The Auditor General has reported that the Scottish Government programme set up to process farmers’ European Union (EU) payments continues to face “major obstacles” and is unlikely to deliver value for money.
The programme has been beset with lengthy delays, missed payment targets and rising costs, an Audit Scotland report found. Opposition parties said the spending watchdog’s findings revealed a “litany of failure” and “incompetence” as they called on the new Rural Secretary to conduct a swift review.
The Audit Scotland report on the five-year IT scheme which began in 2012 found that although the system is working and began making payments in December 2015, there are still “significant defects” slowing down progress.
NFU Scotland president, Allan Bowie branded the handling of the payments “an absolute disgrace”.
He added: “At this late stage, no-one knows if the Scottish Government can meet the EU requirement to pay 95.25% of support by June 30, and that is an appalling state of affairs. The IT system is still toiling to process and approve all applications made in 2015, and a clear priority for the new Scottish Government is to finish what it started.”
Deputy First Minister John Swinney responded by saying that the Government’s focus remained on getting payments out to farmers and crofters ahead of the EU’s deadline.
“As we do that, we are keeping a tight rein on activity, costs and risks to secure the best value we can for the taxpayer,” he said.
“We have made progress since Audit Scotland did their work for this report. Around 80% of first instalments have now been paid using the new system, which has been performing well during this year’s Single Application Form window.”
The Government admitted in March there is an “extreme risk” it will not make all the required payments by the European Commission’s (EC) deadline. Originally estimated to cost £102 million, the programme now has a final budget of £178 million and a reduced scope. At the end of March, it had spent £126 million and funds could run out before the IT system fully meets EC regulations. Failure to comply may lead to financial penalties of between £40 million and £125 million.
The report identified a number of problems with the programme’s management, including “significant tensions between teams, confused governance and accountability arrangements, and a failure to deal effectively with a significant conflict of interest held by a contractor on the programme” who “could benefit financially from decisions he had an influence over”.
Caroline Gardner, Auditor General for Scotland, said: “The CAP Futures programme has been beset with difficulties from the start.
“These problems, and the way they have been dealt with by the Scottish Government, are a serious concern, particularly as the programme continues to face major obstacles and is unlikely to deliver value for money.
“The scale of the challenge ahead should not be underestimated.”
