2003

  1. In June 2003 the  EU adopted a fundamental programme of reform of the CAP. This programme left a  degree of discretion to member states for the timing and the method of  implementation of these reforms. As the paying agency for England, RPA became  responsible for the implementation and administration of those reforms in  relation to English farmers and producers. RPA combined their plans for the delivery  of the reforms with their change programme.
  2. RPA and Defra  started planning the implementation of what became SPS as soon as the EU  adopted CAP reform. Member states could choose to delay implementation until  1 January 2007, but the UK wanted to implement at the earliest date  of 1 January 2005. The planning had to run parallel with further decision  making and policy guidance by the European Commission and by Defra. The outline  Defra plan, set out by an RPA official’s email of 7 July 2003, worked towards a  May 2005 deadline for farmers to make their claims. It was:
    • consultation on  broad policy options – July until September 2003;
    • ministers decide  on policy options – October 2003;
    • Commission  implementation Regulations agreed – November 2003;
    • detailed policy  options consultation – December to February 2004;
    • ministers decide  on detailed policy – March 2004;
    • drafting scheme  rules/literature April to May 2004;
    • indicative  statements of farmer entitlements – September 2004; and
    • claim forms to  farmers – January 2005.
  3. One immediate RPA  response to the outline plan was: ‘We  need to ensure that RPA people who understand the business and the impact of  CAP reform contribute to any impact assessment’. The emails and planning  documents that we have seen from summer 2003 show that officials in Defra  and RPA knew they were working to a tight timetable. The issues they considered  included how to manage the development of RPA’s new computer system, RITA. Its  development had started as part of the change programme, and CAP reform would  change RPA’s requirements of RITA. But they had only until the start of 2005 to  build and test RITA and Oregon, the new computer system for paying claims.  Officials were also aware that the farming industry would need information  about the content of CAP reform and RPA would need an effective communications  strategy to deal with their information demands.
  4.    On 6 August 2003 the RPA manager responsible for  the implementation of CAP reform, who was also RPA’s representative on Defra’s  Single Payment Project group, asked the project leader for a success measure ‘along the lines of being able to give the  RPA [a] clear steer on scheme  implementation against a timetable to achieve full delivery of scheme  requirements by 01/01/2005’. He asked for explicit recognition of RPA’s  involvement at particular points. On the timetable he said:
    ‘I would  highlight for example the item on drafting scheme rules, literature and Sis [statutory  instruments] for being [of] prime importance. It is the scheduling and  the doing of the work that will make or break us.’
  5. In October 2003 RPA still had concerns that seemed to  some officials to have been overlooked by Defra. A 14 October 2003  email set out one official’s concerns after his conversation with a Defra  colleague. Among other things he said that the timetable had slipped by at  least three months; RPA were not going to be in good shape to give a set of  requirements to their systems supplier on 1 January; and even if they did  provide requirements, the business rules would not be ready in time. He said:
    ‘[The Defra colleague] did not understand the constraints we are working to: development  windows, costs, risks etc. We need to put […] a mini-road show  together and explain these issues and the options to Defra policymakers in  b&w [black and white] terms so that they understand the  consequences of delay. Defra’s view was that our deadline for ministerial  decisions is March, but they had leeway if it slipped into April – I explained  that the deadline for requirements is 1 January 2004 and the latest date for  final, final changes is 31 March.’
  6. On 17 October 2003 the project manager of RPA’s CAP  reform implementation project noted that it was not possible to agree the  functional specification for an area of software development63 because they needed more policy clarity. In particular, RPA were waiting to  find out what approach Ministers would take on calculating entitlements and  whether Ministers would make that decision in late November 2003 or would  put it off until January 2004. (See glossary on historic and hybrid and entitlements.)
  7. Also on 17 October 2003 the manager of the  RPA chief executive’s office asked for officials’ comments on an estimate of  the appeals costs under CAP reform – RPA and Defra expected to receive appeals  about entitlement decisions and the chief executive’s office would be involved  in those. RPA estimated that, if Ministers chose the historic entitlements  option, appeals would be ‘running into  five figures’ and a fair proportion would reach a higher legal challenge.  They also expected legal action on behalf of farmers or landowners as a group.  They thought numbers of appeals would be lower, and simpler, under the area‑based  option.

Waiting for  a decision about historic vs hybrid

  1. On 7 November 2003 RPA officials circulated a draft of  the revised business case for the RPA change programme. The draft noted that in  September 2003 senior managers had decided to postpone the move from the  existing computer systems to RITA until SPS was in place because of delays with  RITA and the need to focus on CAP reform.
  2.    On 25 November 2003 the director of Defra’s European  Union and International Policy Directorate minuted colleagues about the RPA  change programme business case, after a discussion with RPA the previous day.  He commented on how the uncertainty about when the key decision (about the  approach on calculating entitlements) would be taken affected obtaining a  decision on the business case. He said:    
    ‘Papers have  been put to our Ministers inviting a decision on what model to pursue [historical  v flat rate v hybrid]. Ministers are  very well aware that this is a highly sensitive issue and they will wish to  take their time before reaching a conclusion … I am sorry that we can’t give  RPA a firm indication of timing at this point.’

    He  said it was possible that Ministers would want to allow for some form of  consultation on the choice of model, although some work on collecting historic  information would be possible without a decision from Ministers. He concluded:  ‘I appreciate that this note is less  precise than RPA would wish in terms of setting out what needs to be done by  when; but it is as clear a picture as we can give at the moment’.  

  3. On 28 November 2003 the same Defra director minutedthe Defra Director-General for Food  and Farming. Among other things, his minute said: 
    ‘Accenture  need a certain level of specificity about future requirements by end December  but full details by end March. New or revised requirements can be accommodated  (subject to impact analysis) between January and March 2004 at no additional  development costs, however any rework will incur additional costs as will any  changes after 31 March … .’

    He  said he thought this was: ‘a slightly  more comfortable position than I had feared – failure to deliver the key  decision (historic or whatever) by end December does not throw an enormous  spanner in the financial works’. He noted that the Permanent Secretary was  concerned about cost and about RPA’s ability to deliver whatever option was  chosen against Ministers’ preferred timetable. He said it was up to RPA and the  RPA chief executive to convince the Permanent Secretary and the management  board that RPA’s contingency arrangements were robust. He also emphasised the  cost of keeping RPA’s existing ‘geriatric’  computer systems in action in 2005 and the risk of disallowance linked to  poorly performing systems.

  4. At this stage RPA expected Ministerial decisions in  November 2003 and at the end of April 2004. It expected European  Commission Regulations to be made by early April 2004. RPA still expected  to send farmers entitlement statements in September 2004 and to send them  claim forms in January 2005. The papers we have seen show that RPA had six  options for dealing with the tight timetable for developing the systems they  needed for CAP reform, such as delaying RITA until 2006 or delaying CAP reform  until 2006. But they noted that delaying CAP reform would be unacceptable  unless proposed by Ministers.
  5. A 2006 National Audit  Office report64 explained what RPA had intended to achieve from its approach to implementing  CAP Reform.
    ‘From its inception in 2001 the Agency [RPA] had embarked on a business change programme to improve efficiency but  had to revise its approach in November 2003 to include the development of  the single payment scheme which then became the key element of business change.  The way the scheme was implemented was designed to achieve efficiency savings  by enabling staff in different offices to work on any tasks relating to any  claim, rather than for the same individual or small team to process a whole  claim from end to end. The Agency [RPA] anticipated that this “task based” approach would enable faster processing and  improve staffing flexibility.’
  6. On 18 December 2003, after an update from  Defra, RPA changed their working assumption about the approach Ministers would  take to calculating SPS entitlements. They had expected the historic option.  They changed their assumption to the hybrid option.

Defra’s view on CAP Reform progress –  January 2004

  1.    In January 2004, in a memorandum to the House of  Commons Select Committee on Environment, Food and Rural Affairs, Defra  explained that:    
    ‘… some key  strategic decisions concerning the implementation of CAP reform have already  been made collectively by UK agriculture Ministers. These are:
    —  implementation of the SPS in the UK will be on a regional basis: Agriculture  Departments in England, Scotland, Wales and Northern Ireland will be  responsible for implementation in their respective countries; and
    — the SPS  will be introduced in the UK from the earliest date permitted under the  agreement, namely 1 January 2005.
    In addition  the Secretary of State has already announced that, with the possible exception  of seed aid, none of the options for partial coupling of payments will be taken  up in England.’
  2. By January 2004 Ministers had still to confirm  the entitlement calculation method they would use for SPS. But, as far as  possible, Defra and RPA officials were defining the policy which would direct  development of the computer systems RPA would use to process claims; calculate  payments; issue payments; and provide information on RPA’s handling of SPS to  satisfy the European Commission and auditors.
  3. Officials were also working on the SPS claim form. On  13 January 2004 an RPA official noted the effect of possible  different requirements for the form under the historic and hybrid options. For  example, he noted that RPA could comply with one requirement under the historic  option, but not under the hybrid option. He did not know whether or not this would matter, because the implementing  regulations were still not in place.

