Validation

Level 0 validation

RPA have told us that in 2005 the initial checks (Level 0 validation) were a manual check in which they made sure they had the minimum amount of data to enable a claim to be lodged under the EU Regulations. This meant checking that the name, address and the minimum amount of claim data were completed. When RPA did these checks, they had sight of the whole form. They have refined the checks over the years.

In 2005 RPA could not scan the claim forms ‘intelligently’, which means scanning the data into the computer processing system. They had to do ‘high volume data capture’ (HVDC), which meant keying in the information in the claim forms. They have said there were HVDC quality checks that checked the keying.

In 2006 the SPS claim form had two key parts concerned with activation data: ‘part C’ and ‘part E’. We asked Defra and RPA about how they handled claims where part E was blank. They told us that their guidance for staff was to send an ‘SPV1’ letter asking for the missing information. They said that, in principle, in 2006 problems with the information (or lack of information) in part E did not disadvantage claimants. That was because RPA had decided to base 2006 SPS 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. Defra and RPA also said that they based payments on the entitlements claimants had activated in part C.

Level 1 validation

Level 1 validation was about checking the field size and identifying missing information or the use of invalid land use codes. RITA did the Level 1 validation checks and produced error lists of validation failures on individual claims. Staff would then go through individual claims screen by screen, correcting the errors identified on the lists. RPA told us that they checked that all appropriate boxes in the form were complete. For example, in 2005 there would be a red error message if the activation box had not been completed.

Level 2 validation

Level 2 validation could not start  until most claims had completed Level 1. Level 2 checked the land claimed  against the Rural Land Register; checked whether the land had been digitised;  and checked for dual claims. If the land was to be digitised, the task would go  to the mapping team.

Activation

Activating entitlements means claiming payment for the entitlements  that a Single Payment Scheme claimant has established. The Rural  Payments Agency (RPA) said that there was no validation error if entitlements  were established but not activated. They concentrated on whether land had been  established, rather than activated. However, towards the end of 2005 RPA  realised that non‑activation might be a problem. They did a ‘sweep up’ to check  if it was obvious from the way a form was completed that a claimant had not  activated field parcels in error. For example, a claimant might have ticked the  activate box on the front of the claim form but not completed the activation  column. That meant a claimant would have established entitlements, but not activated  them. In the sweep up, RPA contacted people to ask ‘are you sure this is  what you wanted to do?’. They decided that these cases would get payment.

RPA first picked up the general  issue of non-activation by claimants in the initial checks (Level O validation).  They then decided to look for cases where the first activation box had been  ticked but not column J (as that might indicate ‘obvious error’) and they then  interrogated the system for cases fitting such criteria. They did not look for  cases with nothing in either the initial box or in column J because they did  not consider this to be an ‘obvious error’.

In commenting on the draft report,  the Department for Environment, Food and Rural Affairs (Defra) and RPA told us  that they applied the ‘obvious error’ provisions in the governing EU  Regulations to the maximum possible extent and that this enabled them to  clarify the intent and, if relevant, allow activation, in some cases where the  farmer had made errors on the application form.   However, this could not apply in cases where there was no inconsistency  on the form that would allow the ‘obvious error’ provisions to be invoked.  As a result, some farmers did not receive the  payments they might otherwise have done.

Appeals

RPA will reconsider decisions on  entitlement if a claimant requests it. The first reconsideration will be done  locally. The next step is for the claimant to appeal. A Stage 1 appeal is an  administrative consideration. A Stage 2 appeal is considered by an appeal  panel. The panel is made up of three  members who are drawn from a pool of people appointed by Ministers on behalf of  the Secretary of State in line with the Code of Practice for Ministerial  Appointments to Public Bodies. Stage 2 is also an administrative  consideration but requires payment of a £100 fee (refunded if the appeal is  successful). The panel recommendation forms the basis of a submission made by  Defra officials to the Minister, who makes the final decision. Single Payment  Scheme claimants have no right of appeal to an independent statutory tribunal.  Claimants can challenge the Minister's decision by asking the courts to permit  a judicial review of the decision.

Beds  & Cambs Rural Support Network

A local charity that describes itself as part of a national network of  support groups dedicated to combating stress and hardship in rural areas. It  provides advice, practical help and personal support to people who live in the  countryside.

Common Agricultural Policy (CAP), CAP  reform

The European Union's (EU's) Common Agricultural Policy (CAP) provides  financial support to farmers for a range of farming, environmental and rural  development activities as well as managing EU agricultural markets. After the  Second World War, the CAP succeeded in improving EU's food self-sufficiency but  also led to some problems, such as regular and large food surpluses in certain  farm products. The first CAP regulations for a single market for agricultural  products were in 1962.

