Annex C - Mr D – an extract from his letter to one of my investigators
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- Following our telephone discussion, I have tried to summarise the impact on my family of the protracted dealings with the Rural Payment Agency over my 2005 Single Farm Payment and their eventual refusal to pay.
- Whilst I do not accept the harsh way DEFRA penalise genuine mistakes with no effective route of appeal or redress, I can see that they might argue that I was the cause of my own financial misfortune through my mistake on the SPS application. However, I do still think that there was enough contradictory information on that form for them to question it, and I certainly believe that the impact of their refusal to pay has been made much worse and the financial losses much greater because of the delays, obfuscation and confusion which eventually stretched over fifteen months.
- I have always run my farm business in a conservative way, usually having a surplus in the current account at year-end (£4,000 in 2005). As a good credit risk I had medium term financing available to me at a reasonable cost, and if I had known at the beginning of this shambles (April 2006), that I definitely would not be paid, I could have planned a more structured way of overcoming our financial problems, instead of constantly playing catch up with overdrafts. I would have been pretty annoyed, but I do think that we could have avoided some of the things that happened which cannot now be never be reversed.
- When the new Single Payment System was introduced, farmers were not expecting their payment before Spring 2006, compared to what would have been Autumn 2005 under the previous scheme (IACS). Consequently, most farm businesses were already seriously stretched on cash flow and I took the precaution of extending my nominal overdraft facility (which I hardly used), in readiness. When the delays and uncertainty began in April my immediate response was to increase the short term overdraft limit again as needed. None of us could foresee that this was the start of 6 months of confusion, false hopes and delays.
- The haphazard way in which several other farmers I knew were being treated by the RPA suggested we were all in the same boat, and it was just a case of getting the system to work properly for payments to follow. I was not told at any time that I would not be paid until I received a copy of the Minister’s letter to my MP in October (the same month that Rebecca at the RPA told me that I would be paid).
- As the time dragged on I continued to increase the facility, eventually to £13,000. The farm accounts for 2006 and 2007 show overdrafts of £8,000 and £5,500. Meanwhile I managed to secure up to 25 hours per week additional contracting work on top of my farm duties in order to bring in some cash.
- During this period, [my wife’s small] business needed a cash injection for stock and further development which I was unable to provide. As RPA payment seemed to get further away we arranged the first ever overdraft for this business in 2006, but I was unwilling to commit serious investment until I got my Single payment and the business continued to decline. Unfortunately, it had to be closed for good in 2008, after 19 years trading. [My wife] has been forced to find part-time work away from the farm to secure some income.
- As debts increased I reluctantly sold some land in 2007 to pay off the bills, since the rental income could not do this. I received £4,000 per acre, whereas if I had been able to pick my own time for sale (2009 or 2010 for example), I would have got £6,000.
- We had to reduce costs wherever we could, and have not had a family holiday (we have 3 children) since this episode in our lives began. There has been no investment in the farm at all (my combine harvester is 29 years old), and necessary maintenance on our home has been deferred.
- I now have so little confidence in my ability to complete the SPS claim forms (which change in detail every year), correctly, that I employ a specialist to do it – this costs £300 per year. It seems very unfair on small businesses that this is necessary.
- It is difficult to quantify the psychological strain of having hopes raised and dashed repeatedly over the first six months of this ordeal. It was not helped by frequently being unable to speak to anyone who knew the facts or by the continued failure of the RPA to return calls.
- It put great stress on us, and [my wife], particularly, became very depressed, fearing the worst. When I finally discovered in October that I would not be paid (NOT from RPA, but from the Minister’s letter to my MP), I felt that I was being ushered in to the Appeals process as the next stage in securing my payment. […]
- With hindsight, we had no idea how narrow the scope of the Appeal is and how limited the powers of the Panel are. In fact it was made clear that much of the process (Notified Error provisions, for example), was designed around preventing fraud. This made me feel quite uncomfortable and was made worse by a member of the Appeal panel asserting that they only had my word that the RPA had promised me payment on 13 October (in the famously lost telephone transcript). After all, it was only my honesty that had got me into this mess in the first place! I felt I had to ask for confirmation that they did not consider my actions to be fraudulent.
- I did not get much sleep over this period.
- To add insult to injury, the whole Appeals fiasco took another 8.5 months of uncertainty, considerably exceeding the timescale laid down in Defra’s own Appeals Procedure and the verbal promises made at Stage 2 to let me know within 14 days.