RPA concerns about CAP Reform implementation

  1. RPA and Defra officials were also discussing the risks  of different SPS entitlement options. Replying to a 20 January 2004 email  from a Defra colleague, RPA’s CAP reform project head noted RPA’s concerns  about risks that might be overlooked by Defra. He mentioned the following  risks, among others: 
    ‘…The risk of  not being able to establish entitlements after the end of the application  period in May 2005 and in time to inform producers by August 2005 and then  make payments from December 2005 onwards. The flat rate/hybrid option pushes a  significant amount of the work due to be done by February 2004/2005 directly  into a very short time window in 2005/2006. This gives a risk to our  accreditation status by perhaps taking on too much in too short a period as  outlined above. The risk to the delivery of our change programme because of  additional complexity and a change in the time frame. … The risk to the  realisation of benefits outlined in our business case as a result of pushing  additional work from 2004/2005 into 2005/2006 with the potential knock on  effects of that.’

    The  papers we have seen do not make clear how Defra responded to these concerns.

  2. On 4 February 2004 representatives from RPA’s central  scheme management unit, their legal team and the equal opportunities section  met as a result of an enquiry from a claimant with dyslexia about the  possibility of having scheme rules on audio tape. The meeting noted that the Disability  Discrimination Act required service providers to make reasonable  adjustments and it considered some proposed wording for forms and leaflets that  would invite people who had difficulty using RPA’s information to contact them.  They agreed to do some further work on wording and to prepare a paper for  consultation.

Ministers’ decision on entitlements calculation –  February 2004

  1. On 12 February 2004 the Government announced that it  would use the dynamic hybrid model for SPS in England.
  2. The papers we have seen show that in early 2004 RPA  were aware of the need to work effectively with Defra. To mitigate the risk  this created, they set up weekly management meetings to cover the risks, issues  and queries. The person responsible for RPA’s draft CAP reform communications  plan emailed colleagues with the following points on 2 March 2004,  which he called ‘a couple of comments and  health warnings’. He said:
    ‘…We obviously have to co‑ordinate all of our CAP reform communications  with Defra. In quite a lot of areas, including things such as participation in  shows in 2004, their thinking is still developing. We may therefore yet see  quite significant changes in our own planning occurring as a result of Defra  input.
     ‘When considering the timetable for the production of application forms  and explanatory guidance, we are obviously at the mercy of changes that may be  forced on us by the detailed implementing regulations for CAP Reform when these  are finally published.’
  3. The draft communication plan’s first objective was: 
    ‘to ensure that  farmers have sufficient understanding of [SPS] and are furnished in good time with the appropriate literature, to  apply to the scheme ahead of the 15 May 2005 deadline and so secure  the benefits to which they are entitled under its provisions.’
    The  plan provided for finding a small group of farmers to be a ‘customer  sounding board’ on operational issues and the implementation of SPS. The  plan also said that all of the key documents produced as part of the project  would be submitted to the Plain English Campaign.
  4. In April 2004 the RPA official responsible for CAP  reform communications noted the tight timetable for producing the SPS claim  form and the ‘uncomfortable’ timing for telling farmers about cross  compliance requirements. At this stage, he expected the definitive content for  the claim form to be ready by 18 June 2004, the form design to be ready in  August 2004 and the form to go out to farmers in March 2005. (The Regulations  required it to be issued at least a month before the deadline for receiving  claims.)
  5. In May 2004 RPA discussed their plans for dealing with  large numbers of appeals against their decisions on farmers’ historic subsidy  levels, so that they could report back to Defra. (RPA starting giving farmers  these decisions in July 2004, in a document called the information  statement.) The first question for RPA was whether or not they were doing  enough to ‘disincentivise’ appeals –  they wanted to focus on dealing with queries before the appeal stage. Among  other things they aimed to: ‘issue clear  guidance to producers on how SPS will operate to avoid representations based on  lack of understanding of the scheme’.

RPA look at  reasonable adjustments for people with disabilities

  1. In June 2004 RPA’s central scheme management unit  produced some guidance on assistance to claimants with disabilities. The  guidance reflected the discussion of February 2004. On 24 June 2004 RPA  officials exchanged emails about what adjustments they should make for the  needs of people with disabilities or with particular communication needs. The  RPA official responsible for CAP reform communications had been asked by a  colleague what action was proposed on the issue of ‘disability’. He said  he could confirm that the literature and forms produced so far made no  reference to the situation of disabled customers. He suggested that a  proportionate response might be to include a general statement:  
    ‘Customers with  special needs – we are committed to providing consistently high quality  services that are valued by our customers. If you have any difficulties in  accessing information from us, please contact your relevant RPA office.’

    This  was the wording suggested in the RPA meeting in February 2004 of RPA  scheme management unit, legal and equal opportunities representatives. The same  official asked colleagues to let him know if they thought RPA should go further  than that. The two responses we have seen were that this approach seemed best  at this stage and that there would be a Minicom number for the hard of hearing,  which could be publicised with the Customer Service Centre telephone numbers.

  2. In July 2004 RPA sent farmers in England their  information statements, which told them the figures used to calculate the  historic element of their SPS entitlements. (See glossary on entitlements and historic and hybrid.) Some statements were issued later in the  year. RPA asked farmers to tell them if they disagreed with the statement; if  they wanted to claim ‘special circumstances’; if the ownership of a  business had changed or would change in 2000 to 2005; or if they were new to  farming in 2000‑02. By ‘special circumstances’, RPA meant reasons that would  have reduced farmers’ payments in 2000-02 to below their usual level.

RPA’s  appeals champions

  1. RPA had set up a network of appeals champions to deal  with claimants’ representations about their SPS decisions. On  8 July 2004 the manager of RPA’s chief executive’s office emailed the  nine people who had agreed to take on the role in their area – more were due to  be identified. Among other things, he said:  
    ‘You should be  aware that our aim is to keep the number of cases that are escalated to the  formal appeal procedure to the lowest possible level…we currently receive a  little over 120 IACS stage 1 appeals per year. It is possible that we will  receive well over 2000 Stage 1 cases appealing against decisions that arise  from the entitlement exercise and moorland land appeals.’

    He  said this was manageable and RPA were appointing staff to look after the extra  work, but any growth in the numbers would make it very difficult to resolve the  appeals about farmers’ reference amounts in time for SPS payments in 2005. He  explained how the appeals champions could help, for example, by identifying  potential appeal cases locally and giving staff guidance on them.

  2. On 27 and 28 July 2004 an official in  RPA’s CAP reform implementation team noted that: 
    ‘We are getting  anecdotal evidence from many different sources that advice being given out by  RPA is inconsistent … I know from my personal experience at shows that many  farmers think the area farmed in the reference period has some relevance here [to the land declared in 2005] and can  see why it could be causing confusion with both farmers and some of our less  experienced staff.’

    The  CAP reform project head at RPA responded:  