The MacSharry reforms, agreed in 1992, switched the bulk of CAP  support from market support measures to annual payments (collectively known as  direct payments) to farmers. Alongside the introduction of direct payments, a  new control system (see IACS) was introduced. In 2003 the EU member states agreed further CAP  reform. The reformed system continues to make direct payments to farmers,  intended to give them income stability. However, the payments are no longer  linked to how much farmers produce and the conditions of payment include rules  on environmental conditions and animal health and welfare standards (see cross  compliance).

Member states expect the next stage of  major CAP reform to take place in 2013.

Commons

Commons are about rights of use rather than land area. This made it  complex for RPA and for claimants to deal with commons in the implementation of  the area‑based Single Payment Scheme subsidy payments. Defra estimate that  about 3 per cent of land in England is common land. That  excludes areas such as the New Forest or Epping Forest.  People can have rights of common on common land. The rights can, for example,  give the right to graze stock, to fish or to remove peat for burning. In the  1960s, legislation attempted to set up definitive registers of common land,  which would record rights of commons. However, these registers are known to  contain errors and omissions. The Commons Act 2006 included measures to  improve the registration system.

Countryside  Stewardship Scheme

Countryside Stewardship started in England in 1991. The Environmental  Stewardship Scheme replaced it and Countryside Stewardship has closed, although  some existing agreements will continue until 2014.

Cross compliance
Farmers are required to comply with a set of Statutory Management  Requirements (SMRs – specific Articles of 19 existing EU Directives and  Regulations) and to keep their land in Good Agricultural and Environmental  Condition (GAEC) as set out in guidance supplied by RPA. This is a condition of  claiming direct payments, including the Single Payment Scheme. The SMRs are about public, animal and  plant health, environmental conditions and animal welfare. GAEC standards  cover, among other things, soil erosion, soil structure, minimum levels of  maintenance and protecting habitats.

Disallowance

A financial correction of money that a member state has to repay to the  European Commission where the member state has not properly implemented the  stated regulatory controls. It can take several years for the European  Commission and a member state to finalise a given year’s disallowance figure.  The December 2009 RPA Disallowance Report said RPA had a  proposed disallowance figure for the Single Payment Scheme of £214.4m, covering  the Single Payment Scheme years 2005 to 2008 inclusive.¹⁰³

The different  bodies auditing RPA are:

• RPA’s  internal audit team;
• The  National Audit Office (NAO) external audit for RPA (for reporting to HM  Treasury);
• The  NAO value for money studies for the Cabinet Office;
• The  NAO acting as the Certifying Body completing a financial clearance audit on  behalf of the European Commission;
• The  European Commission auditors completing a conformity audit (this may lead to  exclusion of expenditure from EU funding);
• European  Court of Auditors (ECA) external  audit for the European Commission.

The European Commission may apply disallowance as a flat rate financial  correction across all claim expenditure in the form of a set percentage  reduction depending on the severity of the control weakness. Where this is a  possibility, it is in RPA’s interest to ring‑fence the cases related to the  particular weakness or failing.

Disallowance Working Group

RPA have told us that a Defra  Disallowance Working Group meets every six to eight weeks, chaired by Defra’s  director of finance. The group has representatives from Defra, RPA and HM  Treasury. Issues of interest to the group are ones that pose a potential  financial correction/disallowance; could impact on policy decisions; pose risks  to RPA’s accredited status and ability to act as the paying agency; or could  result in EU criticism and damage to RPA’s reputation.

Drop‑in centres

Drop-in centres are a facility that  RPA offer farmers around the deadline for submitting SPS claims. Farmers can  hand-deliver their claims.

RPA and their predecessor bodies had  a long‑standing system for accepting hand‑delivered CAP subsidy claim forms  from farmers. In December 2001 the RPA operations director summed up the  practice for the Minister at the time. His memo said:

‘Traditionally farmers have  been used to calling in at their local [RPA] office to deliver claim forms  or seek advice. This practice is far more pronounced where offices are in rural  areas, e.g. Worcester and Exeter than say Bristol or Reading.’

He explained that in the two week  lead‑up to the IACS deadline of 15 May, RPA could find that up to a third of  forms were hand-delivered. He said:

‘Since the introduction of  IACS in 1993 most offices have also provided some form of well publicised  receipt clinics, either at the office itself or in suitable locations  throughout the area, e.g. livestock markets, village halls etc.’

