Mr B

About Mr B

36. Mr B's 2005 SPS claim covered 97 hectares (240 acres). He is an arable farmer in the East of England, with no livestock. Mr J has been Mr B's agent since about 1995.
37. Mr B is a tenant of the county council, which means he is not permitted to sublet his land. However, there is a long‑standing practice in that part of the country for specialist pea contractors to grow peas for freezing on farmers' land. If the peas are unsuitable for freezing, the farmer keeps the crop.
38. The start of subsidies for fruit, vegetable and potato crops (FVPs) was the complicating factor for farmers in Mr B's position. Issues about dual claims for subsidy on these crops had not arisen before 2005. That was partly because no subsidy had been payable on peas and partly because 2005 was the first year of linking subsidy to land holding instead of production. Under the IACS scheme claims the land was always under Mr B's name, as it met the criteria for being under his control at the key date. (The FVP scheme no longer exists.)
39. An NFU Information and Analysis paper issued on 10 July 2006 said: 'The introduction of SPS has not been a happy experience for FVP growers and those farmers who provide them with land under short‑term arrangements'. The paper went on to explain that farmers and specialist growers often had informal arrangements about land. In 2005 specialist growers who had not received direct subsidy in the past ended up claiming SPS. If the specialist growers had not claimed, there had been a risk that the industry would lose financially because they had failed to establish entitlements. The paper noted that farmer claimants needed to ensure they had enough management control to fulfil the rule of having the land at their disposal for 10 months. It described the FVP regime as almost unworkable.

The 2005 SPS claim

40. On 12 May 2005 Mr J wrote to RPA. The letter was headed '[Mr B] – SBI […]' and Mr J handed it in with the form. But he delivered it as a general query, not a covering letter. The letter said he had recently delivered an SPS claim. 

    'I was surprised and disappointed to find that this year, staff have been instructed to give no help or advice on any query even though this is the first year of the new regime and with ever more complex forms – other than to check for signature and tippex!'

    his letter said. In the next paragraph it said:

    'I am concerned that three applications I handed in may have unintentional errors as I am unsure of the need to activate entitlements for fields let for an annual crop, but which may be retained by the grower if not fit for the purpose for which it was grown. The FVP [fruit, vegetable and potato entitlement] being claimed by the hirer [sic]. I had taken some thirty forms to the office at the same time and they were split up between three clerks for stamping at three separate desks and I did not ask for my query to be appended. I raised my queries and was told that anomalies would result in the return of the form for correction as in previous years and trust this will be so.'

    RPA have said that they have no record of receiving Mr J's letter. He has said that, if they had replied, he would have updated Mr B about the correct situation.

41. On 13 May 2005 Mr B's claim, which was signed by Mr B, passed RPA's Level 0 validation checklist. The checklist noted the agent's authorisation.
42. Mr B and Mr J have said that, after Mr J had submitted Mr B's claim, the pea contractor spoke to Mr B. He and the pea contractor agreed that for 2005 the pea contractor would claim the fruit, vegetables and potato subsidy for his pea crops on Mr B's land. Neither of them contacted RPA or Mr J about this changed arrangement. Mr J later told RPA⁹² that Mr B had believed it did not matter, since he had not claimed fruit, vegetables and potatoes authorisations for those fields.

RPA identify the dual claim – November 2005

43. On 8 November 2005 an RPA caseworker noted that the pea contractor and Mr B had claimed for the same land. RPA wrote to both of them about the dual claim on three fields. Mr B also recalls a telephone call about the dual claim, but we have seen no record of it. We have not seen any record of RPA contacting Mr J, as Mr B's authorised agent.
44. On 24 November 2005 Mr J replied to RPA's letter of 8 November 2005 to Mr B. He said: 

    'The three fields to which you refer were completed as being cropped in 2005 when the application for single payment was completed on the 26th April 2005. This was my client's intention on that date. Sometime later he was approached by [the pea contractor] who asked if these fields could be cropped with peas. My client agreed and as he was not claiming for any fvp [fruit, vegetables and potato] on these fields did not realise that his form needed any amendment. On previous occasions he has made arrangement[s] with other vegetable growers that he would remain responsible for the crop until harvest when the produce would become the property of the merchant. I believe that this is not so in this case and these fields should rightly be claimed for by [the pea contractor] as they need the entitlement to the horticultural authorisation. […].'

RPA revisit the dual claim – January to June 2006

45. On 16 January 2006 another RPA caseworker noted a dual claim on another land parcel, and wrote to both claimants. We have not seen a copy of the letter of 16 January 2006, but we believe it was about a fourth land parcel […]. Mr J replied, referring RPA to a letter he had sent the Rural Land Register in April 2005. Later in January 2006 RPA wrote to Mr B again about the same land parcel. On the same day, 26 January 2006, they noted that they had removed the fields as requested.
46. In commenting on the draft report, Defra and RPA said: 

    'It seems that all parcels referred to in the appeal […] have been removed from the claim without penalty. However the payment this would produce is on hold. Essentially the penalties were applied, then the fields removed from the claim incorrectly by the case worker, but not added back on and penalised after the Stage 1 result. Additionally we have identified an additional field that has been removed without penalty that has not been referred to in the appeal or the [draft] report and it seems we did not notify the customer of this either. Manual calculations suggest this would not affect the total level of penalty to be applied, that is the entirety of the 2005 claim, because even with this additional field the area found to be ineligible exceeds 30 per cent of the determined area, but not 50 per cent, which would trigger three year penalties. There is no effect on the customer.'

47. In February, March, April, May and June 2006 RPA caseworkers dealt with 'discrepancies' in Mr B's claim. In commenting on the draft report, RPA confirmed that these were validation tasks. We have seen no indication that RPA copied any of their letters about these tasks to Mr J. On 5 June 2006 RPA noted that they had 'found in supporting documents' for Mr B's claim a letter which confirmed that Mr Bowned 'the field', but only the pea contractor would be claiming, and had updated their system to reflect that information. We have seen no information to explain which letter or which field they meant. Also in June 2006 an RPA processor corrected a field reference for Mr B's claim – […] 0277 had been input incorrectly. He corrected 0277 to 0227.

Mr B asks why he has received just 1p

48. In July 2006 Mr B (by telephone) and Mr J (by letter) contacted RPA to ask why he was receiving only 1p, with the other £6,000 taken off in penalties. This followed RPA's letter of 26 June 2006 to Mr B, which we have not seen. Mr J said his queries on behalf of Mr B had indicated that a payment was imminent, but RPA's letter showed penalties and deductions equal to the payment outstanding. Mr B telephoned RPA again on 24 July 2006. RPA's note of the call said: 'I checked the notes, but the only thing I could see which might have a bearing is a reference to dual claims. On enquiry screen it says "SPS Penalty other"'. They mentioned the appeal route. At this stage RPA had not scanned Mr J's letter into their system. He wrote again on 12 August 2006. RPA have told us they have no evidence of receiving that letter. Mr B telephoned again on 1, 8, 16 and 29 August. He said his bank manager 'could not wait much longer'. On 1, 21 and 22 September 2006 RPA noted that Mr B called again. On 21 September 2006 RPA noted: 'His claim on enquiry page says amended, but he is not on any spreadsheets'. Mr J also wrote again to RPA on 18 September 2006.
49. On 22 September 2006 RPA wrote to Mr B. They said they had reviewed his claim and decided they needed to adjust their records. They said they would contact him again when they had adjusted it, but asked him not to contact them for further information as they were: 'striving to make payments on all claims, including yours, as quickly as possible'. In November 2006 and January 2007 Mr J and RPA were in touch again. On 2 March 2007 Mr B telephoned RPA. They told him his claim was still being validated, but 'hopefully he would receive his payment shortly'.

RPA explain, remove the penalty, then put it back – April to July 2007

50. On 25 April 2007 (after two attempted telephone calls on 21 March 2007) RPA spoke to Mr J. Their note of the telephone conversation is that they told him the penalty seemed to have been applied because four parcels of land had been claimed in 2005 by Mr B and by the pea contractor; that Mr B's written request for withdrawal of the first three parcels was made in a letter dated 24 November 2005, replying to RPA's letter of 8 November 2005; that his request for withdrawal of the fourth parcel was made in a letter dated 5 November 2006 in response to a telephone call from RPA; and that it seemed penalties had been applied because the requests had been made after RPA had drawn Mr B's attention to a problem or anomaly.
51. On 8 May 2007 Mr J wrote to RPA. He said: 

    'It was in 2005, when Mr B was growing peas with [the pea contractor] that he was approached and it was suggested that, provided he had sufficient fvps for his own needs, it would help [the pea contractor] if the peas could be treated as his. Mr B agreed and some fields with peas were excluded from his application. Unfortunately, the list given to me was not identical to that discussed and this field – […] was not included. The reason for this was partly due to this field number being originally mistyped by yourselves as […] and the field was then amalgamated and renumbered as […].'

    He said he had explained this in his letter of 5 November 2006, but had received no reply. He also said that in two similar instances, RPA had corrected claims without penalty.

52. On 20 June 2007 another RPA officer looked into the claim. He decided to remove the penalties because: '… this seems to be an honest mistake …'. On 2, 5, 18 and 24 July 2007 Mr B telephoned RPA. He found out that the penalty had been reversed, but the payment seemed to be 'stuck in finance'. RPA told Mr B that he would be paid.
53. On 26 July 2007 RPA reimposed the penalty and the next day explained matters to Mr B and Mr J. Mr J told RPA he was dissatisfied with their overall handling of the case and the penalty decision in particular. On 1 August 2007 RPA wrote to Mr J. The letter said the penalties were still in place. Among other things, it said there should have been an RLE1 form⁹³ to enable the pea contractor to claim on Mr B's entitlements. The letter referred Mr J to section D9 of the 2005 SPS Handbook, which was about transferring and letting land. It said Mr J needed to appeal if he wished to dispute the decision.

The Stage 1 appeal – August 2007

54. On 16 August 2007 Mr J submitted Mr B's Stage 1 appeal. He enclosed a copy of his letter of 12 May 2005 to RPA. The grounds of appeal were:
    • 2005 was the first year for SPS claims and, despite attending two seminars, questions inevitably arose.
    • The RPA landline was almost impossible to access due to the volume of calls in May 2005.
    • The usual advisers at the drop-in centre at Newmarket could not help.
    • Mr J realised three possible problems and wrote to RPA for advice but received no response on any of them.
    • The alleged dual claim was inadvertent and not an intention to defraud.
    • The fields in question belonged to Mr B and were activated in error – to ensure that they were registered and not to receive fruit, vegetables and potatoes subsidy or payment.
    • It was their intention to register the fields for future claims and not to claim in 2005.
    • It was agreed between the NFU and the RPA that genuine errors made in 2005 would not be penalised.
    • It is only possible to notify RPA about an error when it is known that an error has occurred. The agent believed that the claim had been completed reasonably and competently and in good faith.
    • Mr J had written to RPA in general terms asking for their advice and for the claim form to be returned for correction if it was inadvertently in error. He said that that should count as notification even though RPA did not reply.
    • Mr J had had a similar case to Mr B's, involving a dual claim of a river bank between a grazing tenant and English Nature⁹⁴. An exchange of letters had resolved it without penalty.
55. On 5 February 2008 RPA sent Mr J the Stage 1 appeal decision. They had decided to remove the penalties applied to land parcel […] 0227. They said that was because Mr J had told RPA about that error in November 2006, before RPA raised it. They had upheld the decision to apply penalties on the other land parcels. They also said that the letter of 12 May 2005 omitted to specify the possible problems or on which fields they may occur. It would have been too little to prevent the dual claims even if RPA had received it.

The Stage 2 appeal – March 2008

56. On 20 March 2008 Mr J submitted Mr B's Stage 2 appeal. On 19 May 2008 the RPA appeal panel upheld RPA's decision to apply penalties. They commented that the lack of adequate communication from RPA put unnecessary stress on Mr B and that financial penalties affected smaller applicants disproportionately. They said that should be reviewed at a higher level. On 28 May 2008 the submission to the Minister recommended upholding the appeal panel's recommendation. The submission repeated the panel's comments about communication and the effect of the financial penalties on smaller applicants, but made no recommendation for action in the light of that comment.
57. On 2 June 2008 RPA received confirmation that the Minister had agreed with the panel's recommendation to reject the appeal. Separately, the Minister's office asked for more information about the panel's statement about reviewing the effect of financial penalties on smaller applicants. On 5 June 2008 RPA sent Mr J the outcome of the appeal. Later in June 2008, the panel secretary emailed the Minister's office a note on the effect of penalties, prepared by a member of RPA's policy team. The panel secretary said: 'I don't think there is any more we can do but if the Minister directs it I'll go back to Defra policy'. The note from the policy team said: 

    'It would require an amendment to the EC Regulation which specifies the level of penalties to be applied. Although we can channel this request through Defra, it is not very likely that it would be achieved as it would require the Commission to agree in principle and would also require the agreement of all other member states. Although I understand the feeling that small claimants are potentially penalised more, i.e. in that if the small producer makes only 1 mistake on his application the fallout is likely to be higher, but the same principles are applied to all claimants. It is the extent of the mistake that determines the penalties rather than how many errors were made.'

    RPA have told us that there was no further contact on this issue from the Minister's office.

The attempt to go to court

58. On 4 August 2008 Mr J wrote to RPA. He said Mr B had decided to challenge the appeal decision by judicial review. He referred to the panel's conclusions that first, there had been a lack of adequate communication from RPA, which had put unnecessary stress on Mr B; and secondly that financial penalties affected smaller applicants disproportionately harshly and should be reviewed at a higher level. He also said that in 2005 RPA had breached the standards set in their Guide to the standard of service that we provide to all our customers. RPA acknowledged the letter and said the contents had been noted.
59. On 24 September 2008 Mr J made a judicial review application. His grounds for the review were that RPA had been neglectful in dealing with and explaining the issues. He said that, if RPA had met their standard of service, Mr B's claim would have been resolved without cost to him.
60. On 21 October 2008 RPA's legal division wrote to Mr J about the judicial review application. They said that they were unable to accept that RPA had any liability to Mr B over his SPS claim, but they apologised for failing to give a complete response to his letter of 4 August 2008. They offered to reimburse his reasonable costs if he withdrew his claim, in recognition that a full reply to his letter of 4 August might have led him to drop his claim. They also said that RPA's policy directorate had reviewed the issue of penalties and smaller claimants immediately after RPA had notified Mr J of the appeal decision. They said that the penalties operated on a sliding scale related to the area of land affected by the overdeclaration, so a large applicant would be affected to the same extent as a smaller applicant. They further said that, even if there were any disproportionality, it did not breach the general principles of European Community law.
61. On 20 November 2008 Mr J wrote to RPA. He said that RPA's solicitor had suggested he should complain to the Ombudsman about maladministration. He said he was making a final submission so that RPA could reconsider the case. He gave five examples of mistakes corrected without penalty.
62. On 3 December 2008 the High Court refused permission for the application for judicial review. The judgment said: 

    '… the documents do not demonstrate any error of law or irrationality on the part of either the RPA, or its appeal panel, or the Minister, or Defra. The Panel's sympathetic comment about lack of adequate communication does not signal any ground or basis for judicial review, although it may (I stress, may) indicate some alternative extra judicial remedy for maladministration. The Panel's acknowledgment that financial penalties affect smaller applicants disproportionately does not indicate any reviewable error of law. At most it indicates the view of the Panel that the law, when correctly applied, may bear more harshly on smaller applicants.'

63. Later in December 2008 an RPA lawyer told the RPA official dealing with Mr J's letter of 20 November 2008 that Mr J seemed to be asking for a response about maladministration rather than the appeal decision. She said that dealing with the points Mr J had made would show the Ombudsman that RPA had done all they could before Mr J took the complaint further. The official, who had been the panel secretary for the appeal, took the view that no further explanation was needed because Mr J was raising the same points as he had made at appeal. He wrote to Mr J in January 2009. The Member referred the complaint to the Ombudsman in February 2009.

Mr B's description of the effect on him of losing the 2005 payment

64. Mr B has told us that the problem for him was being accused unfairly of fraud – that was how the penalty issue had felt to him. He found it difficult that each time he called RPA, he was passed around to three or four people, none of whom knew what was going on. He has also said that there were times when RPA failed to return telephone calls. He said that he was lucky to have been in credit at the bank and that the bank had been willing to lend to him. His penalty affected only his 2005 SPS payment.

Some comments from Mr B on a draft of this report

65. We shared a draft of this report with Mr B and his representative. His representative said that hewas disappointed with the conclusions we had reached, but he accepted our reasoning. However, he said that he believed that the circumstances of Mr B's complaint would justify a larger payment to him than the £1,000 I had recommended, closer to the £6,000 loss he had suffered.

Mrs A

About Mrs A

1. In 2005 Mrs A owned about 33.5 hectares (86 acres) of land in the South West of England. She ran a livestock farming business. The value of her 2005 SPS claim would have been about £13,879⁸⁹ if she had activated her entitlements as she intended. She has told us that she kept her land but sold the bulk of her stock in 2008 because the paperwork and the hassle had become too much. Her last eight cattle will go this autumn.
2. Mrs A has told us that, before SPS, she had taken her claim forms to RPA's Exeter office every year, where someone would go through them. That checking service was not available for 2005, although it was still possible to hand-deliver the form. She has told us that she had found out that the checking service was not available for 2005 from RPA publicity. Mrs A has said she also believed that, if there was a problem with a form, RPA would contact claimants if necessary.

The 2005 claim

3. On 13 May 2005 the Northallerton RPA office received Mrs A's 2005 SPS claim, the SP5. On the form Mrs A had said 'no', where it had asked her whether she was applying to activate her entitlements. She had made no entries in column J of the field data sheets which asked for the 'area for which entitlements to be activated'. She did not provide a specific date in response to question 5 on form SP5a (an annex to the SP5) asking about the date from which her land would be at her disposal for a continuous period of 10 months. The form also said that the summary tables on the field data sheet were not part of the claim, but could be completed for the claimant's own records. Mrs A put a figure for the total area on which entitlements were to be established – 33.46ha – in the summary tables. But she put nothing about the area to be activated.
4. Mrs A has told us she had got used to basing her form on the previous year's claim, but in 2005 she had no form for comparison; and that there was too much guidance. She said she was not the greatest form-filler at the best of times, but RPA forever bombarding her with paper made things worse. She also said the agent's fee of about £250 was not worth the expense for so small a farm. She had turned to an agent for the appeal because the issues were too complex for her to deal with.

