Ombudsman criticises Defra over farmers' compensation

The EU pays farmers money to maintain their land

A government agency should compensate two farmers for losses incurred when it failed to pay out EU subsidies on time, says the parliamentary ombudsman.

Ann Abraham recommended they be paid £3,500 and £5,500 and 22 other cases be reviewed for possible compensation.

But she was "saddened" Defra had not accepted her "relatively modest" sums and would only agree to pay £500.

Defra said it would apologise and make a "consolatory payment where justified" but would not make further payments.

The EU Single Payment Scheme, which provides grants to farmers for maintaining their land, was introduced in 2005 to replace another subsidy.

Computer failures

The £1.6bn-a-year subsidy is administered by the Rural Payments Agency - an executive agency of Defra (the Department for Environment, Food and Rural Affairs).

But delays to the 2005 payments in England, blamed on computer failures at the agency, cost millions of pounds and were described by MPs as a "fiasco".

Ms Abraham looked into what happened to some of the farmers who did not get their money on time.

Important principles are at stake here Ann Abraham Parliamentary Ombudsman

She said the two farmers, identified only as Mr W from North Yorkshire and Mr Y from East Anglia, were representative of 22 other complaints made to her office.

The ombudsman said the failures by the RPA to stick to its timetable "took a direct personal and financial toll" on both farmers.

She said the agency continued to tell farmers it would keep its payment timetable, when it should have known that was "increasingly unrealistic".

'Saddens me'

But she said Defra had not accepted her recommendations in full

She added: "Important principles are at stake here. My view is that an appropriate remedy should be forthcoming where injustice has been suffered as a consequence of maladministration by a public body.

"It ... saddens me that a public body refuses to provide relatively modest financial remedy for substantive injustice to people," she added.

There is no basis for making further payments related to estimated financial losses Defra spokesman

In response Defra said successive ministers had apologised for the problems farmers faced when payments were not made on time.

"Those affected also received interest, where this amounted to £50 or more, in lieu of compensation where payments were made after the legal deadline.

"The department agrees with the ombudsman that a personal apology should be sent to the farmers covered in her report along with a consolatory payment where justified.

"This will now be done. However it remains of the view that there is no basis for making further payments related to estimated financial losses."

'Poor administration'

Ms Abraham said those "consolatory payments" amounted to just £500 each.

In a separate report on the oversight of the farming subsidy, the Commons public accounts committee described it as "a singular example of comprehensively poor administration on a grand scale".

They were responding to a National Audit Office report out in October which found that while payments to farmers had been speeded up - "significant issues" remained.

These included the fact that the average cost of processing claims in England was £1,743 - compared with £285 in Scotland.

The committee said Defra had "consistently failed to spot continuing problems with this scheme" and "get to grips" with the issues.

As a result the department had agreed to provide it with progress reports.

The Defra spokesman said "substantial improvements" had been made in making payments on time but it accepted "further work is required to ensure that the RPA can deliver an improved, reliable and cost effective service to the farming industry in the years ahead".

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