RPA’s aim, expressed at a 30 January  2002 meeting with the Minister, was to continue to provide a facility for  dropping off claim forms in person, ‘but the service [personal visitors] will receive will be limited to a basic check of their form and the issue of  an acknowledgement.’

From 2001 to 2002 RPA started moving  from handling claims at nine local offices (regional service centres) to  handling them at a smaller number of offices, with no geographical link between  the claimant and the place of processing. RPA’s telephone‑based customer  service centre opened in February 2005. RPA wanted it to be farmers’ main  route to finding information instead of the processing offices that remained.  In commenting on the factual accuracy of a draft of this report, Defra and RPA  gave us this description of what happened at their drop‑in centres in and  before 2005.

‘The staff involved complete a  basic check on the claims to ensure that there are entries in all the relevant  parts of the form that are required for an eligible claim. But that does not  extend to ensuring the farmer has maximised his potential claim. Checks to  ensure that the entries made are correct are only taken at a later stage  of processing. The service provided in 2005 at drop-in centres was broadly the  same as in previous years, both in terms of the number of sites and level of  checks undertaken.’

The evidence we have seen from some  of the complaints put to me is that some farmers did expect and could obtain  more detailed personal information on their claim forms up to 2004.

In commenting on the factual  accuracy of a draft of this report, Defra and RPA also gave us this extract  from page 23 of the policy update they issued in February 2005.

‘If you return the form to us  by post, we will send an acknowledgement postcard to let you know we’ve  received it. You can still take your completed form to your local RPA office  and ask them to pass it on to us, but bear in mind staff will only be able to  give your form a very basic check. You should not rely on them to make sure you  have completed it correctly.’

During our investigation, RPA  officers explained to us that the level of checking in drop‑in centres had  dropped through the 1990s and into the new century. In 2010 there was a huge change  to what RPA did at drop‑in centres to get complete and accurate data. They put  electronic capability into the drop‑in centres and this was well‑publicised.  They also extended the scope of the checks staff carried out at drop‑in  centres. RPA also noted that they had to be careful about the amount of  guidance they gave, because of the risk that claimants would say that they had  been misdirected. (See also paragraphs A4 and 146 and the Defra Permanent  Secretary’s comments at paragraph 147.)

Dual claims

A dual claim is a form of  overdeclaration. It is where two Single Payment Scheme claimants seek either to  establish entitlements on the same area of land (in 2005 only) or to activate  entitlements on the same area of land. One of them will be treated as making an  overdeclaration and, depending on the amount of land affected and its  proportion to the farmer’s total Single Payment Scheme claim, may have to pay a  penalty. RPA have told us that, for them, the communication between landlords  and tenants was of particular interest in 2005. That was because 2005 was the  first year in which landlords and tenants needed to decide who would claim.  There had been no need to worry about land disputes between landlords and  tenants until the Single Payment Scheme, because the previous subsidy payments  had been based on production not land area. RPA have told us that the Single  Payment Scheme meant there was an  incentive for both parties to establish the capital asset in the form of the  entitlements against which payment claims could be made. That introduced a new dynamic into the traditional  landlord/tenant discussions on the rights and responsibilities each had in  relation to direct payments.

EAGGF

The European Agricultural Guidance  and Guarantee Fund, set up in 1962, is the funding source for CAP schemes,  including the Single Payment Scheme.

ECR71

ECR71 is ‘Emergency change request  71’. RPA have told us that they found that their ‘high volume data capture’  work in 2005 (keying in the information on the Single Payment Scheme claims)  had not picked up all fields. A lower than actual number of field parcels  captured could mean a lower number of entitlements issued overall, with a  related inflation in value. ECR71 was a means to allow RPA to correct the  number of entitlements that had been allocated.

E-Calc

RPA built a system called the  entitlement calculator to give them historical data about what a farmer had  claimed in 2000, 2001 and 2002. It became known as E-Calc. Data items from the  pre-Single Payment Scheme schemes, as required by the Regulations, were fed  into E-Calc in April 2004. To ensure accuracy, RPA sent information statements  to every farmer detailing all the information they held and asking the farmer  to get in touch if any information was incorrect. In October 2005 RPA migrated  the information from E‑Calc into RITA and  E‑Calc has been static since that time.