RPA's handling of the claim from May 2005 to March 2006

5. On 14 May 2005 RPA completed the initial checklist for Mrs A's claim to establish that it had the basic information needed for a valid claim. On 15 June 2005 RPA completed a further checklist when they keyed in her claim. The papers we have seen show no contact between RPA and Mrs A for the next eight months.
6. On 16 February 2006 RPA sent Mrs A her definitive entitlement statement (see glossary), that showed the value of her entitlements as €20,351.27. They said that if she had applied to activate her entitlements under the 2005 SPS, she would shortly receive payments based on the entitlement information shown on the statement. On 15 March 2006 RPA paid Mrs A £5,141.85 for the 2005 SPS. (This payment should have been zero, because her claim form had not activated any entitlements.)
7. We asked Mrs A about the length of time it took for RPA to tell her about payment. She could not remember how long she would have waited for notification of payment under IACS, but she told us the wait had not mattered then because, with the local checking service, she had been confident that the form was all right.

Mrs A's representations to RPA from March 2006

8.  Mrs A telephoned RPA on 21 March 2006. RPA's records show they told her they were unable to answer her question about her entitlement statement and asked her to put her query in writing. They received her letter the next day. It said her entitlement statement showed that she was due to receive €20,351.27 (about £14,000 at 2006 exchange rates) but she had received a cheque for only £5,141.85 from RPA. She asked them to explain the reasons for this. She has since said that RPA would not have realised they had paid her incorrectly if she had not telephoned them. She said they did not seem to have a clue.
9. In April 2006 RPA confirmed with the 'RDEs' (the Rita Delivery Experts) that Mrs A had incorrectly received payments for the 2005 SPS. They noted that they were awaiting guidance on how they would recover overpayments. Later that month, on 25 April 2006, an agent approached by Mrs A (the agent) contacted RPA. He said Mrs A wanted to correct her mistakes and asked RPA to amend her forms to enable them to pay her full SPS entitlement for 2005. On 2 May 2006 he sent RPA a similar letter about the mistake made by Mrs A's partner, Mr Z, in his 2005 SPS claim.
10. On 19 May 2006 RPA referred the overpayment details in Mrs A's case to their scheme management unit, to find out how to recover the overpayment from her. RPA's papers show that in August 2006 staff in RPA's Exeter office were considering her 2005 claim. We believe this was because of the agent's representations.
11. On 27 September 2006 RPA incorrectly sent Mrs A a further payment of £96.65 for the 2005 SPS. They have told us that this was the modulation refund⁹⁰ required by the SPS regulations. In total RPA had sent Mrs A £5,238.50 in error for the 2005 SPS.

RPA's internal debate about the claim – from September to November 2006

12. On 28 September 2006 the appeals champion in RPA's Exeter office referred Mrs A's appeal to the SPS scheme management unit in Northallerton. On the same day, the scheme management unit appeals champion referred the appeal to the policy team in Reading, asking for advice. They gave a deadline of 20 October 2006.
13. The appeal referral from Exeter was in two parts. The first part, written by the team leader, set out the background and explained that there was no information on Mrs A's claim form to suggest she had wanted to activate her entitlements in 2005. It said:

    'Unfortunately, either at HVDC [the high volume data capture stage] or during the level one validation on four of the applicant's ten fields, entries were incorrectly entered in to the e-channel which actually gave activated entitlements, so subsequently the applicant received payment based on 13.01ha out of the total of 33.36ha of established entitlements.'

    The appeal referral said that the mistakes on the form could not be considered to be notified error⁹¹ because RPA told Mrs A about the error before she notified them. It recommended that RPA adjusted their records to activate all the entitlements on the grounds that:

    'she made a genuine mistake, she obviously believed she was due a payment, she farmed the land for the whole year and the land was at her disposal for the relevant 10 month period. [Mrs A], like many other applicants that have similar cases, believed that establishing entitlements for payment meant that she was requesting payment.'

    It noted that paying Mrs A would save RPA from the embarrassment of recovering money she should not have received if they had processed the claim correctly.

14. The same appeal referral continued with comments from the Exeter appeals champion. He said that he was holding a number of cases where customers had made similar mistakes until he had a decision on Mrs A's. He said:

    'It seems harsh for us to allow payment under the obvious error rules to those who completed Q5 with a start date for the 10 month period when the SPS Handbook and Guidance for 2005 clearly states that if this was left blank we will assume their 10 month period starts on 1st February. I understand the significance of this [the insertion of a 10‑month date] in suggesting there is a contradiction in info provided on the form, it seems a rather arbitrary distinction to make when dealing with people's livelihoods, especially when we gave our customers the impression that we would be as understanding as possible in the first year of such a complex scheme.'

15. On 31 October 2006, before the appeal received further attention, the agent wrote to RPA. He said that RPA had paid Mr Z – the case where the agent had made the same representations as he had for Mrs A. He asked RPA to revisit Mrs A's claim.
16. On 9 November 2006 the Northallerton office followed up the appeal referral they had sent the policy team in Reading. This seems to have prompted action from them. On 14 November 2006, a Reading policy officer said in an email: 'I do not see that there is anything we can offer here without creating a precedent'.He noted that Mrs A had three opportunities on the claim form to tell RPA that she wanted to activate her entitlements but failed to do so. He said: 

    'All of this is unfortunate and suggests that [Mrs A] did not understand what was meant by activate, however it would not lead to anything other than the assumption that we were acting in accordance with her wishes by establishing but not activating.'

    He said the fact that RPA had paid her by mistake devalued their argument, but did not change what was on the claim form. He said that the agent's letter referred to the 2005 Handbook's paragraphs on 'obvious error' and 'notified error'. The officer's view was that, even if 'obvious error' was open to question, 'notified error' was not an issue since it was RPA's overpayment that had alerted Mrs A to her mistake. He also noted that, since RPA had established entitlements, there was no long‑term damage. He said:

    'Were this an isolated case I think a suitable compromise would be to write-off the overpayment but not activate the remaining fields. I can understand [the appeal champion's] recommendation, but were we to go down this route we would need to revisit any similar cases and the Delivery SMU [scheme management unit] would need to revise its briefing, so I think this is a non‑starter.'

17. On 15 November 2006 the Exeter office emailed the Reading policy team about the agent's information that RPA had accepted 'obvious error' in Mr Z's case. (The Agent's letter did not say that RPA had accepted 'obvious error'.) He asked whether that affected RPA's handling of Mrs A's case or whether they should ask Mr Z to repay the money.
18. Another policy officer replied to the processing/Exeter appeals champion on 18 November 2006. She said: 'the only "obvious" conclusion from this form is that she [Mrs A] only intended establishing her entitlements but not to activate them in 2005'. The officer said that she had looked at Mr Z's case and that he had made the same errors as Mrs A. She said she could not understand why his claim had been paid and that RPA should consider recovery. She also raised concerns that the agent had submitted incorrect forms for Mrs A and Mr Z (for the 2005 SPS year). She suggested Mrs A and Mr Z might be able to pursue the agent, depending on their agreement with him. (It is not clear why the policy officer believed the agent had submitted either or both the claims. The Agent's authorisation to act for Mrs A was dated 24 April 2006.)

The outcome of Mrs A's first representations

19. RPA wrote to the agent on 27 November 2006. The letter apologised for the delay in replying to him. It said that Mrs A should not have received any payment for her 2005 claim. It described the omissions in her claim form and said there was nothing on the claim form to suggest that Mrs A wanted to activate her entitlements. It said that although there had been genuine errors (by Mrs A) in completing the form, these errors could not be classified as an 'obvious error' under EC Regulations. It said that a keying error by RPA had resulted in four of Mrs A's entitlements being activated and this was why she had incorrectly received a payment. The letter said RPA would correct their errors and recover the overpayment in due course. It also said they had looked into Mr Z's claim and that he should not have any payment for his 2005 SPS claim either. It said the errors in his case were not classified as 'obvious errors' and it was possible that they would recover the overpayment from Mr Z.
20. That same day RPA wrote to Mrs A telling her that she should not have received payment for the 2005 SPS claim. They reiterated what they had said in their letter to her agent, but made no reference to Mr Z. They told Mrs A that if she was unhappy with the outcome, she could appeal and they sent her an appeal form.

Mrs A's appeal about her claim – Stage 1

21. On 8 January 2007 the agent wrote to RPA about Mrs A's Stage 1 appeal. The agent set out Mrs A's grounds for appeal. He said that:
    • Mrs A's failure to fill in the SPS forms correctly was an obvious human error and in no way deliberate or fraudulent;
    • the Handbooksaid that RPA had the discretion to accept that honest/mistakes errors were made and could permit payment of entitlements under SPS;
    • RPA had accepted that a genuine mistake had been made and on that basis it was self‑evident that there had been an 'obvious error'; and
    • Mrs A's errors in failing to complete the form correctly were manifestly 'obvious'.
22. The agent also referred again to Mr Z's case, explaining that he was Mrs A's partner. He further said that Mrs A's cousin, Mr W, had also failed to complete column J of the field data sheet properly. In his case RPA had telephoned his agent to ask whether he wished RPA to correct the 'obvious errors'. Mrs A's agent asked RPA to reconsider their stance and allow Mrs A's appeal.
23. The next action we have seen was in May 2007. The agent spoke to RPA and sent them a copy of the Stage 1 appeal form, which he said seemed to have gone missing. In September 2007, after he wrote to them, RPA telephoned him with an update.

RPA ask for their money back

24. In the meantime, on 3 August 2007 RPA had amended their records and on 12 August 2007 they had sent Mrs A an invoice for the £5,238.50 they had paid her in error. Mrs A has told us she received no further contact from RPA about the overpayment – they just deducted it from a later year's SPS payment. She has said she cannot see that RPA have the right to pay someone and then take it back when it suits them.
25. On 9 October 2007 RPA's Stage 1 appeal upheld the original decision not to amend Mrs A's 2005 claim form to allow her to activate her activate her entitlements. They sent the decision to the agent, with their apologies for the delay in dealing with it. They said if Mrs A was unhappy with this decision, she could proceed to the second stage of the appeal procedure and enclosed a Stage 2 appeal form and the appeal leaflet for further information. These were the main points in the decision.
    • The first time Mrs A contacted RPA to query her entitlements was 4 April 2006. (Mrs A had telephoned them and written to them on 21 March 2006 about the difference between her entitlement statement and her payment.) This meant all contact had been after the 31 May 2005 SPS deadline for notifying RPA about amendments.
    • It was not possible to allow Mrs A to amend her 2005 claim form under EC Regulations about 'obvious error' because the way she had completed her form was consistent with an applicant who wanted to establish entitlement to claim under the SPS but did not want to activate entitlements for the 2005 SPS year.
    • The 2005 Handbook said the Regulations allowed RPA to make corrections on a claim at any time provided an applicant notified RPA in writing of this before RPA notified them of the error, but they said that 'notified error' did not extend to amending a claim form after the deadline of 31 May 2005 to add data that was not initially included in the claim.
    • RPA were unable to consider the agent's examples of similar cases that had been paid when considering her claim. They noted that if it came to their attention that other applicants had been paid incorrectly, they would need to recover any overpayments from them.
26. In November 2007 the agent telephoned RPA about the Stage 1 appeal. Among other things noted in RPA's papers, he said: 'RPA had been encouraging agents just to get the forms in and RPA would sort out any mistakes later'. He felt that by rejecting Mrs A's appeal, RPA had contradicted what they had said in 2005 and that this was unacceptable in his view. In commenting on the draft report, Defra and RPA said that they believe the agent was referring to RPA's stance on mapping issues, not on claims generally. But that is not what the evidence we have seen suggests.
27. In December 2007 the agent sent RPA Mrs A's grounds for her Stage 2 appeal. Among other things, he said: 

    '[Mrs A} admits to having been confused as between establishing and activating entitlements. She thought that by establishing entitlements that that automatically led to the activation of entitlements i.e. entitled to receive the money owed.'

    He went on to say: 'The SP5 forms are substantially different from the IACS forms and their layout and the applicant was confused that the forms had changed and this was not made clear by the RPA'. He made two further points: it was not necessary to fill in the 10‑month start date because the default start date was 1 February 2005; and Mrs A would not have completed and returned the claim form if she had not wished to claim any payments.

Mrs A's Stage 2 appeal ends

28. On 27 January 2008 RPA's appeal panel recommended that the Minister should reject Mrs A's Stage 2 appeal. They said they had sympathy for Mrs A and that there had been a genuine error in completing the SPS claim form. However, they said that there had been no 'obvious error' under the regulations. On 4 February 2008 the appeals panel secretary submitted the panel's recommendation to the Minister and on 5 February 2008 the Minister agreed the recommendation.
29.  On 7 February 2008 RPA's appeals panel secretary sent the agent the Stage 2 appeal decision. He said that Mrs A could challenge the Minister's decision by judicial review or she could complain to this Office, through her MP, if she thought there had been maladministration.
30. In March 2008 Mrs A wrote to the Minister and the Member. Among other things, her letter to the Minister said: 

    'I did not tick the activation boxes as I have been claiming since 1995 and wrongly assumed that the claim was therefore ongoing and did not require activation […] In previous years I took my forms to the RPA offices in Exeter where they were checked but this service was stopped in 2005.'

    She asked the Minister to help. The Member also wrote to the Minister about her case. Later in March 2008 the Minister replied. He said he had sympathy for Mrs A's situation but the appeal procedure was complete. He said Mrs A could challenge his decision through the courts or if she was unhappy with RPA's handling of her case she could ask the Member to refer her complaint to this Office.

31. RPA sent Mrs A an invoice on 20 August 2008 requesting payment of £5,238.50, the total amount they had paid her in error.
32. The Member referred Mrs A's complaint to this Office on 26 September 2009.

Mrs A's description of the effect on her of losing the 2005 payment

33. We have asked Mrs A about how losing her 2005 SPS payment affected her. She has said her farm had a small acreage and turnover and she did not make a profit. Losing the subsidy was a big blow. But as long as they could live, they were happy. She responded to the loss by cutting back the number of cattle she kept and being very careful about what she spent. Before losing that money, she used to rent 60 acres from her partner, Mr Z, for grass keep (which is buying the grass off the field for grazing or for silage on top of what she had of her own). For four years she could not pay him. She had no way of paying him. She did not like being unable to pay and it caused a little bit of friction but, very fortunately, nothing that was going to become a problem. She has said that RPA have not sought to recover the money they paid Mr Z in error.
34. Mrs A has also told us that her impression of that time was that RPA never returned telephone calls. She never spoke to the same person and they did not seem to understand that, as a farmer, she was out there at all hours and in all weather. She found the experience of losing her 2005 payment, and what followed, exceedingly stressful. She said she 'just worried and worried and worried'.

Some comments from Mrs A on a draft of this report

35. We shared a draft of this report with Mrs A. She told us that she had lost confidence in filling in any forms from RPA and now always used an agent. She also said: 'The hassle and stress have resulted in my being prescribed both anxiety tablets and anti-depressants, although I am beginning to cope far better again, but for two years my life stood still'.

Mr C

About Mr C

66. Mr C is a  tenant farmer in the South West of England with about 40 hectares (about  98 acres) of land. He is a beef farmer, although he had a dairy herd until  2004. Mr C is completely deaf in one ear and partially deaf in the other. He  has said that, generally, he prefers written communication and, after he has  spoken to RPA, aims to confirm conversations by letter. Mr C told us that he  had told RPA that he was deaf ‘time and  time again’. Mr C also told us that it would have been easier for him if he  had had to deal with one person ‘instead  of 25’. Mr C is 76. Two of my investigators have met Mr C and his  representative. In the meeting Mr C had a full grasp of the facts of his case,  but it was clear that he had difficulty hearing what the investigators said.  His handwriting on the official forms and letters that we have seen can look  unsteady. He has  said that he attended one of RPA’s meetings for farmers, but was unable to hear  the information given.
67. Before  SPS claims started in 2005, Mr C used an agent to make his claims for subsidy  and in 2005 a Forest Friendly Farming⁹⁵ adviser  helped him with his SPS claim. It was successful. However, Mr C did have some  queries about RPA’s handling of his 2005 claim and he was still trying to  resolve those when he claimed SPS in 2006. For the sake of making the facts of  his case easier to understand, I have put the story of those queries and the  story of Mr C’s 2006 SPS claim in separate sections. First, I have dealt with  Mr C’s experience with his 2006 SPS claim.
68. For the  avoidance of doubt, I should say here that the papers we have seen show that,  from time to time, RPA officers did consider the welfare and stress issues  raised by Mr C and people writing on his behalf. We have seen no evidence that  RPA attempted to have any face‑to‑face meetings with Mr C and his  representatives.

