Rushed testing of IT and poor management led to the failure of the single payments scheme for farmers, says a parliamentary report.
The chair of the House of Commons' public accounts committee, Edward Leigh, has condemned the government for its failure to implement the single payments scheme to farmers effectively.
Leigh said that the implementation of the scheme was "a master class in bad decision making, poor planning, incomplete testing of IT systems, confused lines of responsibility and a failure by the management team to face up to the unfolding crisis."
A report by the committee, published on 6 September 2007, found that only 15 per cent of payments had been made by 31 March 2006, and some 3,000 farmers were still unpaid at the end of October 2006. The payment delays caused stress, anxiety and financial hardship in the farming sector.
In March 2006 the Rural Payment's Agency's then chief executive was removed from his post, but was retained on full pay while the Department for Environment, Food and Rural Affairs (Defra) determined his terms of departure.
More than £120m was spent by Defra and its agency on implementing the EU land area-based single payment scheme, which replaced production-based Common Agricultural Policy subsidies.
The single payment scheme was not a large grant scheme, but Defra's choice to implement a complex option in the shortest possible timescale of one year was unmanageable, says the report.
In their haste to have the scheme ready on time, Defra and the agency did not follow the basic principles of project implementation, according to the findings. This included putting in place adequate pilot testing and the development of systems to extract management information necessary to monitor progress.
"Given the history of implementing government IT programmes, and in view of the wider changes being attempted, it would have been more sensible to trial the scheme in the first year and implement fully in year two," the report says.
The risks were compounded by the requirement for digitised mapping of land in England, which Scotland and Wales already had in place.
Defra implemented the scheme as part of a wider business change programme to rationalise systems and reduce the staff headcount by 1,800. But the change programme had cost £258m by the end of March 2006 and is expected to achieve efficiency savings of only £7.5m by March 2009.
Furthermore, the committee found that because the Rural Payments Agency shed too many of its experienced staff at a time when it needed them most, it then spent some £143m on agency staff to process claims.
Mark Serwotka, general secretary of the Public and Commercial Services Union, which represents staff at the agency, said: "Vital knowledge and experience was lost as jobs were cut in a race to meet so called government efficiency targets.
"The experience of the Rural Payments Agency illustrates the disastrous consequences of relying on new vastly complex IT systems in the hope that jobs can be cut with no impact on service delivery."
He called on the government to learn the lessons of this report and fundamentally reassess its job cuts agenda across the whole civil service.
This article was originally published at Kablenet.
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