Entitlements

In the Single Payment Scheme, an  entitlement is the right to a Single Payment Scheme payment. A definitive  entitlement is the basis for future claims and is an asset that can be traded  or used to secure loans. There were initially different types of entitlements  in England:  normal entitlements, set-aside entitlements, national reserve entitlements,  special entitlements and authorised entitlements for fruit vegetable and potato  (FVP) growers.

In 2005 farmers had to establish the  right to an entitlement before they could activate the entitlement for 2005 and  following years. By activating, RPA meant claiming payment. Farmers could  establish entitlements and have good reason not to activate them. RPA’s example  of a reason for non‑activation was that some farmers might not have the land at  their disposal for the 10‑month period needed to qualify for payment.

Farmers in England experienced delays in being  told their definitive entitlements by RPA because the Agency’s systems problems  had slowed down their validation of Single Payment Scheme claims. In cases  where RPA had been unable to complete their validation checks, they sent  farmers provisional or non‑validated entitlement statements.

Entry Level Stewardship (ELS)

One of the environmental stewardship  schemes funded by the EU. Entry Level Stewardship requires a basic level of  environmental management. A sister scheme is Organic Entry Level Stewardship.  In 2005 the scheme was managed by the Rural Development Service, which is now  part of Natural England. Natural England administer the schemes,  using mapping data provided by RPA’s Rural Land Register. RPA apply controls  and make the payments to the scheme claimants. See Rural Development Programme  for England  (RDPE).

European  Commission

The European Commission is the executive body of the European Union  (EU). The body is responsible for proposing legislation, implementing  decisions, upholding the EU’s treaties and the general day-to-day running of  the EU.

The Commission is accountable to the European Parliament and operates  as a cabinet government, with 27 Commissioners.   There is one Commissioner per member state, although Commissioners are  bound to represent the interests of the EU as a whole rather than their home  state.  The term ‘Commission’ can mean  either the 27 Commissioners themselves (known as the College of Commissioners  or College), or the larger institution that also includes the administrative  body of about 25,000 European civil servants who are divided into two  departments called Directorate-General and Services.

European Council and the Council of  Ministers

The European Council is the meeting  of the heads of the EU member states, its president and the European Commission  president. These meetings happen about four times a year.

The Council of Ministers is one of  the EU’s decision making and legislating bodies. Meetings of the Council of  Ministers are based around policy areas (such as Agriculture and Fisheries) and  have a relevant ministerial representative from each member state.

This report refers to Council  Regulations and Commission Regulations because the Council of Ministers and the  European Commission each have law making powers. The Commission’s powers are  delegated to it by the Council, and Commission regulations are generally the  more detailed laws needed to implement legislation passed by the Council.

The  Council of Europe is a different body.

European  Court of Auditors

The European Court of Auditors (ECA),  which has about 900 staff, is an independent audit institution that examines  whether EU revenue and expenditure is raised and spent in accordance with  Regulations.  It has the right to audit  any person or organisation handling EU funds and it reports to the European  Council and the European Parliament.

European Union (EU)

The European Union (EU) is an economic and political union of 27 member  states. The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC) formed by 6 countries (Belgium, France,  Germany, Italy, Luxembourg  and the Netherlands)  in 1958. In the intervening years the EU has grown in size by the accession of  the following new member states:

1973: Denmark, Republic of Ireland  and United Kingdom
1981: Greece
1986: Portugal and Spain
1995: Austria, Finland and Sweden
2004: Cyprus, Czech Republic,  Estonia, Hungary, Latvia,  Lithuania, Malta, Poland,  Slovakia and Slovenia
2007: Bulgaria and Romania.

The EU puts the population of  farmers in the 27 member states at 13 million. (Note that the European  Community (EC), which replaced the European Economic   Community, is one part of the structure called the EU. This report  refers to ‘EU legislation’, for the sake of better understanding. The strictly  correct term would be ‘EC legislation’.)

Farm Advisory Service (FAS)

A service, provided for by the CAP  reforms, to help farmers make their plans for meeting the new cross compliance  conditions. In England  it started work in 2007.

Farm  Crisis Network

A UK network of groups of volunteers drawn  from the farming community and rural churches. The network describes its  volunteers as being there to ‘walk with’ and support farming people and  families as they seek to resolve their problems, whatever these may be.

Field  data sheet

Part of the SP5 claim form for the  Single Payment Scheme. It asks for specific information about the applicants’  individual fields.

Forest Friendly Farming

Forest Friendly Farming was  set up in 2001 by the New Forest Committee. It described its purpose as being  to develop practical ways of supporting farming, commoning and woodland  management in the New Forest. The project  ended in September 2008.