The 2006 SPS claim

69. Mr C’s  farming adviser was away when he made the 2006 claim and Mr C looked after the  claim on his own. He would have received about £9,128⁹⁶ in total  from SPS in 2006 if he had activated all his entitlements as he had intended.
70. On 4 May  2006 RPA received Mr C’s 2006 SPS claim form. Mr C had completed column C10 to  activate his entitlements for only one field parcel. He had added this line by  hand. He had left the lines of pre‑populated field data untouched. His covering  letter said: ‘On filling out this  application you completely missed out field number […] which is recorded on your Rural Land Register Map’.  In his comments on a draft of this report,  Mr C said that the small print on the form said there was no need to alter  it unless land was missed out. (The 2006 form also asked claimants to correct  any mistakes in the preprinted entries.)
71. On 5 May  2006 Mr C’s 2006 SPS claim form passed RPA’s Level 0 validation checks.  The checklist asked if at least one line in the field data sheet had entries at  parts C2, C4 and C8 or D1 and D2. One line was completed – enough for Mr C’s  form to pass the basic checks of RPA’s initial validation process for part C of  the claim form.
72. The 2006  SPS claim form, in part E, also asked claimants to use the information from  their field data sheets (part C) to tell them which entitlements they were  ‘activating for payment’ in 2006. There was no preprinted entitlement  information in part E of Mr C’s claim form and he made no entries, either of  individual entitlements or to complete the ‘activate all’ box on the form. We  asked RPA about how they handled claims where part E was blank. They told us  that Mr C’s form failed the checks for part E of the claim and their  guidance at the time was to send an ‘SPV1’ letter asking for the missing  information. They told us they could find no records of writing to Mr C  and that it seemed no action was taken on the blank part E. In principle, the  lack of an entry in part E did not disadvantage Mr C. That was because RPA  decided to base 2006 scheme payments on the land area activated in part C of  the application form even if that was not supported by the entries in part E.  RPA also said that, even if Mr C had completed the blank part E, after  receiving an SPV1 letter, they would only have paid him for the entitlements he  had activated in part C.
73. On 14  September 2006 RPA telephoned Mr C. Their notes show that an RPA error had  inserted a forestry land use code on his claim on their system. They looked  into this error and found that Mr C had made no entry in column C8 of his claim  form so they asked him for the correct code. The note of the call said that Mr  C confirmed that the land use code for 2006 should be ‘as 2003 land use code’.  RPA added 2006 land use codes to all the lines of data in the claim, including  the lines of pre‑populated data that Mr C had not activated. Mr C has told us  that, in that call with RPA, he had told them that everything on his 2006 form  should be the same as his 2005 form. On the same day, 14 September 2006, RPA  wrote to Mr C. They said he had not completed the 2006 land use information and  he had told them the information should be the same as in 2003. They listed the  land use codes they had added. The letter made no reference to the missing  information on activation of the entitlements, although RPA had noted on their  system the eight lines that had ‘no other  info entered’.
74. On 18  September 2006 Mr C wrote to RPA. His letter enlarged on and clarified the  information about land use and mentioned a mapping amendment. On  22 December 2006 RPA sent Mr C an SPS 2006 entitlement statement. It  said that he had 35.48 entitlements with a total value of €13,468.92 and that  these figures might be revised.
75. In  February 2007 RPA wrote to Mr C about the SPS 2006 partial payments to be made  that month. They said that they would send him between 50 per cent and 60 per  cent of his 2006 SPS claim and pay the balance when they had completed the  claim validation. On 19 February 2007 they sent him a remittance  advice for £1,176.73 of SPS and an ex gratia payment of £50 (resulting from a  mix‑up in his 2005 payment details, which I explain in the second section of  this chronology), to be paid within 10 working days. Mr C queried this payment  on 20 and 22 February 2007.
76. On  5 March 2007 Mr C told RPA that he had had to borrow money from the  bank and asked why his 2006 SPS partial payment was lower than he had expected.  RPA told him that only one field had been activated. On 12 March 2007  he telephoned them again and they said they were looking into his claim  urgently. On 16 March 2007 they asked their scheme management unit whether his  failure to activate his entitlements at column C10 could be considered as  ‘obvious error’.
77. On 26  March 2007 Mr C telephoned RPA again. On 30 March 2007 the scheme  management unit decided that ‘obvious error’ was not appropriate in Mr C’s case  because there was no inconsistency within the claim form which would suggest  any intention to activate entitlements.
78. On 2  April 2007 RPA received a request from the Tenant Farmers Association, one of  their significant farming stakeholder groups. They asked RPA to look at Mr C’s  case. They explained that Mr C was profoundly deaf and set out the mistake Mr C  had made in his 2006 SPS claim. They said that, given Mr C’s age and  disability, they hoped RPA would show some flexibility. On 3 April 2007 RPA  tried to contact Mr C by telephone to update him and on 4 April 2007 the RPA  chief executive wrote to the Member, who had also intervened. The chief  executive apologised. He said that Mr C’s 2005 claim was going through  what he called a redefinition process (see glossary on entitlement corrections)  that would enable additional payments. But on the 2006 SPS claim he said that  RPA had no scope to apply the ‘obvious error’ provisions.
79. On 11  April 2007 Mr C wrote to RPA saying that he wished to activate his entitlements  for the 2006 SPS claim. He said that it appeared that column C10 of his claim  was not completed properly. Mr C said that, unfortunately, due to a number of  other outstanding issues with the SPS, including missing entitlement statements  and incorrect historic figures, he could not remember who he had spoken to and  why the column C10 was not activated. Mr C said that he hoped the situation  could now be quickly rectified and the correct payment could be issued. On  23 April 2007 Mr C’s Forest Friendly farming adviser called RPA  saying that he understood that Mr C had not activated his entitlements but he  was reluctant to appeal as that would cost Mr C a further £100. The  adviser said that Mr C was facing other issues: vandals had burned down his  barn; his car had been stolen; and the people who rented land from him had not  paid and that matter was going to court. RPA said that they would look at  Mr C’s claim again the following week.
80. On 4 May  2007 RPA updated Mr C. On 14 May 2007, after he telephoned them, they gave him  a further update, noting that it was difficult to communicate with him because  of his hearing aid. Later in May 2007 an RPA officer, who had reviewed  Mr C’s case, recommended that RPA should accept his positive response for  information on completing column C8 as his indication to activate his claim for  payment. The papers show that, in reaching this recommendation, RPA compared  Mr C’s case with a similar one, where they had accepted that they should  have activated the claimant’s entitlements. The scheme management unit said the  two cases were different and rejected the recommendation. Separately, RPA noted  that Mr C had not activated his relevant common rights on his 2006 claim but  that he had written to RPA later about activating them. RPA noted that they  should treat that as ‘obvious error’. However, on 31 May 2007 RPA  wrote to Mr C saying that they upheld their original decision to refuse full  payment for 2006. On 18 June 2007 RPA sent Mr C a payment statement. It  said he was due £632.94 in SPS.

Mr C’s Stage 1 appeal about his  2006 SPS claim

81. On 25  June 2007 RPA received Mr C’s Stage 1 appeal. He said that the 2006 claim form  had had a dark pre‑populated ‘X’ in the box for activation and it was his  understanding that he did not have to write over it again, as it was already  marked. Mr C noted that, in the 2007 SPS claim forms, this principle had been  continued for all the field data sheets, so the default position was  activation. Mr C went on to say that he had told RPA that his land holding had  not changed from the previous year and he had asked the officer to amend the  2006 form to the 2005 figures. Mr C said that it did not appear that those  amendments had been made. He said that he was experiencing a few problems with  RPA at the time he had completed his 2006 SPS claim form and that having to  deal with those unresolved issues muddled his focus on being able to deal with  what was meant to be a simplified system. Mr C added that he was sure that  a number of those issues had come about because he was hard of hearing and  staff could not understand his handwriting. He also said that RPA had refused  to give him a single point of contact, which had not helped matters, and he  described some separate problems he was experiencing. On 26 June 2007 RPA paid  him a top‑up of £56.21 for his 2005 SPS claim because they had decided to  increase the land area covered by his claim. Also in June 2007,  Mr C’s family doctor provided a letter saying that Mr C had been suffering  from gastritis since April 2006 and his symptoms seemed closely related to  stress.
82. On 30  October 2007 RPA sent Mr C their decision to reject his Stage 1 appeal. In  November and December 2007 he was in contact with RPA about their view on his  common land rights. In December 2007 Farm Crisis Network intervened in his  case. They said they were worried about the effect on Mr C of going through the  Stage 2 appeal and they asked RPA to reconsider matters.

Mr C’s Stage 2 appeal about his  2006 SPS claim

83. In  January 2008 RPA extended the deadline for Mr C’s further appeal from  31 December 2007 to the end of January 2008. They also decided  to make Mr C an early payment of his 2007 SPS claim because of concerns that he  was suffering financial hardship. On 22 January 2008 Mr C, with the  help of Farm Crisis Network, sent RPA his Stage 2 appeal. The RPA panel hearing  was on 5 March 2008. The Member intervened again at this stage to support Mr  C’s case, and specifically mentioned the effect of his deafness on his dealings  with RPA. On 31 March 2008 RPA sent Mr C the Minister’s decision to reject his  appeal.
84. On 1 May  2008 RPA wrote to Mr C in response to his letter of 8 April 2008. They said  that they did not consider that RPA had discriminated against him as a disabled  person through their handling of his appeal. They said that Stage 1 of the  appeal was a paper-based procedure; and at Stage 2 Mr C had opted for an oral  hearing. They noted that he was accompanied to that appeal by someone from the  Farm Crisis Network who, they understood, presented his case to the panel.
85. On 10  June 2008 RPA asked Mr C to repay £225.76, which they said they had overpaid  him for 2006 SPS claim. They wrote to him again about this on  19 August 2008. On the same day the Member referred the complaint to  the Ombudsman. RPA looked into the overpayment at Mr C’s request and on  2 September 2008 they told Mr C that the overpayment was correct and  that he would have to repay it.

Mr C’s other dealings with RPA  from 2005 onwards

86. Mr C had  three long-running queries with RPA before he realised there was a problem with  his 2006 SPS claim. The first query flowed from a mix‑up on his bank details in  November 2005 to May 2006. The second query was about the area of  land that RPA had included in his SPS claim, particularly their treatment of  his rights on common land. The third query was about the make‑up of the  historic element of his entitlements (see glossary on ‘reference period’). I  have set out the main points of his dealings with RPA on these three issues in  chronological order. His contact with them about his 2006 SPS claim, set out in  a separate section, was in the context of these other queries.
87. On  3 November 2005 Mr C’s new bank sent RPA his new account details. Their  letter included a signed instruction from Mr C. On 14 November 2005  RPA wrote to Mr C. They thanked him for the change of details, but said: ‘We can only make the changes with the signatures of all  authorised persons. We enclose your original documents. Would you please  provide full name(s) and signature(s)  on these…’ to authorise the changes to trading name, address, bank details,  other. It is unclear from the papers we have seen why RPA needed these details.
88. On 6  March 2006, RPA made an Entry Level Stewardship scheme⁹⁷ payment of  £575.50 to Mr C’s old bank account. Mr C telephoned them. On  10 March 2006 Mr C wrote to them saying that they had paid it  into a closed account. We have seen a reply from Mr C to RPA’s request of  14 November 2005, written on the letter they had sent him. It is date‑stamped  by RPA as received on 27 March 2006.
89. On  6 May 2006 Mr C wrote to RPA about the area of land they were using  for his SPS claim.
90. On 10 May  2006 RPA sent Mr C’s old bank £5,481.51 of his 2005 SPS claim. On  17 May 2006 he told RPA again, by letter, that he had changed banks.  He said he had told them so over six months earlier, but they had paid over  £6,000 (in total) into his closed account. On 23 May 2006 he  telephoned RPA about the incorrect payment. The next day RPA noted that they  had received Mr C’s instruction to amend his details.
91. On 26 May  2006 Mr C wrote again to RPA, replying to their letter of 17 May, about  the area of land they were using for his SPS claim.
92. On 6 June  2006 RPA told Mr C that they would reissue his payment once his old bank had  returned it. It is not clear which payment they meant, or whether they  understood that two payments had gone to the wrong account. On  9 June 2006 Mr C wrote again to RPA about their handling of his bank  details. He also complained that his maps had been disregarded when they calculated  his payment.
93. On 30  June 2006 RPA, contacted by Mr C, told him that they would look into matters,  which they did. On 4, 13, 17 and 24 July 2006 Mr C, or someone acting  for him, telephoned RPA. On 26 July 2006 RPA noted that his old bank  had returned the SPS payment. RPA paid it to the correct account on  28 July. On 25 July 2006 the Member had complained to the chief  executive of RPA about the handling of the bank details. RPA’s customer  relations unit looked into what had happened.
94. On 3  August 2006 Mr C telephoned RPA to say that he had received his SPS payment  (for SPS 2005) but it covered only 35.48ha instead of 38.64ha. RPA said they  would look into that. He confirmed that telephone conversation in writing the  next day.
95. On  5 August 2006 Mr C sent RPA a letter from his new bank which put the  additional interest he had incurred from 10 May 2006 to  27 July 2006 at £91.27. He had also incurred a £50 overdraft  arrangement fee. Mr C told RPA that he expected either them or his old bank to reimburse  him.
96. On 23  August 2006 RPA’s chief executive sent the Member a letter of apology and  explanation about the payment of Mr C’s Stewardship and SPS claims. He  apologised for the inconvenience and confusion that their failure to properly  update Mr C’s bank details had caused. Without covering all the facts, the  letter said that RPA had mistakenly updated only one of Mr C’s SBI numbers and  had corrected that after Mr C wrote to them on 17 May 2006. It said  that they had paid the Stewardship claim to Mr C’s old bank account on  6 March 2006, but that this bank account had been open until  11 April 2006. It also said, in contrast to the facts we have seen in  the papers, that RPA had reissued the payment to Mr C on 23 May 2006  and the balance of the payment had been paid to him on 28 June 2006.
97. In  September and October 2006 Mr C and RPA were in touch with each other, but  RPA did not always get through to Mr C when they telephoned him. On  3 November 2006 they replied to Mr C’s letters of 26 May and  28 September 2006. The gist of the letter of 3 November 2006 was  this. It listed the fields that Mr C had put on his 2005 SPS claim and the  area he had established and activated for each field. The figures in the letter  added up to 43.43ha, including three fields with non‑Rural Land Register  references. RPA said they had established the Rural Land Register references  for those fields. The letter said that PT[…] and PT[…] were duplicates of  fields with Rural Land Register references that were already on the claim.  (Removing the duplicate fields reduced the land total to 38.39ha.) The letter  also said that field PT[…] was on the claim as 7.35ha but on the Rural Land  Register as 7.33ha – RPA said that had corrected that. (This correction reduced  the land total to 38.37ha.) Finally, RPA said that they had calculated the  entitlements as covering 35.48ha, but they had input one field […] incorrectly.  They said ‘steps are being taken to rectify this omission’. Mr C has told  us that he remains unconvinced by RPA’s figures, because their information has  been so inconsistent.
98. On 5  November 2006 Mr C wrote to RPA saying that it was RPA’s responsibility to  recover his Stewardship payment. He said that he had had to raise an extension  overdraft to cover his business expenses. On 14 November 2006 RPA told Mr C, by  letter, that they were unable to reimburse the costs that he had requested.  Their letter gave a different account of what had happened from the account  given in the chief executive’s letter of 23 August 2006, and  concluded that RPA had made the original payment acting on the information  available to them at that time. Mr C has told us that he believes RPA are  incorrect on this point.
99. On 19  November 2006 Mr C wrote to RPA saying that, as he had already told them, he  believed his agent had miscalculated the area of his holding. In commenting on  a draft of this report, Mr C has told us that he (now) believes it was RPA  that miscalculated, not his agent. He said that this miscalculation had  affected his SPS payments as his holding was 10 hectares less than it  should have been.
100. On 21  November 2006 Mr C challenged the account RPA had given in their letter of  14 November 2006 about his bank payments. He also asked if one person  could look after his case. We have seen no sign that RPA acted on that request,  but we have seen that, at the end of November 2006, RPA considered whether  or not to offer Mr C financial redress. An RPA lawyer confirmed that a £50  payment by way of apology was justified given the error RPA had found. (RPA  started the work needed to make that payment, but lost the payment submission.  They then reconsidered the question of interest, but the papers we have seen  are unclear about the final reason why they decided against making an interest  payment.) RPA finally sent their letter about the payment by way of apology on  8 February 2007 and made the £50 payment itself on  18 February 2007.
101. On 6  December 2006 RPA wrote to Mr C, in response to a query he had made about the  calculation of the historic element of his SPS entitlements.
102. On  16 December 2006 RPA told Mr C, by letter, that his old bank had told  them that they had received his Stewardship payment on 6 March 2006  and that he had had access to it until 11 April 2006. They said that RPA had  successfully paid his Stewardship claim and he should take the matter up with  the bank if he wished. On 21 December 2006 Mr C asked for further  clarification and repeated that it was RPA’s responsibility to recover the  Stewardship payment or to reissue it to him with interest.
103. In  January and February 2007 Mr C continued to dispute RPA’s stance on the bank  details, the land area included in his claim and their calculation of his  entitlements. His Forest Friendly Farming adviser intervened on his behalf and  asked RPA, twice, to give Mr C’s case to a single person to resolve, given Mr  C’s hearing difficulties. In March 2007 Mr C telephoned RPA about the problems  he had had with his 2005 and 2006 SPS claims. He said that it was causing him  financial trouble and he had had to borrow money from the bank. Mr C queried  his 2006 SPS partial payment with RPA as it was lower than he thought it should  have been. RPA told him that only one field had been activated and this would  account for the lower payment. I have covered the facts of Mr C’s 2006 SPS claim  in a separate part of this chronology. In the same month, the Member intervened  again, asking RPA to look into the various problems in Mr C’s case. On  28 March 2007 RPA sent Mr C a copy of the maps for his holding.
104. In  November and December 2007 RPA looked into Mr C’s claim on the relevant  common. They asked him for more evidence of his rights on the common and  explained what they needed, but the material he then provided was insufficient.  In January 2008 they removed the relevant common grazing rights from his  2007 SPS claim. In February 2008 RPA accepted some further evidence from  Mr C (a mortgage agreement) as confirming his rights. On  28 February 2008 they told him his allocation details for the  relevant common were:

     A Area of common 79.23  hectares B Agricultural area of  common grazed 79.23  hectares C   Livestock units (LUs)  entitled to be grazed on the common 252  LUs D   Livestock units he was  entitled to graze on the common 5  LUs.

     RPA told  Mr C that his total common land allocation was 1.572ha (B ÷ C x D).

105. Mr C  disagreed with RPA’s calculation. In March 2008 he asked RPA why he had  been allocated only 1.572ha when in 2001 he had been awarded common land of  2.08ha and five animal grazing rights. He sent them a copy of a RPA letter  dated 19 December 2001 about his common land forage area allocation  for 2001, which said the common area (and grazeable forage area of the common)  was 104.82ha, not 79.23ha. It said:

     A	Total area of common	104.82ha
     B	Total grazeable forage  area of common	104.82ha
     C	Total LUs entitled to be  grazed on the common	252
     D	Total LUs Mr C was  claiming on the common	5
     E	Mr C’s total forage area  allocation for the common	2.08  a (B ÷ C x D)

106. Mr C’s  contact with RPA about his common land allocation continued throughout 2008,  without RPA’s letters of explanation resolving matters. At  30 April 2009 Mr C’s grievances about the payments to the closed bank  account in 2006 and about the land area covered by his SPS claim (including his  common land rights allocation) were unresolved in his view.
107. In summer  2010 Mr C told us that he remained unconvinced by RPA’s decision on his common  land and the approach they took to his complaint about his bank account, as  well as their decision about the activation of his 2006 claim.