    ‘The moment you  try to set this out the questions start to tumble out … Happy to get something  broad out [to farmers] as suggested  but we need to start to write up the detail … . That is what the industry wants  and the[y] will continue to play this game, pressurise  the helpdesk and anyone else they can. We must bite this bullet now.’
  3. In August 2004 RPA ran a claim form seminar in  Coventry with some farmers. At this stage RPA planned to stay in touch with  this group of farmers while they worked on the form design. We have not seen  any papers setting out how this work continued, but the papers we have seen  show that work on the forms proved difficult to complete as fast as RPA and  officials across the UK needed.
  4. In September 2004 RPA’s Rural Land Register went  live. RPA had intended it to start in April 2004. The Rural Land Register  was fundamental to the SPS process because SPS claims were based on land area.  EU Regulations adopted in July 2000 had introduced a requirement for a  digitised Rural Land Register from January 2005. After the Register went  live, RPA found that many more people wanted to register land than they had  expected. Farmers found that they had repeated problems in obtaining accurate  maps from the Rural Land Register.65
  5. An October 2004 progress report to Ministers66 mentioned progress on the claim form. It noted that RPA were now past the point  where they could make changes to the claim form and still issue pre‑populated  forms to farmers in March 2005. The form needed to go to the printers in  January 2005. The report said: ‘The  fallback is to send out blank SPS claim forms, but this would create more work  for farmers (who already face an increase in the size of the form compared to  IACS) …’. We have not seen any papers which explain exactly when RPA  changed their timetable for issuing forms from January 2005 to March 2005.
  6. The same October 2004 progress report to  Ministers noted that: ‘There are still a  number of issues which need to be resolved to finalise the scope of the IT  systems being built. These are mostly dependent on decisions by the Commission’.  The papers we have seen show that the senior management responsible for  oversight of this work had decided to continue with RITA for the 2005 SPS  because RPA had found more flexibility within the RITA schedule and because of  the supplier’s confidence about meeting milestones and progress in other  related areas. RPA also had scope for an emergency option to allow payments to  be made if RITA suffered a major delay. The flexibility in the schedule was  based on completing different parts of the system ‘just in time’ for  each step in processing 2005 SPS claims. In theory, that would mean staff being  able to start to key in information from claim forms from April 2005 (four  weeks earlier than planned); being able to start validation cross-checks and to  select claims for cross compliance inspections at the end of April 2005;  and being able to start work on entitlements, claim value calculation and  payment from July 2005.
  7. In November 2004 RPA and Defra officials had  significant timing problems to manage. For example, the papers we have seen  refer to the effect of recent changes to and clarification of SPS policy on  RITA design; slippage in the timetable for sending farmers their claim forms;  and the chance that they would miss the legal deadline of 16 April 2005 for  sending forms to farmers. It was also in November 2004 that RPA introduced  their SPS appeal procedure.
  8. In December 2004 RPA started the second phase of their  work to inform people about SPS.67 This phase started with an RPA presence at the Smithfield Show and went on to  include seminars for stakeholders (such as farmers’ and landowners’ bodies) and  a national series of 32 ‘first come first served’ seminars in February  and March 2005 about SPS, which 8,500 farmers attended. RPA also made DVDs  of the seminars for farmers’ groups to distribute to members. The first phase,  in summer and autumn 2004, had used press announcements and direct mailing of  information brochures to tell farmers about policy decisions as they were made.
  9. RPA staff have told us that, during 2004, RPA’s  management board ‘put in a plea to the Minister’ to postpone the introduction  of SPS. They said the message they received was that there was no intention to  defer and no option to postpone. In the papers we obtained from Defra and RPA,  we have not seen any documentary evidence to show this plea being made.
  10. On 7 January 2005 an NFU email gave NFU local advisers  and directors an update on what they had been doing about the Rural Land  Register. The email began: ‘We have been  raising the RLR issue with Defra and the RPA at every appropriate occasion’. The email summarised the current position on the different problems faced by  farmers in obtaining maps. It also said that RPA were concerned by the amount  of new land being added. It said: 
    ‘We have stated  that it was unacceptable for the RPA to accuse farmers for not putting all their  land on the IACS forms to date, irrespective of the underlying IACS  regulations, because the RPA/MAFF [Ministry of Agriculture, Forestry and  Fisheries, which preceded Defra] have  accepted the position for years.’

Final  preparations for accepting SPS claims – January to May 2005

  1. On 12 January 2005 RPA managers discussed, in writing,  the preparations for looking after SPS claims. They had assumed that each staff  member would process 10 claims a day and that the initial checks on  receipt of a claim entailed looking at 5 data fields. On  24 January 2005 RPA asked farming bodies, such as the Country  Landowners’ Association (as the Country Land and Business Association was known  then) and the NFU, to comment on the draft SPSHandbook – by the  end of Thursday 27 January. They apologised for the short deadline.  Within RPA and Defra, the person responsible for the Handbook had a circulation  list of 18 people for comments. Among other comments (which covered 11 pages  and supplemented previous comments made on the claim form), the NFU asked:  
    ‘What can the  RPA customer expect from the RPA in terms of help with completing the forms?  Will there be a facility for hand delivery and checking – presumably at the  current RPA processing sites, plus Worcester and Newmarket?’

    The  papers we have seen do not include any response from RPA to the NFU’s comments.

  2. On 27 January 2005 RPA officials gave  Ministers a further progress report. Among other things, they said that the  statutory instruments for SPS were on target to be laid before Parliament at  the end of the month; the SPS claim form had been finalised; the explanatory  notes (the Handbook) would be in ‘near  final form’ by the end of the month; and a run of 32 regional SPS roadshows  for farmers would start on 1 February 2005. They also commented on  the RITA testing and said: 
    ‘The CAPRI68 board considered issues on testing at  January’s Board [meeting], including  the experience of the Accenture test team and ensuring proper transparency on  progress. Actions are in hand in this area.’
  3. On 2 February 2005 a Defra official emailed colleagues  about the latest EU consolidated Regulations and their definition of permanent  pasture. It was different from the guidance previously published by Defra based  on their understanding at the time. Officials noted that RPA should be prepared  for some errors in the calculation of set‑aside flowing from the earlier  guidance.
  4. A further deadline for comments on a draft of the SPS  Handbook was on 7 February 2005. Many of the points made were about using  precise and consistent language. A member of the legal team said:  
    ‘For example, in  the introduction in some instances we talk about cross compliance  “requirements” … and in others cross compliance conditions … or eligible  agricultural land, eligible area or eligible land or eligible hectares.  Activate in some instances is explained as claim payment against that  entitlement … make a claim upon and use … I think we need to be consistent in  terminology and phraseology throughout or we will confuse the reader.’

    In  the main, these suggestions were not implemented in the final version of the  2005 Handbook.

  5. On 24 February 2005 officials gave Ministers a further  progress report. They said all the key policy decisions had been made and the  statutory instruments would take effect on 1 March 2005; they would  send out pre‑populated claim forms by 4 April 2005 and the guidance  notes were completed; a sample claim form had gone out on 16 February 2005; and  up to 350 farmers had attended each of the 16 regional roadshows (in which RPA  had talked through the claim form) held so far. Officials also updated  Ministers about the RITA testing timetable, which they said looked tight.
  6. RPA’s customer service centre had opened on  14 February 2005. In the same month RPA published the SPS Handbook.  The customer service centre was initially unable to deal with the number of  calls it received, which peaked at 12,000 per day. RPA have told us that call  numbers rose from 900 a day in February 2006 to more than 7,000 a day in  April and May. The service centre expanded its opening hours and call answering  capacity in response. Also, the task-based RITA computer system meant RPA staff  could not give callers an overview of their claim.69 The RPA chief executive at that time has said that he recognised that moving to  the customer service centre approach was going to be ‘a hell of cultural change to customers’.70 Part of the culture change reflected RPA’s move to having a smaller number of  offices and a telephone-based customer service centre, instead of having nine  regional offices accepting and processing claims. This removed the geographical  link between claimants and the processing office.
  7. RPA also had difficulty recruiting staff for the call  centre. Later in 2005, RPA’s 2004‑05 Annual Report would say:  
    ‘We accept that  there are lessons to be learnt in dealing with the new customer base, in  particular in responding to the near tenfold increase in volumes of enquiries,  which required a move to contingency plans.’

    RPA  have told us that in March 2005 they recruited agency staff and doubled  the size of the call centre. They also outsourced work to BT call centres in  Derby and Shoreditch, where RPA staff supported the operators taking calls.

  8. In March 2005 RPA sent their existing customers  SPS claim forms and explanatory material. In April 2005 RPA  sent farmers on their mailing list a supplement to the SPS Handbook. The  supplement included a list of common errors and one of these was failing to  activate entitlements.

RPA guidance  to staff in 2005

  1. RPA have told us that their system of providing guidance to staff is based on desk  instructions, which are aimed at brand new staff; desk top helpers, which map  the claim process (and originally were without detailed descriptions); and  updates called Briefing Notes provided as needed. A system called IRIS is the  main source of guidance. It distinguishes between the current guidance for each  scheme year and the superseded guidance for each scheme year.
  2. RPA also have a system that allows staff to seek  specific guidance about cases in which they may need to correct a claim. RPA  call this making a defect referral. If the facts of a case differ from the  examples set out in the desk instructions, the processor (in 2005) or whole  caseworker (since 2006, as far as possible) completes a form set up to provide  details about the case. He or she sends this referral form to the policy team.  The form is also logged on a database called the SMU (scheme management unit)  referral log.
  3. RPA direct staff to refer any questions through the  defect referral process, which was called the ‘resolution centre’ in  2005‑06. RPA set up a network of RITA delivery experts who had access to the  referral log and, because of that, should have known the familiar issues.  Caseworkers put their queries to policy through the delivery experts.
  4. In March 200571 RPA gave staff guidance on how to deal with customer queries about SPS. Staff  were to refer all queries to the customer service centre in Newcastle, which  would use a ‘knowledge base’ of questions and answers to respond. Staff  could seek further help from the scheme management unit if the knowledge base  could not provide a definitive answer. Some fresh RPA guidance on  18 March 2005 gave examples of written responses to queries. These examples  included a standard paragraph intended to make it clear that the reply could be  different if the person’s circumstances were different or were more complex  than the question quoted in the response.
  5. On 29 March 2005 the NFU emailed their contact at RPA.  They listed nine issues that they believed needed to be addressed in the  forthcoming SPS guide and 102 questions that they had previously sent RPA or  Defra. They said most of these questions were still unanswered.
  6. On 6 April 2005 RPA announced that they were sending  out pre‑populated claim forms for SPS 2005 and that the claim packs included a  copy of the SPS Handbook. The press release also said: 
    ‘To date 2051  completed applications have been received. However RPA has had to return 23.3  percent of these mainly because customers have failed to sign each completed  part of the form. In most cases it is the Field Data Sheet that has not been  signed. Customers are urged to read back over their form and the Guidance Notes  to satisfy themselves that the form is accurate and complete before returning  it to RPA.’
  7. The 8 April 2005 edition of Farmers Guardian quoted a spokesperson for RPA as having said that: 
    ‘RPA recognises  and apologises for the delays that some customers have experienced in calls to  the customer call centre being answered.‘The numbers  of calls received have increased several fold over the last month and while we  had projected and planned for increased call volumes during the introduction of  the Single Payment Scheme, the call volumes have been even higher than those  projections.’
  8. On 12 April 2005 RPA announced that they were sending  farmers a supplement to the SPS Handbook. The supplement contained a list of  common errors that RPA had found in SPS claim forms and corrections to their previously  published guidance. The list included a reminder that claimants had to complete  column I for establishment and column J for activation on the field data sheets  to receive payment. RPA have told us that they identified the common errors  from their initial checks (see glossary - level 0 validation) on claim forms.
  9. The RPA Chief Executive and some of his officers  attended a session at the NFU Council meeting of 11‑12 April 2005. The  minutes of the Council meeting said:  
    ‘The RPA  explained that they were working hard to change this attitude [an  inflexible culture that attributed all errors to the farmer] and to improve customer service and the  accuracy of information captured. They agreed that cases of genuine famer error  would be recognised and the RPA would try and be flexible with errors.’