Fruit vegetable and potato (FVP)

In 2005 the Single Payment Scheme  rules also provided for authorised entitlements for fruit, vegetable and potato  growers. Payments for fruit, vegetable and potato crops (FVPs) were new under  the Single Payment Scheme. RPA’s 2005 Single Payment Scheme Handbook explained  that farmers could establish entitlements on land growing FVPs in the same way  they could on other land eligible for payment. However, farmers needed to apply  for ‘authorised entitlements’ in order to activate their FVP entitlements. RPA  said they would allocate these ‘authorised entitlements’ based on information  in Single Payment Scheme claims about FVP produced in 2003 and 2004 and planned  for 2005.The FVP scheme no longer  exists.

Grazing  agreement

This agreement enables a land owner  to grant a third party the right to use a piece of land for the purpose of  grazing sheep or other animals.

Historic and hybrid

The 2003 reforms gave member states the  option of implementing different models of the Single Payment Scheme. The  default option provided for entitlements to be based on the value of historic  direct payment receipts and the land that gave rise to them.  Most member states and Scotland and Wales adopted that option. Hybrid  models were also allowed. Under these, the number of entitlements was allocated  on the basis of land claimed in the first year of the Scheme. The value of the  entitlements was determined by a combination of a flat rate per hectare in the  member state or region concerned and individual historic direct payment  receipts. If the combination was maintained at the same level over subsequent  years, this was termed a static hybrid, as adopted in Northern Ireland. But if the  combination changed, this was termed a ‘dynamic hybrid’ as adopted in England.  In 2005 10 per cent of the total available for payment was a flat‑rate payment  and the rest was based on farmers’ history of subsidy payments before the  Single Payment Scheme. By 2012 100 per cent of the payment will be flat‑rate.  RPA reached the historic element by calculating a reference amount for each  farmer, based on his or her subsidy payments in 2000, 2001 and 2002.

The rest of the United Kingdom, and most other EU  member states, decided to base Single Payment Scheme payments on a simpler  approach.¹⁰⁹

Integrated Administration and Control  System (IACS)

The 1990s reform of the CAP introduced the Integrated  Administration and Control System (IACS).¹¹⁰ It required each field, or group of fields, to have a unique identification  code and all animals to be identified and recorded. It set up an inspection  system for checking that farmers’ claims were correct and instigated penalties  for inaccurate claims. It also established what must be included in application forms, as well  as the checks thatmust be completed  by paying agencies, both by computerised means and by on-farm inspections. It gives a detailed penalty regime  where over-claims are identified. A parallel set of finance regulations  provides for penalties or ‘disallowance’ for member states where audits reveal  inadequate controls by the state’s paying agencies. However, ‘IACS’ is  also used generally to refer to the range of subsidy schemes in place before  the Single Payment Scheme.

Land  use codes

In Single  Payment Scheme claims, the land use codes identify the claimant’s use of each  field parcel, for example, crop or permanent pasture in particular years. The  land use codes that RPA issue for use by farmers may change from year to year  depending on changing EU regulatory requirements. For example, separate codes for particular energy crops  were dropped when the separate energy aid scheme was abolished in 2009.

Modulation

Modulation is a proportion of Single  Payment Scheme payments that is deducted to fund other agricultural and  environmental support. Farmers then receive a partial refund of this  ‘modulation’ deduction.

National Farmers Union  (NFU)

A trade association that represents  farmers in the United    Kingdom and also provides professional  representation and services to its farmer and grower members.

National Reserve

Under the Single Payment Scheme,  member states had to set up a fund called the National Reserve. Its purpose was  to support farmers whose business changed during or after the reference period  and who, because of that, had a lower historic element in their Single Payment Scheme  entitlements than their actual production capacity could justify. The National  Reserve gave these farmers an opportunity to obtain an increased reference  amount. Any increase applies to the historic element of their established  entitlements. RPA also made allocations from the National Reserve to claimants  who were not claiming subsidy before the SPS and who qualified as new entrants  to farming. Entitlements that are unused for three years (from 2009,  reduced to two years) are transferred to the National Reserve.

Natural England

A public body linked to Defra. They  describes their purpose as protecting and improving England’s natural  environment; and encouraging people to enjoy and get involved in their  surroundings. They are the government’s adviser on the natural environment.  Natural England  was created in 2006 from several parts of Defra, including the Rural  Development Service, which looked after environmental stewardship schemes such  as Entry Level Stewardship.