Mr C’s description of the effect  on him of receiving a reduced 2006 SPS payment

108. We asked  Mr C how his problems with the RPA had affected him. He made a joke about not  having a nervous breakdown and explained he was just annoyed that RPA would not  listen to anything he said. He said he wanted the money. He said that in 2007,  when his SPS payment was less than expected, he had just had to manage on his  overdraft. But his bank had been after him all the time. He has told us that in  2008 he sold his interest in some land in order to clear a loan and interest  that had built up partly because RPA had not paid his 2006 SPS claim as  expected. We noted that relatively small things had added to his frustration.  For example, Mr C told us he had had to pay excess postage when RPA sent him  the papers for his appeal and that he always used registered post for RPA now,  since they lost a recorded delivery letter (about milk quota).

Some comments from Mr C on a draft of this  report

109. We shared  a draft of this report with Mr C and his representative. In commenting on the  draft, he said:

     ‘I am a cheerful personality and try not to get depressed. But [this  experience with RPA was difficult, what] with the loss of my ex‑wife Pauline and partner during July 2004 with leukaemia  after 44 years, and the RPA attitude, [and] finance for the business is hard to find as I was not allowed my full  entitlement under SPS.’

110. Mr C has  also said that he was disappointed that our recommendation for remedy stopped  short of asking RPA to pay him the full amount of his SPS 2006 claim. He said  that RPA had received his claim on 4 May 2006. The extended deadlines that year  meant they had time to return his claim, he said. He also told us that he had  told RPA several times about his deafness. Mr C and his representative have also  told us that they believe RPA should have understood from their contact with Mr  C in September and November 2006 that he had intended to activate the same  entitlements for SPS 2006 as he had for SPS 2005.

Mr D

About Mr D

111. In 2005 Mr D ran a small arable farm, of about 40 hectares (100 acres), in the East of England. He also did some contract farming work. The value of his 2005 SPS claim would have been about £8,094⁹⁸ if he had activated his entitlements as he intended. His wife ran a small toy business. Mr D is still farming, but his wife closed the toy business in 2008.
112. Mr D has said that in 2005 he relied on the original guidance sent out by RPA when he completed the claim form, although he probably had received the supplementary guidance they issued in April 2005. He has said that he found the timescale for completing the claim was tight. At the time, his father was dying.

The 2005 claim

113. On 11 May 2005 RPA received a 2005 SPS claim (SP5 – see glossary) from Mr D. His form applied to establish his entitlements but not to activate them. On the form he had said 'no' to the question about applying to activate entitlements. He had made no entries in column J of the field data sheets which asked for the 'area for which entitlements to be activated'. He did not give a date in response to the question about the date from which land would be at his disposal for a continuous period of 10 months. Mr D had claimed protein crop premium, which was a separate subsidy from SPS.

RPA's handling of the claim from May 2005 to March 2006

114. RPA completed their initial checks on the form on 12 May 2005 and the further checks when keying in the claim on 27 July 2005. The papers we have seen show no contact between RPA and Mr D until 16 February 2006, when RPA wrote to Mr D with his definitive entitlement statement (see glossary). This showed he had 36.57 entitlements worth €11,869.60 (£8,094 at the 2005 SPS exchange rate).
115. On 27 March 2006 RPA wrote again to Mr D. They said that they had completed the processing of his 2005 claim and had made a payment. The payment statement they enclosed showed a payment of £1,356.56, but penalties had reduced it to nil. (Mr D has said that he has not received an explanation for the information on the payment statement, which should not have included any penalties.) He has said he contacted his local rural support group and they suggested that he may have omitted to activate his entitlements.

Mr D's representations to RPA from April to October 2006

116. On 4 April 2006 Mr D telephoned RPA asking why he had not been paid anything. They told him that he had not activated his entitlements. The same day, he wrote to them. On 21 April 2006 RPA noted that Mr D had asked them if his mistake, in not activating his entitlements, could be amended now. RPA noted that they were awaiting guidance from their RITA delivery expert (see glossary).
117. On 24 April, 4 May and 10 May 2006 Mr D telephoned RPA about his claim. They were unable to explain matters, but said they were waiting for advice from their RITA delivery expert. On 11 May 2006 RPA sent a standard letter to Mr D about partial payments (see glossary). They said that that there had been problems with their delivery of SPS payments.
118. On 16 May, 26 May, 7 June and 20 June 2006 Mr D, or his wife, telephoned RPA to ask for updates on the claim. By this stage Mr D's case was being considered by the SPS scheme management unit. On 29 June 2006 RPA replied to his letter of 4 April 2006. They said that he had omitted to complete column J on his claim and they were in the process of 'implementing an adjustment mechanism' which would enable them to recalculate Mr D's entitlements and make any associated payments if possible. That might take some time, they said, but they would contact him again if his claim was to be adjusted. They asked Mr D not to contact them further as they were striving to make payments on all claims, including his, as quickly as possible.
119. On 12 September 2006 Mr D telephoned RPA again saying that they had agreed to look into his case in June 2006 and he was still awaiting a response. On 19 September 2006 the Member (Mr Alistair Burt MP) wrote to Lord Rooker, the Minister responsible for RPA. He was concerned that RPA had not told Mr D whether or not he would be paid for 2005. He said Mr D was: 'left completely in the dark about any future payments'. On 2 October 2006 Lord Rooker wrote to the Member. He explained that RPA had thoroughly investigated Mr D's case and had unfortunately been unable to accept the errors on his claim form under the 'obvious error' provision and therefore RPA would be unable to make payment for his land that had been established, but not activated. Lord Rooker said that Mr D would have qualified for payment, but the information in his claim form was consistent in showing no wish to activate his entitlements. The Minister added that applicants were under no obligation to activate their entitlements and a large number of applicants had chosen only to establish them. He explained how Mr D could appeal against RPA's decision.
120. On 13 October 2006 Mr D telephoned RPA; his telephone bill shows that the call lasted just over three minutes. Mr D has said that during that call an officer called Rebecca (reference 9606) assured him that he would definitely be paid, but she could not say when because 3 per cent of claims were outstanding. (RPA have told Mr D that they have no record of that telephone call.) No payment arrived. Mr D has said: 'Since I had made no alternative funding arrangements, things were getting desperate'. On 19 October 2006 he telephoned RPA again. RPA agreed to pass on a message. On the same day they noted that Lord Rooker had sent a letter (to the Member) with a decision to turn down Mr D's representations. They wrote directly to Mr D. He then telephoned RPA saying that he wanted to appeal against their decision not to pay him for his 2005 SPS claim. He has told us that, if RPA had given him that decision earlier, he would have gone through the appeal process sooner. He has said that staff on the helpline had always been encouraging and had always called back when they said they would, even though it might take a week at times. He said that, although staff would not commit themselves, they had said that it appeared to be an 'obvious error' and that they thought it could be sorted out. The letter sent in June 2006 had confirmed his impression that he would be paid eventually. From his point of view the letter was not generic, but was intended for his particular case – it had contained his reference number and had said that claims 'including yours' would be paid as soon as possible.

Mr D's appeal – Stage 1, from November 2006 to February 2007

121. On 13 November 2006 RPA received Mr D's appeal against their decision not to make any payment for his 2005 SPS claim. He said that:
     • he had always intended to claim payment and did not change his mind during the process;
     • he had always claimed IACS payments and his business was unlikely to survive without them;
     • he accepted that he had misinterpreted the rules and had placed undue weight on paragraph 320 on page 86 of the 2005 SPS Handbook (Annex B, paragraph B2), which said that you could not activate entitlements on land where entitlements have not been established;
     • he had assumed activation would follow establishment;
     • he had used the helpline on a couple of points but he had believed he was clear on this point;
     • with hindsight, he could now see that elsewhere in the 2005 SPS Handbook it said that you were supposed to establish entitlements and activate them on the same form, but that was a new approach and he had not realised that was the case;
     • when he realised he had made a mistake, he told RPA, who gave him generally positive assurances that it was being sorted out and he got the impression that he would, at some stage, be paid; and
     • on 13 October 2006 RPA had told him categorically that he would be paid; on 19 October 2006 they wrote to him to say he would not be paid.
122. On 14 November 2006 the Member wrote again to Lord Rooker about Mr D's case. Among other things, he referred to an advertisement in the Farmers Guardian of 21 April 2006 which indicated that the failure to activate entitlements was one of the three most common errors on the form.
123.  On 9 February 2007 the customer relations unit officer looking after Mr D's case, received legal advice on his appeal. The RPA lawyer said there was no legal basis to use the 'obvious error' provisions or the 'force majeure' provisions to allow payment of the claim. On 14 February 2007 RPA upheld the decision not to make a payment to Mr D and, the following day, sent him the Stage 1 appeal decision. It noted that:
     • Mr D accepted that he had misinterpreted the rules, because he believed that he could not activate his entitlements where they had not been established and he therefore assumed that activation would follow establishment;
     • it was clearly laid down in the 2005 SPS Handbook that establishment and activation would be undertaken at the same time on the claim form and that applicants should enter the area for each parcel of land on which they wished to activate entitlements in column J;
     • it was unfortunate that Mr D did not see this information until after he had completed the form; however, by signing the form, Mr D was confirming that he had read and understood the guidance notes;
     • it was unfortunate that Mr D mistook the validated entitlement statement to mean that he would be receiving a payment, but that letter was a generic letter sent to all SPS applicants and it stated: 'If you have applied to activate entitlements under the Single Payment Scheme in 2005 your payment will be based on the entitlement information shown in this statement', which indicated that payment was only made when entitlements had been activated;
     • Mr D's claim had been considered, and rejected, under the 'obvious error' provision. Mr D's circumstances in early 2005 did not amount to 'force majeure' and, in any case, 'force majeure' did not cover the amendment of errors in a claim form;
     • RPA appreciated the difficulties that Mr D might have faced at the time of completing his 2005 claim form, however, they considered that he could have sought help with the completion of his form; and
     • it was the applicant's responsibility to ensure a complete and correct claim form was received at RPA within the deadline and that was a matter that was within Mr D's control.

Mr D's appeal – Stage 2, from March 2007 to July 2007

124. On 21 March 2007 RPA received Mr D's Stage 2 appeal. He said that the Stage 1 decision appeared to be based around 'obvious error' or 'force majeure' and that was not his argument. Mr D said that he had given details of his circumstances to indicate the pressure he was under at the time of completing his 2005 claim. Mr D said that he had made an honest mistake and the information he had received from RPA and the treatment he had received from them throughout 2006 had led him to believe that his mistake could, and would, be rectified. Mr D said that RPA had acknowledged in 2006 that common errors on claims for that year had included the absence of information needed to activate entitlements. He also said that the 2007 SPS instructions had been revised and were much clearer and shorter. Separately, Mr D also asked RPA to take account of his account of the October 2006 telephone conversation in which RPA had told him he would be paid. They did this in April 2007 by amending the chronology included in the record of the Stage 1 appeal decision. But they took no further action about the alleged misdirection.
125. On 8 June 2007 an RPA appeal panel heard Mr D's appeal. It upheld RPA's original decision that Mr D had not complied with the SPS rules in his claim. The panel noted that they reached their decision notwithstanding Mr D's account of receiving misleading information from RPA about his payment in October 2006. Mr D has said that he received the impression that RPA staff influenced the panel's decision making, which made him feel the hearing was biased in RPA's favour. The Minister accepted the panel's recommendation. On 11 July 2007 RPA wrote to Mr D saying that the Minister had rejected his appeal. In August 2007 Mr D met the Member, who said he would make representations to the Minister. On 6 May 2008 the Member referred the complaint to me.

Mr D's description of the effect on him of losing the 2005 payment

126. Mr D has told us that for 2005 his farm accounts showed a current account credit balance of £4,000. In 2006 there was an overdraft of £8,000 and in 2007 the overdraft was £5,500. He gradually increased his overdraft facility, which peaked at £13,000. He has said:

     '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 reversed.'

     He has talked about the impact on his wife's toy business (which, without his cash support, closed in 2008 after 19 years' trading); about having to sell land; about cutting household costs, including family holidays; about cutting investment in machinery and maintenance of the family home; and about losing confidence in his ability to complete the forms – he now pays an agent £300 a year. The situation was particularly difficult for his wife. He has said she feared the worst and became very depressed. Mr D's letter, setting out the effect on him, the business and the family, is in Annex C to this report.

Further developments

127. As part of our work in assessing whether or not to investigate Mr D's complaint, my Office asked RPA why Mr D had received no payment for protein crop premium for 2005. RPA looked into Mr D's claim for protein crop premium and, as a result, paid him £327.14 on 30 January 2009.

Some comments from Mr D on a draft of this report

128. We shared a draft of this report with Mr D and his representative. Mr D's representative told us that Mr D felt that justice had been done and he would like the Ombudsman to 'know that this piece of work had restored his faith in our democracy'. The representative said: '[Mr D's] family have really struggled at times over the last five years, and the recommended payments will go a long way towards getting their lives back to normal'.

Mr and Mrs E

About Mr and Mrs E

129. Mr and Mrs E were sheep farmers in 2005, and still are. They run a flock of about 600 ewes in the East of England on land which they hold on 50‑week grazing agreements with different people. The agreements are specifically designed not to give them any rights over the land. Their 2005 SPS claim would have been worth about £5,355⁹⁹ if they had activated their entitlements as they had intended.
130. Mrs E has said that in May 2005 she had not understood what RPA meant by 'a forage area obligation', for example, in their guidance to claiming SPS. She has said that she and her husband could not afford to use an agent to look after their paperwork. However, someone in RPA's Cambridge office who 'knew everything inside out' had always been able to answer their queries. That service was no longer available in 2005 and RPA's new customer service centre dealt with all telephone calls. Mrs E has also said that in early 2005 she was receiving chemotherapy treatment for cancer.

The 2005 SPS claim

131. Mrs E's recollection of filling in her 2005 SPS claim is this. She had filled in the claim form and had ticked the box for activation. She then went through the form with a neighbour and this led her to query whether or not she should activate. She called the RPA helpline to check her understanding, they told her that she could not claim for special entitlements unless she had a minimum of 0.1ha of land registered and that she should ring another helpline. She has told us that this did not surprise her since a friend had been told the same thing. She spoke to two other bodies, neither could help her. Mrs E's telephone records, which we have seen, show that she telephoned RPA on 5 May 2005 at 15.28. The call lasted five minutes. She called another rural development body at 15.35 and this call lasted just over 4 minutes. She called the Rural Development Service, a non‑departmental body that answered to Defra and is now part of Natural England,¹⁰⁰ at 15.44. That call lasted almost 7 minutes. Her recollection is that the Rural Development Service referred her back to RPA.
132. RPA later told Mrs E they had no record of her telephone call. But we have seen a note made on 5 May 2005 at 15.36 saying that she had not received her SP5a claim form, or the CREG01 form used to register her business with RPA. The note said that RPA had 'sent a RITA request', which we have taken to mean a request for the forms. Mrs E was already registered with RPA and has said that she did not ask for or receive a fresh set of forms.

RPA's handling of the claim from May 2005 to October 2006

133. RPA received Mrs E's 2005 claim form on 12 May 2005. Question 2 on the claim form was about establishing entitlements subject to special conditions – this covered people like Mr and Mrs E who had livestock, but no land. Mrs E said 'yes' to establishing entitlements subject to special conditions. Question 4 was about the activation of entitlements subject to special conditions. It said: 

     'If you have applied to establish entitlements subject to special conditions, please confirm that you wish to activate as many of these entitlements as can be supported by your agricultural activity in 2005.'

     The claim form showed that Mrs E had originally marked 'yes' to this question, but had amended the form on 9 May 2005 to 'no'.

134. The claim passed RPA's Level 0 validation check (see glossary on Validation) on 13 May 2005. An RPA officer signed the checklist and made a note saying: 'Producer has the choice whether or not to activate entitlements and he has not'.
135. On 21 February 2006 RPA sent Mr and Mrs E a non‑validated entitlement statement. It showed two special entitlements with a total value of €7,852.63 (£5,355). They said they would not be able to make any payments until the claim had been validated and if they did not make contact, there would be no need to contact them.
136. On 19 March 2006 RPA carried out a further check of the 2005 claim, recorded on a form called a Processing Special Entitlements (SEs) – Checksheet. They noted that they had not received a SP16 form from Mr and Mrs E. (The SP16 form provides details of a farmer's livestock.) The check also noted that Mr and Mrs E had said they did not want to activate special entitlements on their claim form and no payment should be made to them. On 24 March 2006 RPA wrote to Mr and Mrs E. The letter said:'You did not return an SP16 form which indicates you did not have any livestock from 1 January 2005 to 1 November 2005' and without that, their entitlements had not been'activated' and they would not receive a payment on them for 2005. (There had been no mention of an SP16 on the SPS claim form or in the 2005 SPS Handbook, but a leaflet enclosed with farmers' entitlement statements said that farmers who had established special entitlements, 'should have already received from the RPA form SP16'.) The letter included a standard paragraph asking farmers not to contact RPA.
137. On 5 April 2006 RPA sent Mr and Mrs E a definitive entitlement statement. This showed entitlements amounting to €7,852.63 (£5,355) for the 2005 scheme year – the same as in the non‑validated statement. On 10 April 2006 Mrs E sent RPA a completed SP16 form and said she hoped that the information she had supplied would be sufficient to activate her claim. She said that she had contacted RPA on 28 March 2006 and on 3 April 2006 requesting the SP16 form, but it had not arrived. The NFU had given her a copy.
138. In May 2006 RPA returned Mr and Mrs E's 2006 SPS claim, because they had not provided any field data or activated their special entitlements – without one of those actions the form could not be lodged. (In commenting on the draft report, Defra and RPA said: 

     'The letter is a standard letter sent to all applicants who have failed to enter sufficient detail on to their form meaning it cannot be validated. The letter was not advising with regard to an obvious error, it simply advised that the form could not be processed as it did not contain sufficient information.')

     Mrs E replied by telephone and in writing. In June 2006 RPA wrote to Mr and Mrs E saying that they had been allocated special entitlements for 2006. Mrs E rang the RPA helpline on 29 September and 3 October 2006 about her 2005 payments. The person who dealt with the second telephone call told Mrs E that there was an issue with the special entitlements element of the claim because she and Mr E had confirmed that they did not want to activate the entitlements. They said RPA were looking at her case to see if they could accept the mistake on the form as 'obvious error'.