    The  NFU also kept a more detailed note of the session for circulation to their SPS  information list. This note said that, in response to the NFU’s account of the  problems their members were having, RPA apologised. An RPA official also spoke  about: ‘the issue of obvious error  provision and the issue of delayed IACS 22s’. The note does not show RPA  making any specific promises to be flexible. In commenting on a draft of this  report, the Defra Permanent Secretary said:  

    ‘At this point  removed from events, it is very difficult to know what was said on those  occasions, but the belief of those involved within RPA and Defra at the time is  that staff were invariably careful to make clear that while the Agency would be  as flexible as possible, this was in the context of the legal provisions,  particularly obvious error. The NFU in particular would have known that there  were limitations on the flexibility. While we cannot vouch for every  conversation, I do not believe, therefore, that messages given at the time were  mis-leading.’

    She  also said: ‘Our view is that the Agency  demonstrated in practice the flexibility that was suggested by messages given  at the time’.

  10. NFU Council delegates raised several concerns: the  difficulty of getting through on the RPA Helpline; the absence of support for  SPS claimants from RPA and Defra; examples of conflicting or bad advice from  RPA on special entitlements among other things; concern about FVP  authorisations; and the risk that two farmers might claim for the same piece of  land. The NFU President had summed up the meeting: ‘by saying that it is the fear of making a mistake and being penalised  for this largely one‑off issue’. We also spoke to officials from the NFU  about their recollection of the implementation of SPS in 2005. They told us  that the sentiment from the RPA customer service centre in 2005 was just to get  the form in to RPA. Staff on the helpline tended to give a comfort message –  that things would be all right at the end.
  11. On 25 April 2005 a member of RPA’s legal  team minuted the CAP reform project head at RPA, summarising the current legal  position on missing data in SPS claim forms. He said: 
    ‘One point to  note is that in my opinion, there is no legal obligation to return forms at  all, or query incomplete data. It is really incumbent on the applicant to make  sure they enter the correct details. However from a policy perspective there  may be a customer service driver that encourages RPA to do its best to ensure  that as many eligible applicants as possible apply to the scheme. There is also  a slight risk of challenge if an applicant is not queried in relation to an  inconsistency with his or her application i.e. they may claim that the form was  confusing or misleading.’

    In  commenting on a draft of this report, the Defra Permanent Secretary said that  this was the opinion of one lawyer, not a collective view. She said:  

    ‘The collective  view in the Agency was that there was no anomaly as, in seeking to establish  entitlements, the claimants had submitted a valid claim and the option not to  activate those entitlements was a legitimate one.’
  12. On 29 April 2005 a Farmers Weekly story described farming industry accounts of being given contradictory or  incorrect information by the RPA helpline. The story quoted an RPA spokeswoman  as saying: 
    ‘As with  previous schemes, RPA will of course use the obvious error provisions but if  farmers have particular issues about their application, they should send in an  accompanying letter setting out the necessary details. Customers are advised to  keep a copy of their application form and the covering letter for their records.’

    Earlier  in April 2005 Farmers Weekly had published stories reporting RPA’s  advice that farmers should not wait to receive completed land registration  details before submitting their 2005 SPS claims and farming agents’ concerns  about the quality of information from RPA.

  13. On 11 May 2005 RPA published a note on their website  with a list of common reasons why they had returned forms to claimants. They  said applicants had made amendments, but not initialled and dated the  alterations; had not signed the declaration on Part S; had not completed  questions 2 and 4 about the establishment and activation of entitlements  subject to special conditions; or had not completed at least one line entry on  the field data sheet. In brackets, they added that applicants must complete  columns I and J (on the field data sheets) if they wished to declare and claim  land.
  14. Monday 16 May 2005 was the last day that RPA  could accept a 2005 SPS claim without imposing late claim penalties. RPA told  the farming press that they had received 116,322 claims. They also said, about  the accuracy of the information given out by the helpline, that ‘scope for inconsistency’ had been  introduced because the information provided to RPA operators had been updated  regularly. The Agency were reported to have accepted that ‘there were lessons to be learned in dealing with the new customer base  – which looks to have grown by about 20,000 farmers – and in particular in  responding to large volumes of enquiries’.72 The same story quoted Tim Bennett, the NFU president at the time.  
    ‘Mr Bennett said  bearing in mind the process had been “less than perfect” the agency had to show  flexibility as it processed applications. “We know that there will be some  errors and we need common sense when genuine errors are being dealt with. We are demanding flexibility and we don’t  want to hear the agency say ‘We can’t do this’”.’
  15. RPA carried out initial checks on the forms as they  received them. These checks were intended to ensure that each claim had enough  information on it to be lodged as a valid claim. This was Level 0 validation.  But RPA were unable to start keying in the claims for three weeks because of  initial problems with the high volume data capture (HVDC) system used to do the  work.73 The initial checklist for Level 0 validation was part of the desk instructions  for staff. Version 4.1 of the checklist said: ‘This check covers the form SP5a and must establish that the  application: shows name and address details; has been signed and dated’.
  16. The checklist questions were about the identity of the  farmer; the farmer’s individual elements of SPS and other relevant schemes; the  field data sheets; the signature; and the declaration. The minimum requirement  in the section about the elements of SPS and other relevant schemes was for the  farmer to have ticked yes to the question: ‘Please  confirm that you are applying to establish entitlements for the areas that you  have entered in column I of your field data sheet’, or to have completed column I on the field data sheet (SP5b); or to have ticked yes to the question  about confirming that he or she was applying to establish special entitlements; or to have ticked yes for any box in  the column on the common land field data sheet that asked whether the farmer  was establishing entitlements for those rights; or to have ticked yes to the question about the area payment for  nuts, or about aid for energy crops or about protein crop premium or about hill farm allowance.
  17. On 20 May 2005 an RPA spokeswoman spoke to a farming  reporter for a story about the 31 May 2005 deadline for amendments to  SPS claims.74 She was quoted as saying:  
    ‘The most common  mistake is where farmers haven’t actually indicated they want to establish  their entitlements. Some first‑time applicants, such as horse owners, haven’t  known what their field numbers and national grid references are. If the claim  is invalid, where basic information has not been supplied, such as not filling  in the name and address section or where information has not been supplied  about actual fields or where the forms have not been signed, we are trying to  contact the applicant to let them know so they can rectify it.’
  18. RPA’s targets for  the 2005‑06 business year targets, announced in May 200575,  included:
    • ‘commence payments under the single payment scheme by  February 2006 and … process and pay 96 per cent of valid SPS claims by value by  31 March 2006’; and
    • ‘process and pay valid claims with at least 98.5 per cent  accuracy.’
  19. On 24 May 2005 the Executive Review Group met. Among  other issues considered at the meeting, RPA’s operations director explained the  process followed when RPA received forms. The meeting also noted the HVDC  problems which had led to a three-week delay in logging forms on to RPA’s  database. In June 2005 the working group responsible for communication  about SPS revisited the communication strategy. RPA had planned for minimal  communication needs from June 2005 to the 2006 payment date. The group  acknowledged that was no longer realistic.
  20. On 19 July 2005 RPA published their Annual Report and Accounts 2004-05 (the  2004-05 Report). It said:  
    ‘RPA is  currently facing considerable difficulties in carrying out its prime directive:  the implementation of the SPS by February 2006 … Data processing of  applications and the determination of claimants’ entitlements have been  affected by a combination of factors.’