‘Obvious error’

‘Obvious error’ forms part of the regulatory  control rules (see IACS) that apply to the Single Payment Scheme and other  direct payments. It allows paying agencies to correct some errors on claim  forms as long as they are obvious from the claim form itself. This can ensure  farmers avoid reductions and penalties that would otherwise apply to their  claims. A claim form may be obviously incorrect, but fail to come within  the scope of the ‘obvious error’ regulations, because, for example, it is not  obvious what the ‘correct’ entry would be.

Overpayment

By the end of March 2009 RPA had  recovered about £25m that had been overpaid, according to their 2008‑09  Annual Report. The Report also said that RPA had underestimated the  complexity connected with Single Payment Scheme rules, multiple years and the effects of  corrective work. RPA estimated the overpayment debt was £22m, or about 0.05 per  cent of the fund value for the 2005‑07 Single Payment Scheme years. They said they  wanted to confirm the amount of the debt before they asked farmers to repay it.  The National Audit Office, RPA’s auditor, said they could not obtain sufficient  assurance from RPA’s records to be sure that the debtors were accurately stated  in 2008‑09. The NAO said: ‘Our testing  found indicative error rates of 79 per cent in uninvoiced debts and error rates  of 9 per cent in respect of amounts which had already been invoiced to farmers’.

Partial payments

RPA have told us that in 2005 and 2006,  they had the scope to make Single Payment Scheme part payments to farmers if  they expected to be unable to pay Single Payment Scheme claims in full  within their timetable. They could reclaim the money from farmers if, when  claim processing was complete, the part payment proved to have been an  overpayment. For 2005 Single Payment Scheme claims, RPA made partial payments  of 80 per cent to most farmers in May 2006. For any 2006 Single Payment  Scheme claims that they could not pay in full, they made partial payments of 50  per cent or more in February 2007.

Paying agency

Paying agencies are  accredited agencies or bodies in the member state that make payments on behalf  of the European Agricultural Guarantee Fund (EAGF) and the European  Agricultural Fund for Rural Development (EAFRD). In England the RPA were accredited as  the paying agency in 2001. Since 2005 they have been responsible for making the  Single Payment Scheme payments.

The Competent  Authority is the body of the member state that has the powers to issue and  withdraw the accreditation of paying agencies. In the UK, the Competent Authority  comprises the four agricultural ministers. In England the agricultural minister  is the Secretary of State for Environment, Food and Rural Affairs.

Co-ordinating Bodies are required where member states have more than  one paying agency, as in the UK.  They are charged with bringing together  information to be sent to the Commission and promoting the harmonised  application of European Community rules when more than one paying agency has  been accredited in a member state. In the UK the Co‑ordinating Body also acts  as the Secretariat to the Competent Authority.

Penalties

The Single Payment Scheme Regulations impose ‘reductions and exclusions’ on farmers’ claimswhere there has been a breach of the  Regulations. For example, theRegulations  provide that claims submitted after the deadline for claimsshallbe reduced by a  given percentage or excluded from the  Single Payment Scheme altogether.(The reduction depends on how late the claim  issubmitted.)  The Regulations also provide for a set  formula for reductions to farmers’ claims where they have made an  overdeclaration of eligible land. That might be, for example, if they have  claimed on land that they were not farming within the terms of the Single Payment Scheme. RPA will  also reduce claims if the farmer fails to meet the requirements of the  Regulations on cross compliance.

Reference period/amount

RPA  used farmers’ subsidy payments in 2000, 2001 and 2002 as the basis for  calculating the historic element of their Single Payment Scheme entitlements.  In 2004 RPA sent farmers the figures for the amount of land and animals that  they had used for the calculation in an information statement. They invited  farmers to contact them if they disagreed with the figures or believed they had  reasons for RPA to use a different period to calculate the historic element.  Farmers whose pre‑Single Payment Scheme subsidy payments had been unusually low  in 2000-02 for reasons outside their control could ask RPA to base their  historic figure on different years.

RPA Information Technology Application  (RITA)

RITA  is RPA’s largest computer system. It processes claims and calculates the value  of Single Payment Scheme payments. RPA found that RITA failed to perform as  needed when they implemented the Single Payment Scheme in 2005. RPA reviewed  their computer systems and upgraded them. Despite the changes made, the  National Audit Office commented in October 2009 that RPA’s software is complex  and is expensive to maintain. It also commented in October 2009 on the  continuing uncertainty about the accuracy of the data.¹¹¹

RITA delivery experts

RPA  nominated some operations staff to be delivery experts, that is, expert users  of RITA. These people were also processors’ first stop in resolving queries  about the correct application of the Single Payment Scheme guidance and  regulations. If a delivery expert was unable to answer a query, generally he or  she would refer it to the scheme management unit.