139. RPA wrote to Mr and Mrs E on 6 October 2006. The letter said: 

     'As you did not make an amendment to your claim, or notify us of any error on your application from before our decision was communicated to you, it is now not possible to amend your application to activate Special Entitlements in 2005. You are, however, still able to apply to activate the Special Entitlements you hold in future scheme years, including 2006.'

Mr and Mrs E's representations to RPA from October 2006

140. Mrs E complained to RPA on 30 October 2006. She said RPA staff had told her in May 2005 that she was unable to activate entitlements because she and her husband did not own any land to claim against and she described RPA's contact with her about the SP16 form. She asked RPA to look into her case.
141. On 1 November 2006 RPA telephoned Mrs E to confirm she wanted to activate her special entitlements. Later the same month, on 24 November 2006, an NFU representative contacted the Member's office about Mr and Mrs E's case. The Member's office referred the complaint to RPA the same day.
142. RPA wrote to Mr and Mrs E on 1 December 2006. They had looked into her case, but they said they had no scope to 'reactivate' the entitlements for 2005. They also explained matters to the Member's office.

Mr and Mrs E's Stage 1 appeal – January 2007

143. RPA received Mrs E's Stage 1 appeal form on 30 January 2007. Among other things, she said that:
     • the 2005 Handbook's guidance on special entitlements was 'incomprehensible' and that she had initially indicated on the form she wanted to activate them; and
     • because the guidance was so confusing, she had telephoned RPA's helpline and been incorrectly told that she had to register at least 0.1ha of land to activate special entitlements.
144. In February 2007 RPA telephoned Mrs E and again asked whether she wanted to activate her entitlements for 2006. She said yes.
145. On 18 April 2007 an RPA lawyer commented on RPA's draft appeal decision about Mr and Mrs E's case. The lawyer said she agreed that the 'obvious error' regulations did not apply in this case. She also said that the administrative error (of suggesting in March 2006 that but for a missing form, RPA would have activated their entitlements) did not amount to maladministration. However, she also said that the RPA might want to consider the claims that the Handbook advice was confusing and that the customer helpline's advice was poor. She referred to previous criticism of the helpline. She gave no direct advice on how RPA might take those claims into account.
146. On 23 April 2007 RPA sent Mr and Mrs E the Stage 1 appeal decision, rejecting the appeal because there was no scope to allow it within the 'obvious error' regulations. The case summary (but not the covering letter) apologised for the confusion about the SP16 form – they had told Mr and Mrs E that they should have received and returned an SP16, but RPA had not sent them one. It also explained that RPA had no record of a telephone call with Mrs E in May 2005 and so they had no way of knowing what was discussed during the call or what advice was given. In commenting on a draft of this report, Defra and RPA said: 

     'RPA did advise that [Mr and Mrs E] had subsequently submitted an SP16 but that it could not be accepted as they had declared on their 2005 form that they did not wish to activate their entitlements subject to special conditions. RPA further stated that the SPS application form could not be amended to activate the special entitlements for payment as there was not an obvious error.'

Mrs E's Stage 2 appeal – June 2007 to April 2008

147. On 20 June 2007 RPA received Mr and Mrs E's Stage 2 appeal. Mrs E had taken legal advice about the appeal, thanks to a grant of £250 she received through her membership of the NFU. Among other things, she said:
     • she had been misled by Agency staff when she telephoned them on 9 May 2005;
     • she was entitled to expect that advice from the RPA's helpline would be correct and to rely on that advice and that RPA's duty to ensure the CAP fund was properly distributed encompassed a duty to ensure that applicants were given proper guidance and advice;
     • 'it is submitted that the RPA has checked the SP5 form for this sort of error/internal inconsistency in the years following 2005, and that if any consistency constitutes an obvious error in 2006, it will constitute an obvious error in 2005';
     • RPA had argued that having too little stock to activate all the entitlements could be a reason for not activating special entitlements, but Mr and Mrs E's SP5 form had showed they did have enough livestock units in that year; and
     • that the wrong and misleading advice Mrs E received should constitute exceptional circumstances, which would entitle her to have the claim reconsidered, because RPA had a duty to provide proper guidance and customers were entitled to rely on that advice.
148. On 25 June 2007 Mrs E provided a copy of her telephone records from April to July 2005. She said she had previously told RPA that she had contacted the RPA helpline on 9 May 2005, but it was on 5 May 2005. She said that after 'contemplating the confusing advice given for 4 days I then amended the form as instructed and sent it off on 9.5.05'. The Member also wrote to the Minister, drawing the appeal to his attention.
149. On 18 March 2008 an RPA appeal panel rejected the appeal. The note of the appeal panel decision said that, although Mrs E was sure she had been misled, there was no evidence to support her claim that she had been given incorrect advice; the answer given to question 4 of the claim form could not be considered to be an 'obvious error'; and there was no evidence produced to show that the RPA had given misleading advice. On 1 April 2008 the appeal panel secretary completed a submission to the Minister and on the same day the Minister accepted the recommendation to reject the appeal. On 2 April 2008 RPA sent Mr and Mrs E the decision.
150. The Member asked the Minister to reconsider the case, but he said that he was constrained by the Regulations and unable to grant the appeal. On 9 May 2008 the Member referred the complaint to me.

Mrs E's description of the effect on her of losing the 2005 payment

151. Mrs E has told us that she and her husband were 'getting on a bit' and usually paid someone to help out in busy periods. They were unable to do that without their 2005 SPS payment. She said, as a result, when it came to lambing in 2006 they were in trouble and did not even get all the sheep home. She said that they had called their son, who had dropped everything (he was self-employed) and came over to help them out. She said that he went home after lambing, put his house on the market, and came back to the farm to help them out permanently. Mrs E said they would not still be farming if it had not been for their son. Mrs E said it was very stressful; she was just getting over cancer and it had been a terrible time. She said they that they had incurred extra fuel and telephone costs and had to complete extra paperwork for the appeals, as well as the £100 cost of the appeal. Mrs E's son has told us that he considered they had lost about two day's business, which he defined as two nine‑hour days at £12.50 an hour.

Some comments from Mr and Mrs E on a draft of this report

152. We shared a draft of this report with Mr and Mrs E. They had no comments to make except to confirm the accuracy of the facts as we had recorded them.

Mr F

About Mr F

153. Mr F is a livestock farmer, farming about 5 hectares (12.4 acres) in the East Midlands of England. He rents his land. His holding includes the family farm's suckler cows. His family have a separate, larger holding, set up for dairy farming. The value of his 5ha SPS claim would have been about £12,080 in 2005¹⁰¹, if he had avoided making a dual claim for the land he used under a grazing agreement. This was a relatively large sum for the land area, which reflected the size of the historic part of his entitlements. Mr F's dual claim meant he paid a penalty for overdeclaration that wiped out his 2005 and 2006 payments as well as part of his 2007 payment. In 2005 Mr F was 47 years old.
154. Mr F has told us he had known the owner of the grazing land for some years and had a 'gentleman's agreement' with him about the land. The owner died in December 2004.
155. The medical evidence we have seen says that Mr F was completely fit and well until 1999 when poison contaminated his farm. A doctor's report prepared in February 2005¹⁰² said that he had severe chronic fatigue syndrome, and that his history was highly suggestive of organophosphate poisoning. It meant he was unable to work and run his business. The papers we have seen also show that Mr F had had a stroke in 1999. Mr F has told us that his health has improved very much since 2005. In his comments on a draft of this report, made through his representative, Mr F said that RPA had never taken his health status into account.
156. Evidence provided in September 2005, by a consultant physician and clinical toxicologist at Guy's Hospital in London, said that in 2003 Mr F had, with other assessments, been assessed for his cognitive and memory function. The doctor's letter said: 'This showed his verbal reasoning abilities to be less well developed than his non‑verbal abilities, with long‑standing learning difficulties in the verbal domain'. Mr F has told us that Guy's Hospital advised him to write things down as soon as he thought of them, as he would forget things very easily.

Mr F's request to change his reference period

157. In April 2005 Mr F completed a form asking RPA to change his reference period (form SP2). He said that a person had put poison on the farm and he provided papers to show the effect. He also gave RPA a copy of a letter to his GP from a specialist, dated 8 November 2004. The letter said that a fat biopsy suggested Mr F had had an abnormally high exposure to certain pesticides and set out how those might affect him. The letter said possible results included chronic fatigue syndrome and neurological damage. RPA have said they received both these documents.

The 2005 claim

158. In 2005 Mr F was looking after his SPS claim himself. Farm Crisis Network, now his representative, was not involved and Mr F has told us that he and his parents did not feel able to afford an agent to look after their separate claims. Mr F has said that on 1 April 2005 and 1 May 2005 he and his parents met RPA staff at the RPA office in Nottingham. His recollection is that the person he met at RPA made notes on his file about the meeting and added the papers provided by Mr F. He has said he had to book appointments to see an RPA official. Mr F's two letters to RPA, of 10 May 2005, refer to these meetings. RPA have no record of the meetings with Mr F on 1 April or 1 May 2005.
159. Mr F has told us he had two concerns when he met RPA: the effect of the organophosphate poisoning on the amount he would receive in his SPS claim; and the land covered by the grazing agreement. Mr F has told us that he asked RPA for advice on both points. He informed them that his landlord had died and explained that his landlord had told him he could use the land for grazing for as long as he wanted. Mr F's memory of what happened is that RPA told him to write separate letters, one about his SPS claim and the other about his health problems.
160. On 20 April 2005 the late landlord's agent wrote to Mr F. His letter said:

     '[The late landlord's sister] has been in touch with me and she says you've told her you'd like the grasskeeping again. There is still £800 outstanding from last year so before I can consider a new agreement I must be paid up to date.'

161. Mr F has said that the rent was part of the reason why he did not go to the agent with his query about who should claim for the land covered by the grazing agreement. In Mr F's view, the rent was not a problem. He has told us that he saw the agent regularly at auctions (the agent was also the local auctioneer), but the agent never raised the issue about his rent money. In any case, the rent would be deducted from any money due to Mr F from the sale of his stock at auction.
162. We have been unable to establish when the grazing agreement for 2005, mentioned in the agent's letter of April 2005, was made. Mr F is unable to recall whether or not he had received his copy of the licence when he completed his claim. He has said that he believes he paid the rent in June 2005. Mr F and the landlord's agent have each been unable to give us a copy of the 2005 agreement. However, the agent did have a copy of the 2006 agreement. The 2006 agreement specifies that Mr F should not claim SPS for the land it covered.
163. On 9 May 2005 the late landlord's agent submitted a 2005 SPS claim. The agent said the landlord had died on 19 December 2004, that they had sent RPA details of the executor of the estate, and that they would send the grant of probate in due course.
164. On 12 May 2005 RPA received Mr F's claim form by hand. He has told us that his father handed in both the family's SPS claims. (Mr F's complaint is about only his holding. The claim for his parents' holding was successful.) RPA have told us that the letter they received with Mr F's SPS claim, dated 10 May 2005, was about the poison and his reference period. It said:

     'Further to our meeting on the 1-04-05 at Chalfont Drive Nottingham, with having the disaster of the poison being put down on our holding it would be in your best criteria to start my base year in 1997. This was when the first lot of poison was put down. It was the 8-02-97, see the papers provided and then three more lots were also put down between 1999-2000.

     'It wasn't until spring 2001 that the real disaster took place where we lost a lot of cattle. It is now 2005 and we still haven't got the chemical cleared up. I have now picked it up myself from the cattle. See the paperwork.

     'I hope DEFRA could pull their fingers out a bit more so we can get thing under control. I do not know how to do the single farm payment scheme because it is difficult to run a business with so much worry. To top all of this off I have been under a TB2 restriction [a movement restriction on stock] for the past 26 months.'

165. RPA have said they received a covering letter with the same text, but a different reference, for Mr F's parents' claim.
166. Mr F has said the family gave RPA a further letter dated 10 May 2005. We have seen, from Mr F's papers, a letter dated 10 May 2005 and with reference 22/295/0147. It said:

     'Further to our meeting on the 1-05-05 at Chalfont Drive Nottingham. I put fields on my IACS from [six field references]. I want all these fields deleting if [the late landlord's estate] decide to claim so it will not jeopardize with any of my claim. I also enclose a copy of my health report as explained in previous letters.'

     Mr F added a postscript: 'The reason this needs to take place is because [the landlord] has died'. I refer to this as the letter about the grazing land. RPA have told us they have no record of receiving this letter. The letter omitted one further field covered by the grazing agreement.

167. At our request, RPA have checked their electronic and hard copy files for Mr F and for Mr F's parents' SPS claims and for the requests to amend the reference period – in case the letter about the grazing land was misfiled. They have told us that the missing letter was not in any of the files. In commenting on a draft of this report, Mr F has said that this missing letter was raised at his Stage 2 appeal but not followed up by RPA.
168. The effect of Mr F's mistake at this point was not only that his SPS claim overdeclared the land that was 'at his disposal'. RPA have told us he also claimed 0.7ha of non‑agricultural land. Under SPS Regulations, both mistakes meant RPA would impose financial penalties, set by the scale of the overdeclaration.

RPA's handling of the claim from May 2005 to December 2006

169. On 12 May 2005 Mr F's SPS claim form passed RPA's initial checks. Among other things, the checklist said: 'Refer to desk instructions if a clear request for assistance has been made or request for contact to be made by the farmer'. The RPA officer noted that there was a letter with the claim form. RPA have told us that there is no evidence that any further action was taken in response to this letter. On 24 May 2005 RPA wrote to Mr F about his claim, asking him to initial his amendments. On 10 June 2005 they received the initialled and dated pages of Mr F's 2005 claim. They also received a letter from him dated 3 June 2005 saying that his landlord had died. On 23 June 2005 RPA wrote to Mr F about his claim to amend his reference period. They agreed to use the period 1997‑99 instead of 2000‑02.
170. On 10 November 2005, RPA wrote to Mr F to ask why he was claiming the same fields as someone else. The fields they queried were: [six field references]. Mr F had listed all of these fields in his letter of 10 May 2005 about the grazing land, except for one.
171. RPA must have written in similar terms to the landlord's agent, because on 11 November 2005 the agent wrote to them. The agent said Mr F had a short-term licence to graze/mow the land but did not occupy it for 10 months. They said Mr F had told them, that day, that he would write to RPA. His letter, received on 20 December 2005 by RPA, said that he had had the land on a 10‑month tenancy for summer grazing over the previous seven years.
172. On 5 January 2006 RPA wrote to Mr F asking about a further dual claim on field […]. Mr F had included this field in his letter of 10 May 2005. Mr F replied by telephone and RPA asked him to put his reply in writing. We have not seen a letter in reply. They wrote to him again in January and March 2006. He replied to their letters in early April 2006. He explained that he had made a mistake and the land was being claimed by his landlord. He said he had declared this on the IACS 22 form in May 2005, 'with the letter about [the landlord] dying so it didn't jeopardize with any of my claim'. RPA have told us they have no record of receiving an IACS 22 form in 2005 from Mr F.
173. On 7 August 2006 RPA received a telephone call from Mr F asking about his payment. They told him it was awaiting validation and did not mention that penalties had reduced it to nothing. They said the same thing when he telephoned them on 1 September 2006 and on 25 September 2006. Mr F has told us that, in one of the telephone conversations in late 2006, RPA told him not to worry about his dual claim.
174. Mr F telephoned RPA again on 27 November 2006. They told him his payment was authorised but they could not say when he would receive it. He telephoned again on 28 December 2006 and this time they explained the situation. They asked Mr F to appeal.

Mr F's Stage 1 appeal - from January 2006 to August 2007

175. Mr F wrote to RPA on 28 December 2006 and RPA received his Stage 1 appeal form on 15 January 2007. He said his grounds for appeal were that he had declared what he had done when he submitted his claim. He also provided medical evidence and an undated extract from a grazing agreement. It is unclear whether this is from the agreement for 2005 or an extract from the 2006 agreement, which it matches. Mr F and Mr M have told us that Farm Crisis Network became involved in his case in April 2007.
176. On 22 February 2007 RPA's Exeter office made their recommendation on the appeal. They said: 

     'Mr F states he sent in a letter asking us to remove the fields in question should the landlord claim for the same fields; he has included this letter with his appeal form. No record can be found that the RPA received this letter. Regardless of the letter, the handbook clearly states the following: page 26 paragraph 63. "You should resolve issues concerning whether land is 'at your disposal' before you make a claim. If you do not and it is found that the land was not at your disposal reductions will be made as you will have overdeclared your area". Mr F did not come to an arrangement with his landlord before claiming to ensure that there was not a dual claim. Therefore I recommend that we uphold our original decision and Mr F's penalties should stand.'

177. On 26 February, 5 March, 8 March and three times in April 2007, RPA noted further telephone calls from Mr F. He asked about his 2006 payment. They gave him varying messages. At first they told him that it seemed he was not going to receive a payment for 2006 because of an overclaim. But, in later calls, RPA gave him the information shown on the system, which suggested that the 2006 claim was simply awaiting authorisation. Also in March 2007 RPA decided to treat Mr F as a rural stress case. Among other things, this meant that the rural stress team tracked the progress of his case. RPA's payments system shows that they paid Mr F £10,157.70 on 9 May 2007. They have told us that this was his SPS 2006 payment, made to him in error. They paid him a further £128.55 in August 2007 – the modulation payment.
178. On 19 June 2007 an RPA officer in the customer relations unit referred Mr F's case to the legal team. The officer's memo said:

     'Mr F submitted a claim in 2005 to establish and activate entitlements on a total of nine fields. Checks revealed that he was not eligible to claim on seven of those fields as they were also being claimed upon by his landlord, who had recently passed away.

     'The current decision to remove the seven fields with penalties has resulted in a total loss of payment for 2005 with a penalty of the same amount being deducted over the next three years.

     'Mr F has submitted with his appeal a letter dated 10 May 2005 in which he asks that six fields be removed from his application if his Landlords estate should claim on them. Unfortunately we have been unable to locate a copy of this letter within RPA. It is possible however that a copy may be on the SFP file which has been mislaid. I believe that we should accept this letter and remove the fields under the notified error provisions without penalty.'That said however, the removal of these fields do not help Mr F as one of the dual claim fields […] – 4.65ha was not covered off in his letter of 10 May and given that the eligible fields on his application total just 5.15ha the removal of […] still creates a 90 per cent discrepancy resulting in total loss of payment.