    It  referred to the high volumes of SPS claimants and late requests for changes to  land registrations; the poor performance of RPA’s Rural Land Register;  incomplete claims; a huge number of customer enquiries about claims; and the  three‑week delay in establishing a stable platform to record SPS claims. The  2004-05 Report said RPA’s mitigating action had successfully dealt with the  effects of those difficulties. But it also acknowledged that they were working  to a very demanding timetable for delivery of SPS.76 The 2004-05 Report also said that RPA’s redundancy plan (‘Exit 1’, RPA have  said that this was a voluntary exit plan rather than a redundancy plan) had  reduced RPA’s skills in the short-term. It described how they were dealing with  that. The 2004-05 Report also summarised the expected benefits of RPA’s change  programme. They included: ‘Electronic  management of documents, including automated case management and workflow  controls’ and

     ‘Centralised  information that will be available to any authorised user or system within the  Agency to view that information, including a single repository of customer  information and a single land register.’

    RPA’s  annual reports also gave RPA’s staff numbers, which RPA had intended to reduce  under their change programme. The number of permanent RPA staff fell from 3,690  in 2003‑04 to 2,666 in 2006‑07. But the total number of staff rose from 3,996  to 4,467, because of the numbers of short‑term and agency staff recruited.77

  21. On 9 September 2005 the Executive Review Group  met. Among other things, RPA reported to them that, since the most recent  release of RITA, there had been problems. By 22 August 2005 it had  become possible to have 600 users on RITA at the same time as 115 in the  customer service centre and 75 in the Rural Land Register and RPA said the  situation was improving. There were about 1,000 staff filling the system  maximum of 600 concurrent users. Overall, about 1,400 staff were covering the  850 total concurrent users that the system could support. The estimate was that  RPA needed capacity for 1,500 concurrent users in order to meet their  timescales. As matters stood, RPA expected 75 per cent of Level 1  validation tasks to be complete by the end of September and about 20,000 claims  had completed the full validation process. Entitlement processing could only  begin when Level 1 validation of all claims was complete.
  22. In September and October 2005 RPA produced  guidance to help staff decide whether or not certain mistakes in claims fell  within the ‘obvious error’ regulations. (These are set out in the specific  standard.) RPA have also told us that in late 2005  they conducted an exercise aimed at claimants who had said that they wanted to  activate all entitlements entered in column J but had then left column J blank.  RPA contacted claimants to check their intentions and subsequently paid a  number of them under ‘obvious error’ provisions. From the evidence we have  seen, RPA do not know exactly how many they paid.

RPA’s claim  processing problems come to a head

  1. In January 2006 the House of Commons Select Committee  on Environment, Food and Rural Affairs said:  
    ‘We are deeply  unimpressed by the failure of Defra and the RPA to plan properly for the  process of administering payments under the Single Payment Scheme. This has led  to English farmers being disadvantaged in comparison with those in other parts  of the UK, who have already received a partial interim payment. We were also  dismayed at the complacency of the Minister, who refused to admit that any  mistakes had been made or that anything could have been done differently to  avoid the problems. Most significantly, we were staggered that, so close to the  proposed date for making payments, and nearly a year after that date was  announced by the RPA, the Minister could still not give us a definitive  statement about when payments would be made, or whether they would be full or  partial payments.’78
  2. RPA started making some payments to farmers in  February 2006, but were unable to complete as many claims as they had  expected. On 16 March 2006 the then Secretary of State acknowledged  that RPA would be unable to make the bulk of payments by the end of  March 2006. She said that she had replaced the RPA chief executive with  immediate effect. A National Audit Office report on  RPA, published in October 200679, reviewed RPA’s  implementation of SPS. It said: 
    ‘Implementation  has not provided value for money because the project has cost more than  anticipated and is not fully implemented as scoped, planned efficiency savings  will not be achieved, relations with the  Agency’s customer base have been damaged and there is a risk of substantial  disallowance of expenditure by the European Union.’

    Also in October 2006, the then Permanent Secretary of Defra  gave evidence to the House of Commons Public Accounts Committee. A member of  the Committee asked her: ‘Was the Rural  Payments Agency unfit for purpose between May 2004 and March 2006?’  She replied: ‘Subsequent events suggest  that it was’.80 (I say more about the  National Audit Office and Committee of  Public Accounts reports later in this chronology.)

  3. RPA had given Ministers progress reports on how fast  RPA were clearing validation tasks (see glossary) for SPS claims. Table 1  summarises the figures put to Ministers.

    Table 1: 2005 Single Payment Scheme – outstanding  validation tasks

      
    Date information collected Total number of tasks Approximate number of tasks neither cleared nor already underway
    21/11/05 ‘just short of    500,000’ 440,000
    28/11/05 522,000 443,000
    05/12/05 527,000 436,000
    13/12/05 562,000 433,000
    21/12/05 631,000 484,000
    Not known 662,000 497,000
    11/01/06 687,000 379,000
    17/01/06 708,000 362,000
    25/01/06 712,000 328,000
    31/01/06 713,000 301,000
    07/02/06 731,000 282,000
    13/02/06 c. 796,000 247,000
    21/02/06 c. 807,000 242,000
    06/03/06 c. 802,000 188,000

    Source: Cold Comfort: the Administration of the 2005 Single Payment Scheme by the  Rural Payments Agency.81

  4. On  19 April 2006 the Secretary of State announced that RPA had paid 39  per cent of customers for the 2005 SPS, but they did not expect to make all  payments by the statutory deadline of 30 June 2006. RPA opted to make  partial payments for successful 2005 SPS claims.
  5. The temporary RPA chief executive had attended a  session at the NFU Council meeting of 10‑11 April 2006. The minutes  of the meeting said he agreed that where RPA provided incorrect information on  which a farmer reasonably relied, the farmer should not be penalised. He said  RPA were looking into ways of addressing that.