Rural Land Register

RPA  run the Rural Land Register, which holds digitised maps of all registered land  parcels. Land must be on the Register in order to qualify for payments under  the Single Payment Scheme or one of the environmental stewardship schemes run  by Natural England. The work to create the Register entailed taking a picture  of the land, marking the boundaries and converting this to digital data. RPA’s  deadline for completing the Register was April 2004, but it went live in  September 2004. In 2004 to 2005 landowners applied to register land using the  IACS 22 form. RPA were unable to deal with the 1,000 per cent increase in the  number of claims made in readiness for the Single Payment Scheme.¹¹²

RPA  based the first version of the Rural Land Register on data from the 2001  Ordnance Survey Master Map. They had contracted out the work to digitise the  field mapping data, but brought the digitisation work back in‑house in late  April 2006, with the aim of working faster. In RPA’s 2005‑06 Annual  Report, the chief executive noted the risk that the quality of data from  the Rural Land Register could affect RPA’s ability to make payments for the  2006 scheme year. He said RPA had set up methods of consulting better with  customers to ensure the data they held was correct. The number of  requests for mapping changes fell in the second year of the Single Payment  Scheme, but RPA remained cautious about implementing updates to the Register to  include more recent Ordnance Survey data. As late as 2007‑08, RPA found that  data quality and accuracy problems continued to affect the base information  they held – in their Customer Register and Entitlements Databases as well as on  the Rural Land Register. In 2009 they started updating the maps. Farmers  reported further mapping problems in 2009 and 2010.

Rural Development Programme for England  (RDPE)

The  RDPE funding schemes included the environmental stewardship schemes  administered by Natural England. Defra is responsible for RDPE, and RPA is the  paying agency. However, other bodies, such as Natural England, handle most of  the practical work. Regional Development Agencies also administer(ed) some  claims covered by RDPE funding.

Scheme management unit

Each  of the subsidy schemes administered by RPA has a scheme management unit. The  Single Payment Scheme scheme management unit is based in Northallerton and  works on Single Payment Scheme policy and audit liaison, as well as developing  operational processes. Among other things, it will provide an opinion on how  individual cases meet the requirements of Single Payment Scheme legislation and  policy. However, other parts of RPA also have a say in, or some responsibility  for, these aspects of the Single Payment Scheme.

Set-aside

Set-aside is a  longstanding EU market management measure. Arable farmers who receive direct  payments are required to move a percentage of their land out of production.  Until the policy was abolished in 2009, it operated through the Single Payment  Scheme by arable farmers being allocated specific set-aside entitlements.  Farmers had to claim these entitlements before any others they held. They also  had to keep the hectares matching the number of entitlements out of production.

Single Business Identifier (SBI)

RPA  give farmers unique reference numbers known as Single Business Identifiers. Some farmers  involved in separate businesses may have a different SBI for each business.

Single Payment Scheme (abbreviated to SPS  in the body of the report)

Introduced  by the EU as part of the 2003 Common Agricultural Policy reforms that replaced  11 separate crop and livestock based production subsidies with a single payment  based on land area. EC Council Regulation 1782/2003 set out the Single  Payment Scheme, giving 1 January 2005 as the earliest date for  implementation. In January 2004¹¹³ Defra explained that the main elements of the reform proposals that had led to  the Single Payment Scheme included: ‘breaking  the link between farm subsidies and production by “decoupling” direct subsidies  to agriculture’ and ‘cross compliance  to make subsidies dependent on meeting standards in key areas like environment,  and animal health and welfare, underpinned by a new Farm Advisory System’.

RPA’s Single Payment Scheme Information  Statement Explanatory Guide for England, published in July 2004, set out  the practicalities of the Single Payment Scheme for farmers.