     […]	NA1	0.70
     […]	PP1	4.45	5.15ha

     'However, we do have a letter from Mr F dated 03 June 2005 where he advises that [the man] who he rents the land from which is on his application has died. Although this letter does not specifically ask for fields to be removed it does confirm that Mr F rented land. I believe that this should have alerted RPA to the possibility of a dual claim between landlord and tenant and to check with Mr F whether he or his landlord had the right to claim. If it is that [sic] we can accept this letter as notification we can remove […] without penalty and pay Mr F on the remaining eligible fields.'

179. On 29 June 2007 a member of RPA's legal team gave his advice on Mr F's case. He said that, under the notified error rule, RPA needed to be satisfied that the farmer had informed them in writing of the irregularity if he or she was to avoid dual claim penalties. He said: 'Inform implies a high standard […] and we have applied this to ourselves in the context of an irregularity'. He said he felt Mr F had not '"informed"' RPA but he was willing to be proved wrong if the reason he had sent the letter was directly linked to Mr F's entitlement to claim SPS on the land in question.
180. On 18 July 2007 the customer relations unit officer told the legal team that she believed they had reached the point where they had no alternative except to reject the appeal. On 6 August 2007 the RPA lawyer emailed her. He said:

     'We discussed this case in person today. The farmer has had the maximum overdeclaration penalty applied. I agree this is the only decision we can make under the regulations, and feel it is correct as it was clearly in the Farm Business Tenancy with his landlord (in respect of the dual claimed parcels) that he should not claim SPS on them.'

     RPA's papers do not include any consideration of whether or not they should have taken account of Mr F's health problems in handling his claim. On 7 August 2007 RPA wrote to Mr F with the Stage 1 appeal decision. They enclosed a case summary, which gave their decision and the reasons for it. They had decided to uphold the decision to apply penalties to his claim. In theory, that meant no payment for 2005 and a forward penalty for later claims.

181. On 19 September 2007 RPA received Mr F's Stage 2 appeal. He said that in his letter of 10 May 2005 it had been his intention to make it clear that the fields should not be included (he acknowledged in a separate document that he had omitted one field) and that he felt he was entitled to payment from his livestock for the reference years 1997, 1998 and 1999. He said the purpose of his appeal was to receive that money.

Mr F's Stage 2 appeal ends

182. On 11 February 2008 an appeal panel heard Mr F's Stage 2 appeal against the application of penalties on his 2005 claim. Mr F and his representatives attended the hearing in Nottingham. Mr F said he had he had not approached the land agent because he owed the agent some money.
183. On 26 February 2008 the customer relations unit sent the Minister their submission about Mr F's case. It said:

     'The circumstances would not have constituted force majeure or exceptional circumstances as it could not have been unforeseeable that Mr F might experience difficulty in completing the form given his illness was longstanding, and he had not taken any steps to mitigate the effects of his illness by seeking advice when completing the form or getting someone to complete it on his behalf.'

     Later on the same day the Minister's office replied saying that he had agreed to the panel's recommendation to reject the appeal. The next day RPA sent Mr F the decision. RPA's payment system shows that they paid him £7,629.08 on 5 March 2008 (and a modulation payment of £161.41 on 9 September 2008). They have told us that this was Mr F's SPS 2007 payment, made without penalty by mistake.

184. From June 2008 to October 2009 RPA received further representations about Mr F's case. On 8 July 2009 the Member referred Mr F's case to the Ombudsman. RPA's work on the appeal did not identify the error in claiming the non-agricultural land. The dual claim obscured the earlier penalty imposed by the RITA computer system.

Mr F's description of the effect on him of the penalty

185. We asked Mr F about the impact on him of dealings with RPA about his 2005 SPS claim. He told us that the money he lost, which he put at £15,000 to £18,000, was worth about half the farm's income. He said that not getting the SPS money was like 'having your legs pulled from under you'. Mr F said that he had had to remortgage after what he calls the disaster of the poisoning incident. He fell behind with payments, and in 2006 received a possession order. After that he started his relationship with Farm Crisis Network in 2007, but it had been hard for him to ask for help. He said that the problems he had with RPA were a 'contributing factor' to getting behind with the mortgage payments, which led to the possession order. They had also had an effect on his health.

Some comments by Mr F on a draft of this report

186. We shared a draft of this report with Mr F and his representative. He told us, through his representative, that it portrayed a genuine account of what had happened. He also said that he felt a lack of information from RPA meant that he remained uncertain about how his SPS payment (particularly the historic element) was made up; what penalty RPA had intended to collect from him; and over how many years that penalty was meant to run.

Mr G

About Mr G

187. In 2005 Mr G ran a small arable farm of about 14 hectares (35 acres) in the East of England. He took over the farm from his father and he has said that, because his farm is small enough for him to have time to earn a living from other things, he is a part‑time farmer. His 2005 SPS claim would have been worth about £2,292¹⁰³ if he had activated his entitlements as he intended. Mr G is still farming.

The 2005 claim

188. In 2005 Mr G wanted to register a meadow on the Rural Land Register, in preparation for his 2005 SPS claim. Under the SPS rules, the meadow was newly eligible for subsidy as permanent grassland.
189. RPA wrote to Mr G on 16 February 2005 to acknowledge his IACS 22 claim to register land on the Rural Land Register. They said it might not be possible to process his claim in time for the field details to be reflected in his pre‑populated 2005 SPS claim form. They said if this was the case, the SPS guidance would explain how Mr G should amend his SPS claim form. Mr G has said that the problems he had in registering the land meant he felt short of time to complete the claim. He felt that it had been impossible to get information from the helpline, which he called 'useless'. He said the SPS Handbook and other information had arrived at his busiest time of year and he had not had time to absorb all the information it contained. He has told us that he does not recall receiving the supplementary guidance, which included a list of common errors on forms.
190. RPA received Mr G's completed 2005 SPS claim on 7 May 2005, with sketch maps showing his fields. On the form he had put a cross in the 'no' box at part C (question 3) to say that he did not wish to activate his entitlements. He also did not complete column J of the field data sheet. Mr G has said that this was because he believed from paragraph 320 of the 2005 SPS Handbook that he could not activate the fields before the land areas were settled and the entitlements established. He thought RPA would contact him to activate his entitlements when they had completed his registration and established his entitlement.

RPA's handling of the claim from May 2005 to March 2006

191. On 9 May 2005 RPA completed the Level 0 validation (see glossary) of Mr G's claim. They returned the form because he had not initialled some corrections. They received his corrected form on 12 May 2005. On 18 July 2005 they completed a further checklist when they keyed in the claim. Mr G had told us that in May 2005 RPA also wrote to him, after he had had returned his claim, to confirm that they had registered his field.
192. On 21 February 2006 RPA wrote to Mr G to say they had found a number of inaccuracies in the digitisation of his land and they had made some changes. Mr G told them that the changes RPA had made were wrong. He provided the correct details for his fields and asked RPA to amend their records. Also on 21 February 2006 RPA sent Mr G a non-validated entitlement statement (see glossary) showing that his 15.91 entitlements had a total value of €3,744.56 (£2,554). The accompanying letter explained that it was not a definitive entitlement statement because there were still some 'validation tasks' outstanding for the claim. It said: 

     'The number and value of entitlements allocated to you, as set out in the accompanying statement, could reduce or increase as a consequence of validation. This will be rectified when your claim has been fully validated and an updated statement will be issued in due course.'

     They said they would not be able to make any payments until the claim had been validated. They said they hoped to complete the majority of validation cases without contacting customers direct and if they did not make contact there would be no need to contact them. They said:

     'Validation of claims such as yours is currently our highest priority, and we would therefore be grateful if you could refrain from telephoning for general updates on your case, as this will divert RPA staff from validation work.'

Mr G's representations to RPA from April 2006 to July 2006

193. Mr G telephoned RPA on 28 April 2006. RPA's note of the call said they told him they were working as quickly as possible to validate all claims. They received Mr G's completed 2006 SPS claim form on 9 May 2006. On 7 June 2006 Mr G telephoned RPA about his 2005 SPS claim. RPA's note said: 'I advised him that all tasks were closed but it has not been passed on for payment as yet and that the payment window is open until end of June'.
194. RPA wrote to Mr G on 26 June 2006. They told him that they had been unable to 'resolve all the issues associated with your Single Payment Scheme (SPS) claim'. They said that to get some payment to him quickly, they were in the process of sending him a partial payment of 80 per cent of the value of his entitlement of his claim and would pay the final balance once they had completed the validation of his claim. They said the partial payment was based on a recent calculation of his claim. They said if, after validating the claim, the partial payment was more than the full payment Mr G would have to repay the difference. On 27 June 2006 RPA sent Mr G a remittance advice for a £379.57 part‑payment of his 2005 SPS entitlement.
195. Mr G telephoned RPA on 3 July 2006 to say he had received a payment but RPA's letter had told him he would receive 80 per cent of his SPS payment. RPA told Mr G to put his concerns in writing. He telephoned RPA again on 7 July 2006 about the partial payment he had received. RPA told him that validation checks were still being made on his 2005 claim.
196. Mr G wrote to RPA on 10 July 2006 asking RPA to pay his 2005 SPS payment. He said that he had only received £379.57 and he expected to receive £3,371.79. He said Agency staff had told him there were no outstanding tasks with his claim so he could not understand why he had not received his payment.

RPA tell Mr G they cannot pay his claim

197. RPA telephoned Mr G on 20 July 2006 to tell him he had failed to activate his entitlements on the 2005 claim form and the recent payment had been a mistake. RPA's note of the telephone call said that they told Mr G to send them a letter of appeal to say he had made an error when he said he didn't wish to activate his entitlements. A note on RPA's file explained that their scan of Mr G's 2005 claim showed that column J had been left blank, but their computer records showed they had amended the 2005 claim to activate a total area of 2.78ha. They had no explanation of why some fields had been activated, but noted they had now amended their records to show that no land had been activated.
198. Mr G wrote to RPA on 21 July 2006 with a letter of appeal. He said he had recently been told that he had completed his form incorrectly and RPA had failed to tell him about this for months. He said following RPA's recent advice, he was writing to RPA to confirm that he wanted to activate his 2005 entitlements.
199. On 26 July 2006 RPA sent Mr G a definitive entitlement statement (see glossary) for the 2005 SPS year. This showed 14.3 entitlements worth a total of €3,699.12 (£2,292). RPA's letter said that if Mr G had applied to activate his entitlements in the 2005 SPS year he would receive his payment shortly.
200. On 24 August 2006 Mr G telephoned RPA chasing his SPS payment. RPA told him that his claim was still being progressed and it should not be too much longer before he received payment.
201. On 7 September 2006 Mr G telephoned RPA. He said he had received an entitlement statement dated 26 July 2006, telling him that he had been allocated his entitlement and would shortly receive some payment. He thought that this letter had been in response to his letter of 21 July 2006 asking RPA to activate his entitlements. RPA told him that this would not be the case as they had not yet responded to his letter. They said their records showed that 'validation was still in progress'. RPA made a note for them to respond to his letter and for the processor dealing with Mr G's claim to contact him about the activation of his entitlements.
202. On 14, 22 and 28 September 2006 Mr G telephoned RPA. They told him his claim was showing as 'validation in progress' and his claim was being worked on. But when he pressed them, they looked at his case. They saw no grounds to accept his claim under 'obvious error' and told him that he was not eligible to receive any payments. They told him he could contact their customer services team. He said he had done that in July 2006. On the same day RPA found Mr G's letter of 21 July 2006 on their system. Mr G telephoned RPA on 2 October 2006. A manager in the customer relations unit said that they would escalate his case to the appeal stage as she was confident that his letter of 21 July 2006 would not change their decision about his 2005 entitlements. She said they would send him an appeal pack. Mr G complained that RPA had led him to believe for a number of months that he would receive payment and the manager apologised for the inaccurate information.
203. On 13 October 2006 Mr G telephoned RPA. RPA's note of the telephone call said he told them he had received the appeal form, but his neighbour had received payment without appealing. RPA told Mr G to complete the appeal form.
204. The Bedfordshire & Cambridgeshire (Beds & Cambs) Rural Support Group wrote to RPA on 13 November 2006 on behalf of Mr G. They said that, although Mr G had made the mistake by not applying to activate his entitlements, RPA's failure to deal with his field registration had contributed to his mistake.

Mr G's appeal about his claim – Stage 1

205. On 17 November 2006 RPA received Mr G's Stage 1 appeal form. These were the grounds for his appeal. 
     • He had always intended to apply for payment in 2005.
     • He had been experiencing some delay with RPA in registering his field and had to proceed with his SPS claim form on the basis that the field changes were unresolved. (The IACS form had been passed to the Reading office, changes registered and then passed back to the Northallerton office). He said that, after reading paragraph 320 of the 2005 SPS Handbook [Annex B, paragraph B2], 'I was quite sure that I was not allowed to activate my entitlements before the land areas had been established, and would be penalised if I attempted to do so. I interpreted these instructions as meaning that all land areas had to be settled and agreed before entitlements were granted and then activation would follow. (By telephone or through a follow up form).'
     • He now accepted his interpretation of RPA's 2005 Handbook was wrong, he had no one to check the form for him and in the past he had delivered his IACS forms to the Cambridge office in person. Staff had checked the forms for him, but this service was not available for the 2005 SPS.
     • After he had submitted the claim form, he received confirmation of the registration of the field and then presumed the establishment of his entitlements would be processed.
     • In February 2006 he received a provisional entitlement statement and also received a letter that showed inaccuracies in his land area because of the incorrect recording of field numbers; he pointed this out to RPA at the time and thought these inaccuracies were the reason for non‑payment of the 2005 SPS.
     • He telephoned RPA on various occasions, who told him that everything seemed to be all right with his claim and there were just a few outstanding tasks.
     • In June 2006 he received a letter promising 80 per cent part payment, but he received only a small payment and queried this; he was eventually told in July 2006 he had not activated his entitlements and immediately asked RPA to amend this. But it was not until September that RPA properly explained what had happened to his claim.
206. Mr G telephoned RPA on 27 November 2006 about his appeal. RPA told him that it had gone to the customer relations unit, who would contact him in due course. He also enquired about his 2006 claim. RPA said they would contact him direct if there were any problems with his 2006 claim.
207. Mr G telephoned RPA again on 8 February 2007. RPA told him that the appeal had been passed to their legal team. He then asked about his 2006 payment. RPA told him that payments would commence shortly but could not give any idea when they would be paid. On 27 February 2007 an RPA lawyer gave his comments on the draft decision about Mr G's stage 1 appeal. He said he agreed that there was no legal basis for amending the claim. He also commented on Mr G's allegations of maladministration. He said he did not believe maladministration had occurred. His reasons for that were, in summary, that the allegations about the land registration process had been made many times before, but the 2005 SPS Handbook was clear about what to do if registration had not been completed; and the allegation about being repeatedly told by the customer service centre to await payment was also common, but he doubted that the customer service centre went beyond saying that payment would be based on the content of the claim form and, in any case, Mr G did not lose anything as a result.
208. RPA wrote to Mr G on 7 March 2007. They said the Stage 1 appeal had upheld RPA's decision not to allow Mr G to amend his 2005 claim form to activate his entitlements. RPA attached a case summary setting out the Stage 1 decision. It said:
     • it was unfortunate Mr G misinterpreted RPA's guidance that in 2005 establishment and activation of entitlements would be undertaken at the same time on the claim form;
     • RPA had issued clear and detailed guidance on how to complete the 2005 claim form and it was for Mr G to ensure he had completed the form correctly before submitting it;
     • there was nothing on Mr G's claim form to indicate that he wanted to activate his entitlements and it is possible for a farmer to claim the SPS without activating his entitlements for the 2005 SPS year; RPA had no basis to use the 'obvious error' provisions; and
     • after receiving partial payment in 2006 Mr G contacted RPA who subsequently told him that he had not activated his entitlements; he wrote to RPA in July 2006 to say that he did want to activate his entitlements; as this request was received after 31 May 2005 he was too late to amend his claim.
209. The Stage 1 appeal decision also said: 

     'Careful consideration has been given as to whether there has been an 'obvious error' (as defined in EC Working Document AGR 49533/2002) in this case, in accordance with Commission Regulation (EC) 796/2004, Article 19.'

     It concluded there was no legal basis for RPA to use the 'obvious error' provisions.

210. Mr G has said that the Stage 1 appeal decision failed to note the details of paragraph 320 of Agency's 2005 guidance; or to consider whether it was unfair of the Agency not make a payment given that they had provided him with a partial payment and assured him he would receive payment; or to refer to their letter of 26 June 2006 which had said he would receive part payment of his claim to the value of 80 per cent. In commenting on the draft report, Defra and RPA said: 'RPA does refer to the content of paragraph 320 of the Handbook (although it does not quote it directly) in the appeal decision. It is listed in [the section] "Part D-Scheme Literature"'.

Mr G's appeal about his claim – Stage 2

211. On 2 May 2007 RPA received Mr G's stage 2 appeal. He said:
     • he made a mistake in failing to activate his entitlements because of delays and errors by RPA in his land registration;
     • RPA's letter of 26 June 2006 told him he was going to receive a partial payment of 80 per cent and he also received several telephone calls from RPA in August and September 2006 which created a 'legitimate' expectation that he would receive his payment; he said that under public law RPA was not entitled to breach this expectation; and
     • RPA had not referred to the misleading wording in their guidance (paragraph 320 of the 2005 SPS Handbook).
212. The stage 2 appeal hearing, which Mr G and Mr L attended, took place on 28 June 2007. A barrister attended the hearing with them, as an observer. The appeal panel noted that Mr G had changed his appeal to the grounds of 'obvious error'. Although Mr G had marked box C (question 3) to say he did not want to activate his entitlements, the appeal panel accepted that he marked the box without understanding the implications as his intention was to activate entitlements. They found that there was no other information accompanying the claim from to show that box C (question 3) had been marked incorrectly. They recommended that Mr G's appeal was disallowed. However, they said they were 'dismayed' to learn that RPA had sent Mr G a letter on 26 June 2006 to say he would receive 80 per cent of his payment for 2005; incorrectly made him a part payment; and that staff were unaware of the true position of his case for a long time. The appeal panel considered that RPA's actions: 'have seriously misled the applicant and caused him considerable distress'.
213. Mr G has made three points about the appeal hearing. He has said that the appeal panel secretary, who is part of the customer relations unit, participated in the matters discussed during the appeal hearing; the panel seemed unfamiliar with some aspects of the SPS – one of them thought the Agency had operated drop‑in clinics to assess claims in 2005, when this facility was not available; he felt the panel were entirely led by the SPS expert (an Agency employee); and it seemed the panel had no power to recommend a payment for remedy for the maladministration they had identified.
214. On 12 July 2007 RPA wrote to Mr G to tell him that the Minister had considered the appeal panel's findings and agreed with their recommendation to reject the appeal. They said that the Minister's decision could be challenged by way of judicial review, but if Mr G considered RPA had acted with maladministration he could ask his MP to pass his complaint to me. It is not clear, from the papers we have seen, whether or not RPA have recovered the £379.57 they paid Mr G by mistake.