The 2006 SPS  claims

  1. On 21 April 2006 RPA announced that they  were aware that some 2006 SPS claim forms had gone to customers without pre‑populated  land and entitlement information. RPA said farmers could fill in the forms they  had already received, but they expected to send out pre‑populated forms by the  end of April 2006. RPA also planned to provide blank forms at their  offices and on their website.
  2. On 5 May 2006 the Minister responsible for  RPA announced that late claim penalties would not apply to claims received  between 15 May (the usual deadline for claims) and midnight on 31 May 2006.  This meant that the final deadline for claims, albeit with a late claim  penalty, would be 9 June 2006.
  3. On 8 May 2006 the NFU sent an email update to their  ‘SPS Information List’ about the advice and assistance they had given on  appeals. Among other things, they noted that an NFU member had failed to submit  a full application in error (in May 2005). After intervention by the NFU  and the NFU member’s MP, RPA had allowed the member to correct matters early in  2006.
  4. On 10 May 2006 RPA started making partial  payments of 2005 SPS claims, set at 80 per cent of each farmer’s estimated  entitlement. Also in May 2006, the new Secretary of State appointed a new  RPA Interim Chief Executive, Mr Tony Cooper.
  5. On 9 June 2006 RPA announced that the  deadline for claiming under the 2006 SPS would pass at midnight. They said that  under the SPS  rules, no SP5 forms submitted after 9 June could be considered for payment  in the coming year. Their announcement also said that staff had been ‘concerned with basic errors and omissions on  around 12 per cent of the 105,000 forms received by the end of May, including  missing signatures and blank entitlements and field data boxes’.
  6. On 22 June 2006 RPA announced that they had put  back the date that penalties would apply to 2006 SPS claims from 31 May to  15 June. The European Commission had agreed to amend the relevant  Regulations. This meant that claims made by 15 June 2006 would escape  late claim penalties. Penalties would start to apply from 16 June and RPA  would reject claims received after 10 July 2006.
  7. On 4 August 2006, RPA told staff  that they had allowed a ‘small minority’ of customers to activate their  entitlements under the ‘obvious error’ provisions. They explained the context  and asked staff to revisit similar cases that they had previously rejected. The  guidance invited staff to tell the scheme management unit about cases where  claimants had failed to activate fields and there was a possible inconsistency  in the claim form.82
  8. On 8 August 2006 RPA’s operational  management team discussed the clearance of work on the 2005 SPS, among other  things. They noted that:
    • the aim was to  clear backlogged work by the end of October – they had over 40,000 pieces of  correspondence and over 10,000 appeals and representations;
    • 3,909 cases  affected by dual claims should have the ‘offending’ land parcel removed  where there is no agreement from both parties concerned;
    • a further 6,000  small claims would be ‘auto‑penalised’ subject to discussion of how that  would work in practice; and
    • up to 34,000  cases needed rework.
  9. The operations director noted that they had staff  resource equivalent to 2,043, but needed 2,405 to meet the recommendations for  clearing the 2005 cases. The meeting agreed to focus on 2005 cases until  October and then swap to 2006 cases, while using the whole caseworking approach  to deal with remaining 2005 work.
  10. We have seen minutes, prepared by the NFU, of SPS  stakeholder meetings organised by RPA. A regular agenda item was on unanswered  correspondence. At the 11 August 2006 meeting RPA explained that they  scanned in every piece of correspondence when it reached them and covering  letters were scanned in separately from claim forms. The NFU stated that their  members had sent in series of letters which had not received replies. At the  19 September 2006 meeting, RPA told the meeting that they had cleared  27,000 pieces of claimant correspondence that had been unanswered.
  11. On  15 August 2006 the operational management team discussed the problem  posed by 11,331 claims in which applicants had not activated all the entitlements  they had claimed. The minutes summarised the RPA policy director’s report to  the meeting.
    ‘[The policy director] reported  that there are several thousand claims (11,331) where the applicant has not  activated all the entitlements that they have requested to be established. It  is likely that some of these applicants will have not activated all their  entitlements in error and others will have done so because the land was not  available for the full 10 months required. ‘
    There are a  number of representations from customers wishing to activate all their  entitlements. Cases have been reviewed on the basis of the obvious error  provisions and been dismissed as the form is internally consistent. One or two  cases have been approved as there are inconsistencies such as the summary page  showing one figure but the total of the activated fields a much smaller figure.  A question has been raised as to whether or not it is sustainable to maintain  the current line or whether or not we should accept all representations without  further investigation. This runs a disallowance risk for increasing a claim  after the deadlines for reasons which are not in the bounds of an obvious  error. DARDNI [the Department of  Agriculture and Rural Development for Northern Ireland] follow the line that RPA currently takes.
    ‘The legal  position is that the Commission produced a working document (CWD) AGR  49533/2002 on obvious error but did not reissue specifically for the SPS  regulations. Article 19 of Regulation 796/2004 which states “without prejudice  to Articles 11 to 18, an aid application may be adjusted at any time after its  submission, in cases of obvious errors recognised by the competent authority”.  However, misunderstanding scheme rules is not the basis for obvious error. The  one key requirement is that there is an inconsistency in the application form  that would give rise to a suggestion of obvious error.
    ‘Outside the  obvious error provisions described above, a claim can be amended upwards but  only until the 10 June as that was the latest date for a claim to be submitted  in 2005.
    ‘Legal advice  is also that, if we were to concede these cases there would be a strong risk of  disallowance from the Commission. In addition, they believe we would have a  strong case if challenged by the industry on these cases due to the lack of  legal cover to amend all these claims upwards. It has been suggested by the CLA  that Article 68 of Commission Regulation 764/04 could be used to add to a claim  after 10 June. However, our own legal advice is that this provision exists only  to disapply reductions and/or exclusions (i.e. penalties) where these would  otherwise apply. The Article cannot be applied in the way suggested by the CLA.
    ‘OMT  recognised that to review each claim on a case by case basis would be a lot of  work. They agreed further work should be undertaken to look specifically at the  following:
    • The size of the fund value affected
    • The size of the land affected
    • The various categories of representations that have  been made
    • What the Devolved Administrations are doing with this  issue
    ‘It was noted  that the 2007 form had been changed to automatically tick the columns to  activate entitlement on established entitlement and it would be down to the  farmer to clearly indicate if he wanted to deactivate it.’
  12. The 22 August 2006 operational management team meeting  heard that the Scottish and Welsh devolved administrations said they had: ‘stuck rigidly to the line that claims could  only be amended up to 10 June and also upon evidence of an internal  inconsistency that would allow for an obvious error decision’. At this  point, RPA had received seven appeals from among the 11,331 cases. They said  the partially activated cases covered 93,876ha with a value of €2.5m (sic). The  minutes of the same meeting had an update on progress in work on the 2005 and  2006 SPS claim processing. Among other things, they noted the following:
    • they aimed to  have paid 98 per cent of 2005 SPS claims by 31 October 2006;
    • 200 people were  working on the backlog of 2005 SPS correspondence, with the aim of clearing the  30,000 correspondence backlog by the end of October;
    • RPA needed to: ‘consider whether we should be writing off  old letters’.
  13. In September 2006 RPA’s then policy director gave  the operational management team a further update on the 2005 claims that had  not been fully activated. The minutes of the 5 September 2006 meeting said: 
    ‘[The policy  director] put forward a paper [which  is at Annex D of this report] on how to  deal with the 11,331 claims where the applicant had not activated all the  entitlement they had requested to be established. The question has been raised  about whether RPA should assume this is how the customer wanted to complete  their form or treat them under the ‘obvious error’ provision and if the lat[t]er whether this should be done as a blanket  exercise or after a review of each case. Taking into account the legal opinion  and the operational impact it is difficult to justify an approach which does  not test the intention of the claimants against the guidance on obvious errors,  however, should OMT decide that such an approach is required for reputation  reasons then it would need to be referred to the Disallowance Working Group for  their advice on the disallowance risk. Work is also needed to assess the amount  of resource needed to deal with this extra work.’

    The following week’s meeting of the operational  management team noted: ‘Further work is  being carried out to see if there is any more we can do to stretch the rules  past obvious error’.

  14. On 10 October 2006 the operational  management team considered the paper on the options for dealing with the  partially activated claims (see Annex D). The minutes recorded the discussion  as follows: 
    ‘The paper explains that there are 11,331 claims where the applicant has  not fully activated all the entitlements that they have requested to be  established.  Examples are given of the  types of cases that are covered. There is latitude within the  regulations to deal with cases where of “Obvious Error” but from an  understanding of how it has been applied to date, there are still a significant  number of cases not covered by “Obvious Error”. RPA face the situation of  refuting a number of claims.
    ‘The three possible options were covered:
    ‘1 Continue to just deal with the representations and appeals related to this issue  and not take any further action.
    ‘2 Have a common blanket  acceptance of all of the cases. This will be a high disallowance risk and the  Agency would be pushed to also accept everything in the future. This option would be a clear and obvious breach of  controls.
    ‘3 Use the obvious error  guidance and take a judgement on individual cases where we believe the customer  deserves a payment due to an error/misunderstanding. This will restrict the disallowance to those particularcases. The downside to this option is that it is resource intensive and  would require high quality staff. There is also the same problem as with option  2 in that stakeholders will always be pushing boundaries by using precedence of  cases that were accepted in the past.‘There is no clear obvious route for dealing with these claims. The recommendation in the paper was to take forward option 3 although there was  recognition of the resource implications.

    ‘The main points of discussion were:

    • The question was asked as  to whether the value of the unactivated entitlements was known as it would give  an indication as to whether the payment ceiling could be breached if all the  unactivated claims were paid.
    • By undertaking option 3  there is a risk that it would be difficult to draw a line under those claims  that would be paid and those that wouldn’t and that the boundaries could be  pushed back to a level where there was no control.
    • The attraction of relying  on the form (i.e. option 1) is that it’s objective and you don’t have to judge  whether or not a farmer is sincere when they claim that they made an error when  filling the form in or that they misunderstood the form. It is more  straightforward to just stick to what is detailed on the form.
    • A blanket acceptance of the  claims (i.e. option 2) cannot be done as the non-activation of some  entitlements is intentional in a number of cases.
    • It was calculated that it  would take a minimum of three weeks (based on 0.5 days per task) to work on  11000 cases which is a resource that the agency cannot afford to remove from  on-going SPS processing.
    • How this is handled in the  future needs to be looked at and we have until the 10th June 2007 to  make any reforms to the process.
    • One option would be to  phone the customer if there is only partial activation of entitlements on the  form but would have to ensure that RPA are under no obligation to do this. It  was noted, however, that this could produce a dependency culture where  customers relied on the Agency too heavily to correct their forms.
    • Another option would be to  assume that everyone wants their entitlements activated and the form should  include a tick box to say that the customer does not want their entitlement  activated. However, it was mentioned that this approach was used with HFA  claims and it led to more errors as people ticked the boxes by mistake.
    • It was suggested that there  could be an option of saying to the customer that if the form is submitted by  an earlier deadline, then the forms would be checked for errors, although it  was thought that this would take up too much resource.
    • A routine should be  produced to be able to run a query on the database to find all the SBIs where  the entitlements have not all been activated.
    • The recommendation by OMT  was to go with option 1 for 2005 claims because option 3 would generate a  resource drain that the agency cannot afford as we are still closing 2005 and  making the transition to 2006. The suggestion is to just leave claims are they  are at the moment and deal with the subsequent reps and appeals.
    • By not looking at cases  where the customer believes they have made a mistake might cause bad press for  the RPA, however it is too late for 2005 claims but should make an effort into  reforming the process for 2006.
    • A recommendation for 2006  would be to only phone the customer if it looked like there was an obvious  error with the form but not to just phone up for any anomaly.
    • Another recommendation was  to update the guidance to reemphasise the point about activation of  entitlements.
    • It was hoped that analysis  of the 2006 data should show a trend where non-activation of entitlements are  reducing as people get used to the system and the 1st year issues  don’t apply anymore.’
  15. Also on 10 October 2006 RPA’s operations director  circulated his own note of that day’s operational management team meeting.  Under the heading ‘2005 SPS claims with partially activated entitlements’,  he said:  
    ‘[…] All of the  options for addressing these cases will require manual effort and carry  disallowance risk. I suggested that any manual effort will reduce our focus  around remnant 2005 claim processing, and the transition to 2006. I therefore  proposed that we hold a firm line and do not review individual cases. This was  agreed, as was an intention to check on the number of representations and  appeals resulting from this decision.’

