Chamber and committees

Staff across Rural Payments and Inspections Division area offices have received face to face training, e-learning and desktop guidance to support the launch of the new rural payments and services system in December 2014.

They have also had access to on the job coaching on the system from line managers and trainers to support the processing of applications.

Staff are now able to access online the most up to date training, guidance and communications from one place making it easier to find the information they need when dealing with customer applications.

Direct payments are normally fully funded by money obtained from the European Commission (EC). This involves calculating the amounts due, placing a request for the requisite funds with the EC via the Rural Payments Agency who act as the co-ordinating body for the UK. This process can take eight days in most circumstances and longer if public holidays intervene. In order to shorten this time frame, the Scottish Government has decided to make the payments in advance of the reimbursement from the EC using its own cash management process to allow payments to be made in, at best, three days or typically four days.

In any new IT system there can be unforeseen IT issues which need to be fixed. Although system integration and user acceptance testing takes place before go live the nature of the CAP system is such that it is not possible to use extensive testing in a live environment.

As the issues cannot be foreseen we cannot say what they are, and it would not be prudent to make assumptions around what they are.

As with the introduction of any new IT system, there is a robust process to manage, prioritise and resolve any system issues as quickly as possible.

The Futures project spend to 31 March 2016 is £131 million, of which IT spend is approximately £98,250,000 and non IT spend is £32,750,000. The outstanding spend is estimated at £46.8 million over the remaining year of the project.

The total expected cost remains at approximately £178 million, in line with the latest business case.

The increase from the original estimated cost has been driven almost exclusively by additional IT costs, in addition, the requirements of the system were not fully known when initial estimates were prepared as subsequent delays in European Commission clarification of requirements and significant additional CAP complexity changed the complexity of the IT programme by orders of magnitude.

The Scottish Government has earmarked up to £200 million of national funds so that any farmer or crofter who has not received an instalment by the end of March 2016 will receive a nationally funded payment from the Scottish Government by the end of April 2016. We aim to complete all payments within the Basic Payment Scheme window which opened on 1 December 2015 and closes on 30 June 2016.

Presently I am unable to provide this information as not all payments have been made as single applications forms are still being processed.

The total payments made at 2 March 2016 is 9,755 (54%), as reported to the Rural Affairs, Climate Change and Environment Committee and industry stakeholders.

The new system has been designed flexibly to make it possible in future to accommodate policy changes.

The new CAP reform policy in England in 2005 saw similar changes to those being undertaken in Scotland in 2015 Basic Payments. In 2005 England moved to payment regions with different payment rates.

In England in 2005, 120,000 applications were received against a projection of 80,000. Industry promised payments would happen in February 2006 but only 2,400 payments were actually made. By March, only 4,500 payments were made. By April 2006, 56,400 payments were made (24% of claim value).

As a result of the serious problems experienced, contingent liabilities were established to cover disallowance in 2005-06 of £13 million and £305 million in 2006-07.

The new policy is highly complex with two old schemes replaced by six new schemes in Pillar One. The decision to move to three payment regions was a decision that was taken jointly with industry. Following a consultation exercise, in which Scottish Government originally proposed a two region approach, government and industry both felt it important to focus on meeting Scotland’s needs in full knowledge that it would make delivery more challenging, including moving to three payment regions and initiating new rules to prevent paying inactive farmers. We knew that there was a high risk to the payment timetable due to the move away from historic payments. During the negotiations with the National Farmers’ Union and other stakeholders, we jointly decided to be outcome focused, even though that may have an impact on timing.

The Scottish Government undertook extensive consultation with stakeholders during the policy development phase of the new CAP. The decision to adopt a three region model was taken in June 2014 and answered to Parliament.

The Futures Programme which includes the new IT system began in 2012. The Scottish Government made it clear that the absence of EU and domestic policy decisions at the start of the IT programme was one of the difficulties.

The Futures Programme team were kept in constant touch with the policy development process.