Mr G's description of the effect on him of losing the 2005 payment

215. Mr G has said that because of the marginal return on his small farm holding, he has a part-time engineering business to supplement his income. He said when his 2005 payment was denied he had to stop investment in machinery, rethink his cropping plans and defer his bill payments to make ends meet. In June 2005 he replaced his van – paying for it upfront. He has said that he generally will only buy something if he has the money to pay for it, but this time he stretched his budget slightly. He had had no doubt that he would receive his SPS payment.
216. He has also described how his family have cut back on household spending. He told us that he believes it took 15 to 18 months for the knock‑on effects of losing the 2005 payment to work through. At one point he had just £300 in his business current account, when he would usually expect to have at least four figures. He ended up on pills for hypertension (high blood pressure), which cost him about £120 a year until he reached 60 in April 2011. He now receives free prescriptions. He also started an agent to do his SPS claim because he lost confidence in his ability to do that after 2005. Using the agent has cost £270-280 plus VAT each year since 2006. Mr G puts the cost of his and Mr L's time at £500 for the day required to attend the Stage 2 appeal. On the same basis, he puts the cost of preparing for the hearing at £100.

Some comments from Mr G on a draft of this report

217. We shared a draft of this report with Mr G and his representative. Through his representative, he told us that the report gave a clear summary of his case and the circumstances around it. He emphasised the tangible financial effect on him of the stress he suffered because of his experience with SPS 2005 (paragraph 216).

Mr H

About Mr H

218. In 2005 Mr H was (and still is) an arable farmer, running a tenanted farm of about 93 hectares (230 acres) in the East Midlands of England. His SPS claim would have been worth about £20,245¹⁰⁴ in 2005 if he had activated all of his entitlements as he had intended (see glossary for entitlements and activation). In 2005 Mr H sought guidance from an adviser about how to complete the SPS forms correctly, because he shared ownership of some land. But he completed his own claim form.

The 2005 claim

219. On 3 May 2005 RPA received Mr H's SPS claim in Nottingham. Mr H had answered yes to question 3 in part C of the form, confirming that he wanted to activate entitlements.
220. The first completed field data sheet had some deleted fields and details of four fields covered by a tenancy agreement. Mr H did not apply to establish or activate entitlements for any fields on this sheet. The fields on the second sheet were all deleted. On the third sheet, Mr H applied to establish entitlements for all 12 fields, but did not apply to activate any of them. These fields covered about 70ha of his holding. On the fourth sheet, he applied to establish and activate the land in all three entries. On the summary page of the field data sheet (which was for farmers' own use and not part of the claim) he wrote that he was applying to establish entitlements for 93.33ha and to activate entitlements for 7.50ha. The figure of 7.50ha was the amount of his set‑aside. He had activated 17.70ha.
221. Mr H has told us that, following the meeting with the adviser about completing the claim form correctly, he had completed his claim form. He made a mistake when he forgot to complete column J on one page of it. Mr H said he was unaware of his error until RPA told him about it in 2006.

RPA's handling of the claim from May 2005 to February 2006

222. On 3 May 2005 Mr H's claim passed RPA's Level 0 validation check (see glossary on validation). On 29 June 2005 the claim went through a further checklist when RPA keyed it in to their system. The claim then went through the system‑based Level 1 and Level 2 validation checks. On 15 August 2005 RPA noted a land area error in Mr H's claim. They wrote to Mr H about his claim the same day, quoting task number 185526 and asking him to confirm the part field areas for a land parcel. On 18 August 2005 Mr H confirmed that he accepted the changes as correct.
223. On 16 February 2006 RPA sent Mr H his definitive entitlement statement (see glossary for definitive). The covering letter said all validation checks had been completed and he should receive his payment within the next few weeks. It said that payment would be based on the entitlement information shown in the statement 'if you applied to activate entitlements under the Single Payment Scheme in 2005'. The statement showed 93.33 entitlements valued at €29,686.39 (£20,245). Mr H has said (in his correspondence with RPA) that he recalls telephoning RPA after receiving his statement.

Mr H seeks an explanation from RPA – March 2006 to August 2006

224. On 27 March 2006 RPA sent Mr H his payment statement showing £2,411.71 and the next day they sent him a remittance advice for the same amount. RPA's records show that Mr H telephoned them on 28 and 29 March 2006 about his remittance advice, with no record of his earlier call to them about his entitlement statement. On 3 April 2006 Mr H wrote to RPA. He asked for an explanation of the difference between the entitlement statement and the payment. They replied on 10 April 2006, saying that his entitlement statement had not been validated and that he should submit queries about payment only when he had received his definitive entitlement statement. On 18 April 2006 Mr H replied that he had received a definitive statement and that he needed to work out why his payment was only about a seventh of what he was expecting. He asked them to check that all the information on his claim had been transferred, particularly 12 fields mentioned on one sheet, which made up the bulk of his claim.
225. On 10 May 2006 Mr H wrote to RPA again. He said he had taken advice and asked them to consider his error in column J as a clerical error, as set out in the 2005 SPS Handbook's section on 'obvious error'. On 24 August 2006 he wrote to RPA asking them to confirm that they were going to consider his query about his 2005 claim soon. He referred them to his earlier letters of 3 April, 18 April and 10 May 2006.

RPA tell Mr H that they will activate all his entitlements – September 2006

226. On 4 September 2006 RPA noted that they could consider Mr H's case as 'obvious error' and that they had sent the relevant papers to the scheme management unit. On the same day the same officer wrote to Mr H to say that RPA had concluded they needed to adjust their records for his mistake in not activating his entitlements. They said they would regard it as an 'obvious error'. The letter also said:

     'We are in the process of implementing an adjustment mechanism which will enable us to re-calculate your entitlement and make any associated payment. However, I'm sorry to tell you that we will not be in a position to start adjusting entitlements for some time yet. We will contact you again to confirm once we have adjusted your claim.'

227. At the end of September 2006 RPA noted 'ECR071 task raised'. An undated document which appears to be about this action, because it was completed by the same person, said: 'Column J has been completed in e-channel on behalf of the producer as an obvious mistake (he forgot to activate his land parcels on pages 20-21 of his claim form)'.

Mr H's requests for RPA to make payment

228.  
229. In November and December 2006 Mr H contacted RPA about his 2005 payment. He telephoned them three times in January 2007. In February 2007 Mr H and the Member's office contacted RPA about Mr H's case. The Member's office telephoned again in early March 2007. RPA noted their concerns about discussing the case with the Member or his office without evidence that Mr H had authorised the Member to discuss his case with them. Also in early March 2007 RPA telephoned Mr H to tell him they were still waiting for the work on his 2005 payment to be completed. In March to April 2007 RPA completed their checks on the 2005 payment and on 26 June 2007 they submitted it to finance for payment. The payment referral said it was:  

     'A [rural] stress case and going through ECR71 as the national reserve was left of[f] his 2005 claim. We have therefore manually calculated the claim.
          Claim value £20,244.64
          Less 5 per cent modulation £19,232.41
          Payment received £2,411.71
          Total due: £16,820.70

     'If we proceed with this it will not be setting a precedent as it is not going beyond the scope of the partial payments already made.'

RPA decide they cannot activate Mr H's entitlements

229. Also on 26 June 2007, Mr H's whole caseworker (see glossary for whole caseworker) received an email from RPA's rural stress mailbox.He noted, and colleagues confirmed to him, that Mr H should not be paid. In July 2007 the Member's office telephoned RPA for an update. RPA said that work on the case still seemed to be in progress. Later in July 2007 the NFU contacted RPA on behalf of Mr H. The NFU said:

     'The RPA now state that the case is with the legal department and will not say why or what the problem is. Mr H is a tenant farmer and this money is critical to his business and cash flow is tight now and for the coming months.'

     On 24 July 2007 RPA cancelled the manual payment.

230. On 30 July 2007 RPA responded to the NFU. They said:

     'We are sorry that your member's case is taking so long to resolve. There is, as you correctly state, an issue over whether the 2005 claim form was correctly completed and it is being studied by our Legal Department. It appears that, because your member did not activate all his entitlements in 2005, we are not able to make a larger payment. However, we will write to your member within the next week clarifying our final position.'

231. On 2 August 2007 Mr H wrote to his whole caseworker. He said the whole caseworker had telephoned him three weeks earlier and said that he would call again the same week to update him about his 2005 claim, but that call had not happened. Mr H said he was becoming more and more concerned and that nearly 12 months had passed since RPA's letter saying they would accept the problem as clerical error and pay him. He mentioned the lack of direct contact with him and said: 'I have made a big financial commitment to help my business on the basis that I would receive my payment sooner rather than later. Financially I am now in a very precarious position and my health is suffering'. He said the NFU had told him that his case was with the legal department. He asked, if there was a problem, could they please tell him what it was and who was dealing with it. He said he could not believe that a simple clerical error made by him in May 2005 and accepted by them in September 2006 was still not sorted out by August 2007.
232. In September 2007 Mr H telephoned RPA to ask for an update. On 12 September 2007 the whole caseworker noted that Mr H's 2005 claim could not be paid and that he would tell him that when he called again. The next day, 13 September 2007, a colleague asked the whole caseworker whether she should go ahead with her redefinition work on Mr H's case. The whole caseworker replied that he was waiting for a decision as to whether RPA were treating blank datasheets as an 'obvious error' or not.
233. On 17 September 2007 the whole caseworker noted that he had spoken to Mr H several times and he was still waiting for an answer about whether or not RPA could pay him for the rest of his 2006 entitlement (although this was about the 2005 claim). He said he was unable to give Mr H more information until his manager told him he could.

RPA tell Mr H that they will not pay his full claim

234. On 20 September 2007 the whole caseworker wrote to Mr H saying that the RPA could not amend his claim and the reasons for the decision. The reasons were:

     'You indicated in C10 that you wished only to claim on those field and showed evidence that you were fully aware on how to complete the form. Your claim summary, while different from the figure in C10 only indicated a smaller area of land you wished to activate.'

     Column C10 was the name of the activation column in the 2006 claim form.

235. On 12 October 2007 Mr H wrote to the whole caseworker (RPA received the letter on 23 October 2007). He pointed out that the error he had made was obvious as an error, for example, because the fields which were not activated were all on the same page. He also asked why RPA had allowed his claim to proceed and be placed on the system when his claim summary was different from his entries in column J. He said RPA's customer care had been 'absolutely zero'. He also asked how one RPA official's interpretation of the rules could be so different from another's, when both people were following the same rulebook. On 18 October 2007 RPA noted that they had sent out an appeal form.
236. On 6 November 2007 Mr H spoke to RPA – he was unable to speak to his new whole caseworker. He asked whether the officer who had written to him in September 2006 was still on RPA's system. She was not. He explained to RPA that he had budgeted for the extra money that the decision of September 2006 had meant he would receive and he wanted to speak to the people responsible for that decision. RPA decided they could do no more outside the appeal process and they sent Mr H an appeal pack.

Mr H's Stage 1 appeal – November 2007 to May 2008

237. On 26 November 2007 RPA received Mr H's Stage 1 appeal form. In the box asking Mr H to detail the decision against which he was appealing, he wrote: 'A total reversal of a decision made by you in September 2006, on which I budgeted, twelve months later'.
238. In February 2008 RPA's customer relations unit noted that Mr H had telephoned them to chase up his stage 1 appeal. They arranged for the Exeter office to give Mr H an update, which they did on 26 February. On 27 February, Mr H wrote to RPA asking him to put his 2007 claim before the payments committee 'as a desperate case' so that his 2007 payment could be released early. He said he had cash flow problems because of the situation with his 2005 claim and: 'This whole situation is not only having a significant effect on my farming budgeting but also on my health and well-being'. Meanwhile, in early February 2008 RPA noted that the suggestion of an ex gratia payment to Mr H might prejudice the appeal process and sought legal advice. The legal team responded saying that there was no legal reason why a botheration payment should not be considered just because the issue might be appealed. They said that the customer relations unit would be best placed to determine if a botheration payment was appropriate. They said that it would be wise to wait until the penalty decision had either been upheld or overturned by the appeal before making a decision on financial redress. The legal advice noted that, if the decision was upheld, and Mr H provided compelling evidence of actual financial loss due to the broken promise, a further compensatory payment might be necessary.
239. In March and April 2008 first the NFU and then Mr H contacted RPA for an update about his 2005 appeal. RPA's customer relations unit received further legal advice in April 2008. The lawyer's advice said it was clear that RPA had handled Mr H's claim badly by accepting his appeal in September 2006 only to reverse it exactly 12 months later and that farmers might well be able to challenge RPA on the grounds of serious maladministration leading to financial losses for which RPA could be liable. It said that, to date, both legal and the customer relations unit had reviewed the representations from Mr H and, to date, they had not linked financial loss to the broken promise. The lawyer said: 'They have yet to make out the case for serious maladministration or compensation'. The advice was to reject Mr H's Stage 1 appeal on the 'obvious error' point and to 'mention' his right to complain about maladministration.
240. On 9 May 2008 RPA rejected the Stage 1 appeal and told Mr H the decision and reasons for it. They apologised for telling him that he would be paid. They said there was nothing in the claim form to indicate 'obvious error' and therefore that provision could not apply. RPA also said that Mr H could ask his MP to take his case to the Ombudsman.

Mr H's Stage 2 appeal – July to December 2008

241. On 22 July 2008 RPA received Mr H's stage 2 appeal, in which he explained why he believed his case met the criteria for 'obvious error'. In particular, he pointed out that he had completed the land use category for 2005 and asked why he would have done that if he did not intend to activate the fields. He also pointed out that this was a new scheme with new rules and forms.
242. On 11 November 2008 the appeal panel heard Mr H's Stage 2 appeal about his 2005 claim. They upheld RPA's decision not to make payment and said this was because he had failed to activate all the entitlements and the failure did not fall under the 'obvious error' provisions. They also noted that they were concerned by RPA's handling of his case and that they accepted that the letter of 4 September 2006 had had a significant effect on his business decisions.

RPA look into Mr H's complaint about maladministration

243. After the appeal panel hearing, an RPA officer gave colleagues a 'heads‑up' that Mr H's sister-in-law had attended the hearing and had mentioned that she knew RPA's new Minister. The officer said that Mr H's sister-in-law might raise his case with ministers or through another route.
244. On 12 November 2008 the appeals panel secretary telephoned Mr H. He also gave him his email address. The secretary said that he was looking into the issue of why RPA had said they could treat Mr H's case as 'obvious error and had then changed their mind. The secretary said that, if his appeal failed, he could consider showing how he had been disadvantaged by receiving wrong information. If he was not happy with the outcome he could approach the Ombudsman. The panel secretary contacted colleagues to find out what had happened in Mr H's case. He updated Mr H by email.
245. On 11 December 2008 the panel secretary produced a submission to the Minister. The submission gave the panel's recommendation and, under the heading of 'risk', said that RPA considered there was no risk in upholding the panel's recommendation. The submission said that RPA accepted they had 'maladministered' the case and proposed a consolatory payment of £500. On 15 December 2008 Tony Cooper, then RPA's Chief Executive, queried the £500 figure. He said that he believed the normal level of payment was £250. The customer relations unit replied said they had agreed a higher figure because they had not told Mr H for 12 months that they could not accept his case as 'obvious error'. They also said that Mr H's representative at his appeal had argued that Mr H had taken account of the money RPA had told him they would pay him in September 2006 when budgeting for the coming year and that he had taken out loans on the basis of that payment.
246. On 15 December 2008 the Minister's private office confirmed that she had accepted the recommendation. On the same day, Mr H's sister‑in-law emailed the panel secretary with some questions. He replied on 24 December 2008 with the information he had gathered from colleagues. The day before, 23 December 2008, RPA had sent Mr H the Stage 2 appeal decision. Mr H has said that he declined to accept the consolatory payment from RPA.
247. On 3 March 2009 the Member referred Mr H's complaint to me.

Mr H's description of how losing the 2005 payment affected him

248. Mr H told us that he completed his 2006 SPS claim successfully on his own but he has used an agent since then. Mr H told us that he bought a small second‑hand combine harvester for about £15,000 on the basis that he would receive the payment. Mr H has said that he was not in the red at the bank and could afford to pay it, although it affected his budgeting. We have seen an invoice dated 22 August 2007 for the deposit of £3,166.62 and Mr H has told us that he paid the balance in March 2008. Mr H has also told us that he felt isolated when he realised that he might not get the payment. No one would give him an answer and RPA did not return his calls. He said RPA's actions had caused him 'heartache, turmoil and worry'.

Some comments from Mr H on a draft of this report

249. We shared a draft of this report with Mr H. He said:

     'If the RPA had sent the correct decision to me in the letter dated 14 September, 2006, I would have been spared the subsequent extreme stress, anxiety, lack of sleep, financial management and related family problems. If the decision had been to refuse payment, although I may not have been pleased, I would have not have suffered this subsequent personal torment - something I don't feel I deserve and which I do not ever want to experience again. I would certainly have never committed to making the considerable investment in a replacement combine if my application had not been approved by the RPA. I went ahead with the purchase in the mistaken belief that the money was going to be paid to me in due course. I would not have put myself through the ordeal of going to appeal and then to the Ombudsman if the RPA had not made such a major mistake in leading me to believe that I was entitled to the payment at this time.'

250. We also received comments from people who had contact with Mr H during the time that he was waiting for payment from RPA and then making his appeal. An agent who had advised Mr H and knew him through the local discussion group of the Tenant Farmers' Association described her recollection of how Mr H reacted to the written confirmation from RPA that they would treat his mistake as 'obvious error'. She said:

     'When we met at the discussion group, Mr H updated us as to progress and was quite frank as to the impact the 'positive' decision had on his business and his personal wellbeing. I recall him commenting on the impact on cash flow and I specifically recall him commenting that he would be able to re-invest in machinery and make decisions that he did not feel he could make before he knew he would receive the whole of his 2005 payment. When he had received the confirmatory letter, at no time did I or, I believe, Mr H believe the decision would or indeed could be reversed.