    (He  nominated an officer to ensure that RPA separately identified those cases.)The operations director also nominated  officers to follow up on work to address the partial activation position for SPS  2006 and 2007. (In 2007 RPA started sending farmers what RPA called ‘nonpay  letters’ if RPA checks found the farmer had omitted to activate any  entitlements. The letters told farmers they would not receive a payment without  activating the entitlements. RPA have told us that farmers who receive a nonpay  letter can change their claims up to 31 May without penalty.)

  16. On 18 October 2006 the National Audit Office  published its report on SPS.83 It said: ‘The Agency encountered  difficulties in processing payments due under the scheme, totalling around  £1,515 million, and failed to meet its own target to pay 96 per cent of  that sum by the end of March 2006’. The report said Defra and RPA had not  fully appreciated the risks of what they were attempting with SPS, partly  because the key people involved lacked a common understanding of the SPS  requirements and customers’ likely behaviour. The report also said that  implementing SPS at the same time as the RPA’s change programme (which entailed  job cuts) meant RPA lost the knowledge of too many experienced staff.
  17. On 30 October 2006 the then Permanent Secretary of  Defra, the then Interim Chief Executive of RPA, and other officials, gave  evidence about the administration of the scheme to the House of Commons  Committee of Public Accounts. When asked by the Committee Chairman why the  administration of the scheme had been a ‘complete  failure’, the Permanent Secretary replied: 
    ‘As the National  Audit Office Report highlights, problems with the mapping were probably one of  the key challenges. There was a vast increase in the number of mapping changes,  which had either not been previously reported or were produced – incentivised –  by the new scheme.’
  18. In October and November 2006 RPA’s operational  management team discussed the action they could take to make sure farmers  activated their 2007 and 2008 claims as they intended.
  19. In November 2006 RPA and Defra officials  exchanged emails about the possibility of amending a land use code on a field  data sheet of a claim form. This problem was a factor in a number of appeals.  There were competing views on whether RPA could accept a correction to a claim  in the circumstances – in these cases there was no clear remedy within the  regulations. The Defra official, who was also RPA’s director of policy,  responded on 10 November 2006. He said: 
    ‘The principle  is clear. Unless there is an inconsistency in the way the form has been  completed which can trigger the current obvious error guidelines and lead to  acceptance, we have no option but to reject. The paper on possible acceptance  of representations based on a misunderstanding was turned down by OMT on the  grounds that a rethink leading to acceptance of such representations now would  lead to revisiting cases and triggering a rush of new representations, which  could divert resources back to the clear‑up of 2005 cases.’

‘Haunted’  by partial activation cases

  1. On 8 December 2006 the acting head of RPA’s legal team  exchanged emails with the Defra official who was also RPA’s director of policy.  They discussed what they called the ‘“misunderstandings”  cases’. The acting head of legal explained that the RPA Interim Chief  Executive: ‘was finding it difficult to  sustain the arguments for keeping the “hard” line’. She said that, at the  operational management team meeting that discussed the misunderstandings paper,  there had been an expectation that RPA would revisit the partial activation  issue in the new year. She said the Interim Chief Executive wanted it to be  considered before then. She mentioned the difficulties of conceding only on  cases where the farmer had challenged RPA’s decision. She said: ‘The main point that is haunting us  (particularly [the Chief Executive]) is  the recurrent question of “Why would a farmer have signed an SP5 if he did not  intend to establish/activate entitlements?”’. She acknowledged the counter‑argument,  which was that this was what had happened in the pre‑SPS scheme. But she also  pointed out the further argument that the misunderstandings were in the first  year of SPS and the result was disproportionately harsh on farming businesses.  She suggested a fundamental reappraisal based on: ‘If we were setting this up now for 2005, but knowing what we now know’  and asked whether the policy director wanted to mention the issue to the DWG (Disallowance  Working Group) later that day.
  2. The RPA policy director replied:  
    ‘The difficulty  with doing this on any other than a case by case analysis of representations is  that this is how we have handled obvious errors cases. The reappraisal you suggest  would cause us huge difficulties in terms of opening up cases where we thought  the lack of representations meant that the farmer was reconciled to his fate.  As well as live representations, we would need to revisit cases rejected under  the obvious error guidance. I will raise it this afternoon.’

The  RPA’s acting head of the legal team replied: ‘Can I just confirm that this was not actually my idea, but I think we  all anticipated the mounting pressure [the Interim Chief Executive] will be under’.

  1. We have seen no evidence of what happened after this  email exchange. Defra have told us that they and RPA  have no further records or emails on this issue.
  2. In January 2007 the previous Chief Executive of RPA,  Johnston McNeill, gave evidence to the House of Commons Environment, Farming  and Rural Affairs Committee. Among other things, he said that, on reflection,  he did wonder why it had not crossed his mind that there would be a problem if  RPA lost staff with experience in dealing with farmers when customer relations  were going to be so important. He explained that they were aiming to fill that  gap by giving farmers the information they needed by internet – the system  would have told farmers where things were going wrong in their claims.