• The Single Payment Scheme would replace most  crop and livestock payments from 1 January 2005.
• Farmers had previously received payments for  growing an area of crops or keeping a number of animals. Under the Single  Payment Scheme they would need to show they were keeping their land in ‘good  agricultural and environmental condition’. This would be called cross  compliance.
• The size of farmers’ payments would depend on  the number of entitlements they held.
• Farmers (people ‘carrying  out an agricultural activity’, including keeping the land in ‘good  agricultural and environmental condition’) could apply for entitlements in  2005. They could activate their entitlements, and so receive a payment against  them, in 2005 and every following year of the Single Payment Scheme by  declaring a matching eligible hectare on their application form. Most  farmers would have set‑aside entitlements (land not under cultivation in a  given period) and they would need to activate those before other entitlements.
• In England the Single Payment Scheme  would change gradually to a flat‑rate payment over eight years. In 2005 10 per  cent of the total available for payment would be made in flat‑rate payments. By  2012 100 per cent of the payment would be flat‑rate.
• Before 2012, the rest of the payment would be  based on entitlements calculated from individual farmers’ subsidy history. RPA  would do this by calculating a reference amount for each farmer, based on his  or her subsidy payments in 2000, 2001 and 2002.
• Farmers who had no subsidy history would receive  only the flat‑rate payment under the Single Payment Scheme, but could apply to  the National Reserve.
• The National Reserve would be funded by a  deduction from the amounts available for payment. RPA would also deduct money  for what they called modulation. These modulation deductions would fund agri‑environment  measures.
• Payments would be set at a different rate for  three regions: moorland within the upland severely disadvantaged area; the rest  of the upland severely disadvantaged area; and land outside the severely disadvantaged  area.
• For each region, RPA would set the final value  of the flat‑rate payment by taking the total amount available for payment and  dividing it by the number of eligible hectares declared by farmers in the  region in 2005.

Special entitlements

Farmers could establish ‘special  entitlements’ in 2005 if their pre-Single Payment Scheme entitlement to  agricultural subsidy had been based on having livestock, with little or no  land. They might have no land in 2005 or a very small area of land. The 2005 Single  Payment Handbook explained that payment for normal entitlements depended on the  farmer having enough eligible hectares at his or her disposal. With special  entitlements, payment depended on the farmer meeting certain conditions about  the number of livestock he or she had on his or her holding in the year of the  claim. Some farmers with little or no land could be disadvantaged by the Single  Payment Scheme’s €5,000 ceiling on the unit value of entitlements if they  claimed only normal entitlements. Special entitlements gave farmers a way to  avoid this.

SP5

The SP5 form is RPA’s Single Payment  Scheme claim form. The two parts of the form that were particularly relevant to  this investigation were SP5a, where claimants answered questions about what  they wanted to claim, and Annex 5b, which was the field data sheet(s)  where they recorded their individual land parcels. In 2005 claimants needed to  tell RPA:

• whether or not they wanted to establish  entitlements for their land under the Single Payment Scheme; and
• whether or not they wanted to activate those  entitlements.

They would need to activate their  entitlements each year if they wanted to receive payment for that year. But  they had only one chance, in 2005, to establish entitlements.

In 2005 question 3 of SP5a asked  applicants to confirm whether or not (‘yes’ or ‘no’) they were  applying to activate entitlements to areas that they had entered in  column J of the field data sheet.

In 2005 column J of the field data  sheet(s) was headed ‘area for which entitlements to be activated (ha) (i.e.  land which meets 10 month period on the form)’. Making no entry in  column J meant a claimant would receive no payment for 2005.

In 2005 question 5 of SP5a asked for  the date from which the land would be at the farmer’s disposal for a continuous  period of 10 months. It said:

‘The start date for having land at your  disposal must be between 1 October 2004 and 30 April 2005.  If you do not complete this we will assume that  the 10 month period for having land at your disposal will start on 1 February  2005.’

In 2006, and in later years, RPA  revised and improved the SP5 form.

SPV1

The SPV1 is a standard letter used  by RPA to tell Single Payment Scheme claimants about omissions in or possible  problems with the information they have provided in their SP5 claim forms. RPA  guidance to staff determines what problems in claim forms will require an SPV1  letter.

Tenant  Farmers Association

An association formed  in 1981 by a group of farmers who felt that their interests were not being forcefully  represented by existing bodies. It describes itself as the only organisation  dedicated to the tenanted agricultural sector.

Whole  case working

In 2006 RPA started the move to ‘whole case working’. At first they  referred to ‘SBI working’, which replaced the task‑based (also known as the  workflow‑based) approach of a processor taking the next task in the queue  regardless of which claim it was. They have told us that they very quickly  realised that task-based working meant that 10 people could be writing to the  same farmer. SBI working meant organising all the tasks by SBI number as far as  possible. This approach evolved into whole case working, with RPA changing the  computer systems throughout 2006 until a software release in April 2008  gave caseworkers reasonably easy access to all the details of an individual  claim. Later software releases developed this.