     'I was therefore very surprised when Mr H said he had a letter from the RPA reneging on the previous agreement regarding his clerical error. Mr H was understandably confused by this decision as well as shocked and I think it fair to say he appeared almost traumatised by the decision. He told me he would be 'appealing' the decision. From that time on Mr H kept the discussion group updated and it was obvious to me and I believe other members of the group, the impact this was having on Mr H – especially when the group expressed disbelief at how the RPA had handled the situation.

     'I really believe the whole experience has been extremely stressful for Mr H – and I really believe that the most traumatic aspect was the reversal of the RPA's written decision. Mr H was visibly stressed by this decision and I believe he needed considerable support during this period to try to come to terms with the way in which he had been treated by the RPA. The sheer length of time taken by the RPA in the decision process did not help – particularly as this encouraged him to make financial decisions which I do not believe he would have made without having received the RPA's letter. I believe it is particularly upsetting to him that he followed all the RPA's processes and rules but to no avail.

     'Whilst I do not advise Mr H on the management of his business, I believed from the discussions at the time, the original letter form the RPA was a deciding factor in the decision to purchase machinery and he therefore made a financial commitment to spend approximately £15,000 which he has had to fund from other sources where as he genuinely believed would be funded through the 2005 payment.'

251. A representative from Farm Crisis Network also contacted us. He said: 'Mr H has been very frustrated and depressed by the inconsistent and seemingly contradictory messages that have been ongoing from RPA over six years'.

Mr I

About Mr I

252. Mr I owns a farm in the South West of England. He bought a second farm in late 2002 and in 2003 he merged both farms into one holding of about 187 hectares (462 acres). He claimed SPS successfully in 2005, although he was still waiting for his mapping details to be digitised by RPA (see glossary on Rural Land Register). His 2006 SPS claim would have been worth about £29,600¹⁰⁵ if he had claimed it successfully.
253. In January 2009 Mr I told us that in 2006 he had read the SPS guidance in detail before completing his claim forms and telephoned the helpline several times. However, he has also said that RPA sent him many booklets, which implied that he did not have time to read them all. He said sometimes calls were not answered and at other times he found himself holding for long periods. He said that, on the one hand, he had not realised how strict the rules were for SPS claims – RPA kept changing things and only some elements seemed to be strict. But on the other hand, he believed that if he signed the form, he was completely responsible for its contents. From his point of view he could not sign the declaration because the information was wrong. He said the declaration was very clear about what a signature implied and it was the declaration that meant he would not complete the form until he was sure the field data was accurate.

Mr I asks RPA to register his land – February 2005

254. On 2 February 2005 RPA received Mr I's IACS 22 claim to add land to the Rural Land Register. A month later, on 2 March 2005, they sent him maps showing details of the land parcels they already held for him on the Rural Land Register. Their covering letter explained they were still processing some IACS 22 forms. They added that, if he had further changes, he should submit another IACS 22. Mr I's records show that he contacted them on 10 March 2005. The message he took from them was: 'Just wait'. He made a 2005 SPS claim without receiving their response, in line with RPA's 2005 guidance. He also claimed an allocation from the National Reserve. This was because his business was not fully established in the reference years of 2000‑02, which RPA had used as the basis for the historic element of SPS entitlements (see glossary on entitlements).
255. On 19 August 2005 RPA wrote to Mr I with details of the land they had added to the Rural Land Register. A fortnight later, on 2 September, Mr I replied in writing. He asked RPA to correct three errors. They were: a field that belonged to a neighbour (which, Mr I said, he had told RPA over a year earlier); some slightly reduced boundaries; and that the maps used old Ordnance Survey data and therefore omitted the new buildings and farm house.
256. On 4 October 2005 Mr I asked RPA for an update. They asked for more information on his National Reserve claim, which he sent them that month. RPA sent him his allocation in January 2006 and, the same month, Mr I asked them, in writing, how it was calculated and whether it included certain land parcels. We have seen no reply to that letter.

Mr I asks RPA to explain

257. On 20 January 2006 RPA sent Mr I one of their standard letters saying that they would be reducing the area he had claimed in his 2005 SPS claim because it was more than the area recorded on the Rural Land Register. They warned that an overclaim might result in penalties.
258. On 1 February 2006 Mr I told RPA that he had not received any digitised maps. He referred to maps he had received for his Organic Entry Level Stewardship claim,¹⁰⁶ which he said confirmed the areas queried by RPA but had one incorrect field area. He said that this parcel […] needed to be considered with land parcel […]. He said that he did not believe that any penalty should be imposed since, at the time he had made his 2005 claim, he had had no information from RPA. He asked them to confirm his position by return. Mr I's letter, like his later letters, gave his landline and mobile telephone numbers and the name and mobile number of the farm's general manager. On 2 February 2006 RPA wrote to Mr I again. They said they had changed the details on his 2005 claim to match the digitised information on the Rural Land Register and they listed seven fields which had changed. The parcels queried by Mr I were not mentioned. It seems this letter crossed in the post with Mr I's letter of 1 February 2006, which RPA received on 6 February 2006.
259. On 16 March 2006 RPA asked Infoterra, their digitised mapping supplier, to update the field parcels queried by Mr I. RPA have confirmed that no one would have updated Mr I at this stage. Mr I's mobile telephone bill shows that he telephoned RPA's 0845 603 7777 helpline number at 15:36 on 20 March and at 16:35 on 21 March 2006. RPA have no record of the calls, that we have seen, and Mr I's recollection is that he was unable to speak to anyone.
260. 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.

The 2006 SPS claim

261. On 26 April 2006 RPA received a 2006 SPS claim from Mr I. He had not completed the field data sheets or the section summarising the entitlements he wanted to activate¹⁰⁷ but he had signed and dated the form. His covering letter asked RPA why the claim was not pre‑populated and when he would receive completed maps for his farm. He said RPA's guidance notes on cross compliance were uninformative and he asked them to give him some specific guidance on his form. He made an (ironic) comment about RPA facing penalties if they failed to reply by 28 April 2006.
262. Mr I's mobile telephone bill shows that he telephoned RPA's 0845 603 7777 helpline number at 13:56 on 3 May 2006. RPA have no record of this call, that we have seen, and Mr I's recollection is that he was unable to speak to anyone. On the same day he wrote to RPA with a second claim form, unsigned but with completed field data sheets, except for the activation column. RPA had pre‑populated the field data sheets on this form. Mr I said the form seemed to be incomplete, with many inconsistencies compared with 2005; that numbers had changed on some fields; and that some rented fields had been muddled up. Parts of his letter were unclear, but he obviously needed a response. For example, he mentioned two fields which he rented from a neighbour. It seemed that the neighbour had also claimed for the fields. (RPA have told us that there was a dual claim: both farms had applied to establish entitlements for the fields. Had RPA followed their own guidance, they would have applied penalties to the neighbour's 2005 SPS claim. Instead, they removed the dual‑claimed field without applying penalties. RPA have told us that this was incorrect.)
263. On 4 May 2006 RPA wrote to Mr I, using a standard letter called an SPV1. This is a standard letter intended to tell claimants about omissions in the claim information they have provided. RPA had placed an X next to two items in the letter's list of possible omissions: no entries at columns E2 and/or E3 (the claim for SPS); and no completed lines of field data at part C and/or part D (in the field data sheet).
264. The letter asked Mr I to respond by 15 May 2006 and warned that failure to comply with the deadline would result in late claim reductions of 1 per cent per working day being applied to his claim and that they would refuse corrected forms received after 9 June 2006. It also said that the content of his claim form remained his responsibility at all times and acceptance by them for lodging and/or processing should not be taken as an indication that the content was sufficiently complete and correct for payment.

RPA postpone the 2006 claims deadline to 9 June, and then to 10 July

265. On 5 May 2006 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 the final deadline for claims, albeit with a late claim penalty, would be 9 June 2006. Later, on 22 June 2006, RPA put back the date that penalties would apply to 2006 SPS claims from 31 May to 15 June and said they would reject claims received after 10 July 2006.
266. On 8 May 2006 Mr I wrote to RPA's Northallerton office, enclosing a copy of his letter dated 26 April 2005. He asked for a reply to it and the return of his documents. On 17 May 2006 he wrote again to RPA. He complained about RPA's failure to answer his letters. He said: 'Please get it together and 1) Acknowledge which fields I use, 2) Reply re SPS 06 and send corrected forms, 3) Send me a complete set of maps of all my fields on my farm (I've never had this)'. He copied the letter to the then Secretary of State (whose office referred it to RPA). RPA's guidance directs staff to try three times to telephone a person before writing a letter. We have seen no evidence that RPA attempted to telephone Mr I. In commenting on the draft report, RPA have said: 'The letter dated 26 April 2005 refers to his 2005 application and the answers to his questions are not critical to his ability to complete the 2006 form'. They also said: 

     'Mr I certainly contributed to the situation by his refusal to submit the 2006 form until all hisquestionshad been answered. He had much of the information needed from his 2005 form and other correspondence and could have submitted a nearly fully completed form, with an accompanying letter to explain his situation, within time, had he been so minded.'

267. On 23 May 2006, it seems in response to the second claim form, RPA sent Mr I another SPV1. On 2 June 2006 Mr I wrote to RPA again. He said that, without replies to his letters of 25 April 2006 and 3 May 2006, he could not complete his 2006 SPS claim. He also made a comment about applying penalties to the department.
268. On 12 July 2006 Mr I wrote again to the then Secretary of State. Among other things he asked again for a complete set of accurate maps. On 21 and 26 July 2006 RPA noted their action on two 'document response' tasks, which we believe were for the letters of 25 April and 3 May 2006. On 21 July RPA told Mr I, by letter, that they would return the documents that his letter of 8 May 2006 had mentioned. They apologised for their delay.

Mr I's maps arrive, he sends RPA a completed form, and they agree to pay his claim – August 2006

269. On 1 August 2006 Mr I received a set of maps from RPA. RPA have told us that this will almost certainly have resulted from his letter of complaint to the Secretary of State in which he asked for a set of maps. On 8 August 2006 RPA noted that there was ministerial correspondence about Mr I's case and that staff should check the mapping data when dealing with his claim. On 9 August 2006 Mr I telephoned RPA. He explained the background to his case. RPA told him that they had not pre‑populated his 2006 claim form because his 2005 SPS claim had not been fully validated. They also said that it was unlikely that he would have received no reply from the helpline during working hours. RPA suggested that Mr I should send a claim form with an explanatory covering letter, although they might not accept the claim so far after the deadline. Also on 9 August 2006 RPA noted that they should look into the letters from Mr I which they had passed over because they were over 60 days old.
270. On 11 August 2006 RPA replied to Mr I's letters of 25 April 2006 and 3 May 2006 and his telephone calls of 9 August 2006. They apologised for their delay in doing so. They gave him this information:
     • his first 2006 SPS claim had been received on 26 April 2006 and his second on 10 May 2006;
     • part C of the form was not completed as the form was still being validated; they had made the decision to send out blank forms to customers whose claims were still being processed at that stage of processing so they could be returned before the 15 May 2006 deadline. They said that customers were given the option of waiting for the pre‑populated form but that might not have been received until just before (or after) the deadline and would have resulted in a late claim being received and therefore penalties would have applied;
     • part E of the form was not complete as the form was still being validated. They said they had advised customers to fill out part E and, if they wished to activate all their entitlements, to mark the 'All' box with a cross and to send a covering letter explaining that they had filled out their form to the best of their knowledge; and
     • there was a helpline that was available to help with queries.

     RPA also said that they were looking into Mr I's queries from his letter of 3 May 2006 about the missing fields and the fields that he was renting from his neighbour. On 14 August 2006 they told him that some of the field numbers had changed, because the Rural Land Register and the Ordnance Survey were constantly being updated. The letter summarised the changes made in his 2006 claim, which Mr I's letter had queried. It also said they would correct the data for the fields he rented from his neighbour.

271. By this stage Mr I had sent RPA a third 2006 claim form, which they received on 15 August 2006. In that claim, Mr I had hand‑written the field numbers and sizes, activated his entitlements and signed the form. His covering letter set out the background and complained about RPA's handling.

RPA's handling of Mr I's late claim

272. On 30 August 2006 RPA noted that they would accept Mr I's late claim. A RITA delivery expert (see glossary on RITA) had said that no penalties would apply because Mr I had supplied a signed form, even without field data, before the deadline. On the same day RPA replied to Mr I's letter of 9 August 2006 point by point. They confirmed that they would accept his 2006 SPS claim without penalty because of the two claims he had made before the deadline. On 31 August 2006 RPA's customer relations unit wrote to Mr I, replying to his letters of 25 April, 3 May, 17 May and 12 July 2006. The letter acknowledged that some preprinted forms had been incorrect and apologised. It also said the mapping issues were resolved. The letter made no mention of the most recent action on Mr I's claim. He replied on 6 September 2006, saying that RPA had asked him to resubmit his 2006 claim form, which he had.

RPA change their view on Mr I's claim

273. From 21 September to 30 November 2006 RPA dealt with Mr I's 2006 SPS claim. On 30 November 2006 they told the scheme management unit (see glossary) that a RITA delivery expert had incorrectly said that RPA could accept his late claim and asked for advice. By this stage Mr I had twice written to RPA, on 28 September and 25 October 2006, asking about his claim. In mid‑December 2006 the scheme management unit gave their verdict: the claim could not be accepted. They said nothing about possible mishandling by RPA.
274. On 19 December 2006 RPA wrote to Mr I. They said that they could not accept his claim, because the deadline for that information had been 10 July 2006. They added that no SPS payments would be made for 2006 and any entitlements would be considered unused for that year.
275. Mr I wrote to RPA on 3 January 2007, disputing their decision on his 2006 SPS claim. On 10 February 2007 they told him again, by letter, that they were unable to accept his 2006 claim. But on 19 February 2007 they paid him 50 per cent of it: £14,806.09. On 19 and 20 February 2007 Mr I wrote to RPA again. (On 2 March 2007 RPA sent Mr I copies of digital maps of his land. He told them that the maps looked correct.)
276. On 14 March 2007 RPA's customer relations unit wrote to Mr I. They said they had reviewed Mr I's case but could only repeat that they were unable to accept his claim and that the entitlement statement they had sent him had been automatically generated 'as your claim had not gone through the entire rejection process'and they had sent it to him in error. (RPA seem to have been unaware that they had also made Mr I a partial payment.) RPA apologised for the confusion that this had caused. They also told him that failing to activate his entitlements in 2006 meant that Mr I would lose the National Reserve top‑up to all his entitlements, which would revert to normal entitlements in 2007. On 21 March 2007 RPA told Mr I that they had reviewed the facts of his case but had to uphold their original decision to reject his 2006 SPS claim.

Mr I's Stage 1 appeal

277. On 10 April 2007 Mr I sent RPA a detailed explanation of why he disagreed with their decision and on 13 April 2007 they received his Stage 1 appeal form. He described his difficulties in obtaining answers from RPA (although he called them Defra); their changed decision on accepting his claim; and their 50 per cent partial payment.
278. We have seen exchanges between RPA staff, including an RPA lawyer, from August to November 2007 about Mr I's case. The debate was about the scope to pay his claim under the 'obvious error' provisions and whether their own error in saying they would accept his claim meant he had expectation of payment. The RPA lawyer, on 9 October 2007, said he foresaw that the appeal panel could confuse eligibility for SPS with maladministration. He suggested thinking about clarifying what 'we' expected the panel to look at.
279. At the end of October 2007 the RPA officer looking after the appeal requested further consideration of Mr I's case before she made the final decision. Her colleagues (one of whom had also considered the case in 2006) took the view that RPA had given Mr I opportunities to give them the information they needed. On 15 November 2007 RPA sent Mr I their Stage 1 appeal decision, which upheld their decision not to accept his 2006 claim as a valid claim.

Mr I's Stage 2 appeal

280. On 7 January 2008 Mr I appealed against RPA's stage 1 decision. He said that RPA's appeal case summary omitted the many telephone calls in which he said officials had apologised for the organisation's poor performance and that his 2006 claim would be paid in full. He also explained the problems he had had in obtaining a final set of accurate maps.
281. On 31 March 2008 RPA's appeal panel rejected Mr I's appeal. They said RPA's guidance was clear. To be able to lodge a claim, the area of land on which entitlements are to be activated must be filled in; the declaration must be signed and the form must be lodged with RPA within the required deadline. The appeals panel secretary submitted the panel's recommendation to the Minister on 15 April. On 21 April the Minister accepted the recommendation and on 22 April 2008 RPA sent Mr I the Minister's decision.
282. On 21 July 2008 the Member referred the complaint to me.

Mr I's description of the effect on him of losing the 2006 payment

283. Mr I has said that he was still uncertain what RPA have paid him and whether or not they have recovered the £14,800 they paid him by mistake for 2006. He puts the effect of his dealings with RPA as the loss of his 2006 subsidy, the reduced value of future entitlements and the trouble of dealing with RPA. He has said that dealing with RPA made him feel as though he was a criminal. Mr I has said he was fortunate enough to have other means, which meant he could pay his staff on time.
284. RPA made some comments when we interviewed them about what happened in Mr I's case. This is a summary of what they said:
     • RPA have said that dealing with an apparent dual claim from Mr I's landlord had caused some of the delay in Mr I's case during 2005.
     • RPA have said that a written request for up‑to‑date maps would have produced a quick response and that Mr I should not have needed to go as far as writing to the Secretary of State to obtain up‑to‑date maps.
     • RPA established, in response to our enquiries, that a field was missing from the preprinted claim form received by RPA on 10 May 2006 […] and that another field […]) was preprinted but had the wrong hectarage. The preprinting had inserted a figure of 2.13ha, which was the area of the missing field […].
     • RPA's view was that the information in RPA's letter to Mr I of 2 February 2006 would have been of use in filling in the 2006 claim form and that Mr I's understanding of RPA's systems was good enough for him to have been able to analyse the information they gave him.

Some comments from Mr I on a draft of this report

285. We shared a draft of this report with Mr I. In his comments on the draft, he said that he agreed with most of our reporting of the facts and was willing to accept our account on the small points where his recollection differed from what we had said. He asked for written clarification from RPA of how his SPS claim stood in terms of the National Reserve (paragraph E276).