RPA start their recovery plan

  1. At  the end of January 2007 the operational management team discussed the  payment schedule for 2006 SPS claims. They noted the political imperative to  start payments  from the middle of February 2007 and the practicalities of achieving that.  In February 2007 they discussed progress on 2006 SPS payments and RPA’s  recovery programme. The minutes said RPA’s three business priorities for  recovery were: ‘effectiveness, i.e. getting payments out more  quickly and accurately, customer service/focus, efficiency and reducing costs’,  in broadly that order. However, they said there wassevere pressure from Defra to reduce costs.
  2. In March 2007 the  Office of Government Commerce, which had been involved in providing advice on  RPA’s project planning, published a report called the Rural Payments Agency (RPA) Change Programme  2001-2006. Its analysis included the following points. 
    ‘The Agency  vision was basically sound, even if it has the hallmarks of management  consultancy thinking and is not particularly differentiated from many others.  From the outset however, the RPA agenda reflected a tension between its  customer-focus ambitions and the proposed operational design, including the  withdrawal from face to face contact and the move to a centralised “factory”  style of operation. Other aspects of the tensions implicit in this approach  (for example in the Agency’s role as a regulator, through its Inspection  function) were not explored or understood in any great detail.
    ‘From late 2003  through to late 2004 a series of decisions were taken which, in aggregate,  invalidated most of the assumptions on which the programme’s scope,  deliverability and benefits had been predicated. By the end of this period,  most if not all of the original objectives (being customer focussed; having a  flexible generic system; data being captured primarily through electronic  channels etc) were so compromised that the emerging picture was almost  diametrically opposed to the vision and indeed to some of the precepts on which  elements of the system design had been based.
    ‘It might have  been an acceptable risk to remove from scope features such as the model office  and ad hoc management information, and to play down the need for staff support  such as on-line training, when it was still assumed that RITA was basically  replicating existing known legacy schemes and processes. However, their absence  posed critical risks in the light of the way SPS actually developed. These  risks were compounded by the loss of experienced operational staff through the  exit programme.
    ‘From an  external perspective, SPS was characterised by many of the pressures that have  created difficulties in other high-profile launches of new government policies  - a fixed end-date; delays in finalising the (often critically important) low  level detail of the policy, and levels of complexity and novelty in the final  version of the product which were not anticipated at the beginning. Although  the programme team did well to maintain momentum by documenting and working to  a set of assumptions about the way the regime would work, not all of these  assumptions held good.
    ‘Internally,  there were tensions in the relationships between the main parties. For its  part, RPA believed that the policy team was not giving sufficient weight to its  concerns about deliverability, while the policy teams did not feel that RPA was  providing a sufficiently well-defined problem and options statement to allow  them to challenge ministerial or EC pressures. Within RPA, there was an  additional lack of clarity between the business areas and the programme team,  the net effect being a lengthy and highly intermediated communication line  between policy and system developers. An external review carried out in July  2004 noted that additional work was required to build confidence and trust  between the policy and delivery teams. These relationship tensions made  communication difficult at a critical period in the programme.‘Partly as a  consequence of its various interests, and partly due to a lack of appropriate  mechanisms for bringing together and managing trade-offs between the various  pressures, Defra was a source of mixed signals to RPA at critical decision  points in the programme. The most significant example was the continued  pressure to meet cost reduction targets and minimise the likelihood of EC  Disallowance even after it had become clear that delivering SPS on time had  become the new top priority and that system functions expected to deliver  efficiency gains had been postponed or de-scoped. Whilst the message from the top  of the office in Defra was that RPA should strike a balance between the  disallowance risk and SPS delivery and that efficiency target conflicts could  be escalated to Defra, this approach was not consistently recognised in RPA.
    ‘Much of the  commendable emphasis at the planning stages on customer focus and engaging with  the concerns of front-line staff could not be readily accommodated as part of  the pervasive drive to make payments to the farming community within the window  December 2005 to June 2006.
    ‘Provision for  taking claims and interacting with customers on-line (the ‘e-channel’) had been  a key feature of the original planning, not least because the data could be  subject to preliminary validation in ’real-time’ and would then be used to  initiate the workflow process. Time constraints and the high risk of diverting  resources to its implementation resulted in e-channel being postponed. As  repeated modifications were made, including the setting-up of a customer  contact centre and the decision to revert to a paper claim form, the business  process diverged from the original vision. The absence of the e-channel  heralded the move away from customer-led service to back-office tasks where the  farmer could not discover who was handling the claim. The difficulty of  obtaining up-to-date information on progress of a claim contributed to the  overall problems.’
  3. Also in March and April 2007 members of RPA’s  operational management team ‘adopted’ some difficult SPS cases to help them  understand the RPA’s poor performance  in responding to Ministerial correspondence. For example, there were 498 ‘very  urgent’ cases, which RPA had had for more than 90 days. They noted how long it  could take to obtain advice on a case; that it could take seven days for  correspondence about a case to reach a processor; and that caseworkers were not  able to track the progress of tasks so that they could follow up on outstanding  work.84
  4. In March 2007 the House of Commons Select Committee on  Environment, Food and Rural Affairs, in its report on RPA’s work on SPS, said: 
    ‘The seeds of  failure were sown a long time in advance of the final debacle, and many  problems were evident even to outsiders well before March 2006. The RPA used a  “task-based” approach to dealing with claims which was fundamentally unsuitable  and also hindered the Agency’s own understanding of the degree of progress it  was making in dealing with claims. Defra’s policy choice of a “dynamic hybrid”  basis of payment was complex and very high risk, and the RPA warned Defra  repeatedly of the risk involved. Defra was more committed to the principle of  total decoupling than to the practicalities of implementation. The Defra  leadership was at fault for taking the RPA’s statements that implementation of  the model to deadline was “do-able” as an adequate basis on which to pursue  such a risky course. Nevertheless Defra pursued its chosen policy and the  Agency was given far too much to do in too short a time. Until the last moment  the RPA was optimistic that it would after all meet its targets, but  unfortunately this was because it did not properly understand its own business  processes or the likelihood of success.’85

RPA try to  put things right – 2007 to 2008

  1. RPA continued to revisit cases and policies with a  view to correcting errors and improving performance. On 2 July 2007 the  Secretary of State said that, as at 30 June, RPA had 98 per cent of the  estimated total fund for SPS 2006 to 98.2 per cent of claimants. He  said RPA’s performance had still to improve and their next step would be to complete  work on about 20,000 2005 cases where RPA wanted to review entitlement values.  In February 2008 RPA’s operational management team agreed to increase the  level of checks they did at drop‑in centres.86 RPA’s 2007-08 Annual Report, signed by the chief executive on  14 July 2008, said that at the end of March 2008 their backlog  of unanswered post was under 1,000 cases, compared with a peak of 10,000 cases  in July 2007. RPA’s 2007-08 Annual Report also said: 
    ‘We continue to  change the way we work by moving towards whole case working. Two significant  information technology (IT) system improvements in 2008 will give our case  workers access to most of the information they need about a farmer’s SPS claim …  .’

Handling  complaints in 2009

  1. In March 2009  RPA’s operational management team noted their concerns about the way they  failed to update customers still waiting for a large payment, although RPA had  met their target of paying 90 per cent of claims by 31 March. They decided to  make a list of ‘high value and difficult customers’ so that they would  arrange for ‘sensitive outward bound  communication to these customers who are still awaiting a payment’. The  same meeting included a paper that explained that RPA’s customer strategy was  to increase customer focus. It said that they would support their aims of  efficiency, effectiveness and customer service. The paper made several points,  including that staff’s perception was that management were still more  interested in statistics than meeting customers’ needs and staff believed that  the system had been built to manage SPS rather than serve customers. It also  set out the work intended to improve customers’ experience of RPA.87
  2. At the same meeting they noted the issue of non or  underdeclaration of land by SPS claimants and considered a  paper that outlined the risks of and issues in adopting a stricter approach to  applying penalties to customers who had not declared all their land. The paper  recommended delaying a stricter application of this approach until 2010. The meeting  agreed, but raised concerns over disallowance risks and the ability to put a  figure on the possible disallowance.
  3. In August 2009 RPA’s operational management team  considered a presentation on their complaints improvement process that  described continuing problems in RPA’s complaint handling.88 These included:  
    • ‘Lack of  definition/distinction in terms of what constitutes a complaint.
      • Complaint against decision
      • Complaint against treatment
    • A single letter of  complaint can pass between up to 13 pairs of hands, yet will typically end up  back with the case worker
    • No visibility on the number  of complaints being resolved at the various stages in the process.
    • 15 day deadline directs the  focus on ‘response’ rather than ‘resolution.’

    The presentation said the need for experienced  staff and the empowerment of customer champions were key factors needed to  improve the complaints process. The meeting minutes also noted that the chief  operating officer reinforced the importance of the work on complaints  improvement.

Footnotes

  1. « The European  Commission (EC) is responsible for the central administration of the CAP  schemes. The UK  government funds the subsidies, then reclaims the money from the EC.
  2. « From the April 2003 report on the Rural Payments Agency by the House of Commons  Environment, Food and Rural Affairs Committee.
  3. « The entitlements calculator.
  4. The Delays in Administering the 2005 Single Payment Scheme in England, published October 2006.
  5. « See paragraphs 80 and 81 of The Rural  Payments Agency and the implementation of the Single Payment Scheme report,published by the House of Commons  Select Committee on Environment, Food and Rural Affairs in March 2007.
  6. « This progress report was submitted in November 2004, by Defra’s  director-general for sustainable farming, food and fisheries and the chief  executive of RPA.
  7. « RPA’s 2004‑05 Annual Report and Accounts.
  8. « The CAP Reform Implementation Board  (CAPRI) was chaired jointly by the chief executive of RPA and the Defra senior  manager responsible for CAP reform policy.
  9. « Paragraph 79 of the House of Commons Select Committee on Environment, Food and  Rural Affairs report, The Rural Payments  Agency and the implementation of the Single Payment Scheme, published in  March 2007.
  10. « Q1143 in Volume II of the same report.
  11. « Briefing Note dated 11 March 2005, reference 03/05.
  12. « Farmers Weekly 20 May 2005.
  13. « Summary note for 24 May 2005 meeting of the CAP Reform Implementation Programme  Executive Review Group (ERG). It was Defra’s means of senior management  oversight of RPA’s CAP Reform work. The Defra Permanent Secretary chaired the  group, which included an external director with experience of programme  management.
  14. « Farmers Guardian 20 May 2005.
  15. « 18 May  2005 written statement  tabled before the House of Commons by the Secretary of State.
  16. « Page 48.
  17. « RPA Annual Report and Accounts for years 2003‑04 to 2007-08.
  18. « Rural Payments Agency: interim report.
  19. « Paragraph 3, The Delays in Administering the 2005 Single Payment Scheme in England,  Report by the Comptroller and Auditor General, October 2006.
  20. « Q68 of written evidence, The Delays in Administering the 2005 Single Payment  Scheme in England, House of Commons Committee of Public Accounts, July  2007.
  21. « Laid before Parliament in December 2009 under s10(3) of the Parliamentary  Commissioner Act 1967.
  22. « Briefing Note number 218/2006, issued on 4 August 2006.
  23. « The delays in administering the 2005 Single  Payment Scheme in England.
  24. « Operational management team minutes of 13 March 2007 and 17 April 2007.
  25. « Paragraph 5 of the House of Commons Select Committee on Environment, Food and  Rural Affairs report: The Rural Payments  Agency and the implementation of the Single Payment Scheme, published in  March 2007.
  26. « Operational management team minutes of 24 June 2008.
  27. « Operational management team meeting of 24 March 2009.
  28. « Operational management team meeting of 25 August 2009.

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