Meeting of the Parliament

Meeting date: Tuesday, September 12, 2017

Official Report 880KB pdf

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Common Agricultural Policy

The next item of business is a statement by Fergus Ewing on the common agricultural policy and a plan to stabilise future payments. The cabinet secretary will take questions at the end of his statement, so there should be no interventions or interruptions.

15:17  

The Scottish Government is committed to ensuring that eligible rural businesses that apply to the Scottish Government for support under the common agricultural policy receive their entitlements promptly and in full, which must be done in full compliance with the prevailing regulatory regime.

Although improvements have been made, we have not fully achieved that aim during the current common agricultural policy cycle. Continued action is needed, not just on the substance of how we deliver payments, but on the way in which we conduct our business in order to ensure that our customers are at the centre of our approach.

How we arrived at this point is important in understanding how we move forward. Good progress has been made in delivering the rural payments and services system compared with 2015 and 2016, but challenges remain. The policy and legal environment is extremely complex. Decisions that were taken to design our systems were done in full collaboration with our partners. It was a customer-focused approach, but one that undoubtedly added more complexity.

Further, the future policy and legal landscape is far from clear, when it comes to the United Kingdom’s approach to Brexit negotiations, but the risks to Scottish agriculture and farming are very real without clarity, which will be needed soon. Even more concerning is that agriculture policy, which has hitherto been devolved to the Scottish Parliament, is at risk of being reassimilated by the UK Government through the European Union (Withdrawal) Bill.

Despite all that, my role as cabinet secretary remains clear. I will continue to work to ensure that our eligible rural businesses that apply for funding can be paid in full and on time. My firm commitment is to offer our customers a CAP service and the right tools that are fit for purpose not just today, but tomorrow.

With the closure of the CAP 2016 pillar 1 payment window in June, the Scottish Government has captured lessons from a rapid review of delivery. They complement findings from Audit Scotland’s reports in 2016 and 2017. I am therefore today publishing the “Common Agricultural Policy—Plan for Stabilisation”. Copies will be available to members immediately here and online. The plan aims to target specific and sustainable improvements in our strategic approach and our business and information technology processes, and to deliver value for money and compliance with European Union regulations. The plan also prepares businesses for an uncertain future and seeks throughout to improve the quality and timeliness of engagement with customers.

I will cover briefly the areas within the plan. In order to deliver payments in full and on time, we will continue to tackle the major causes of poor customer service, errors and payment delays by investing further in our business and information technology systems.

The plan is based around five aims. First, payments to customers will be made on time, in full and compliant with relevant law. Secondly, customers will have a more consistent and responsive service when interacting with our staff. Thirdly, customers will be empowered to take more direct control over their applications and land information. Fourthly, the tools that we use and share with customers, including our IT, will reflect the needs of customers and the business, now and in the future. Fifthly, we will support the development of our people and we will drive efficiency in our business processes.

Those aims are supported by six focused areas of improvement. I will deal with those in order, starting with what our customers experience. I have visited most of the rural payments and inspections division offices and have spoken to the excellent staff who work in them. They have a huge commitment to their work, and are trusted and appreciated by our farmers and crofters. I and they want to do more and to do better, so we will improve the customer experience through publication of service standards so that customers know what to expect and what their obligations are when applying for funding.

I am also today providing much-needed clarity and certainty for farming businesses by publishing a schedule of dates. The schedule includes all pillar 1 and 2 schemes, application windows, inspection windows and windows for our loans schemes. In addition, we will improve the timeliness and accuracy of customer letters and we will streamline our guidance.

We will improve our relationship with our customers through use of modern communication channels so that we can better understand their needs. I confirm today that we have, in that spirit, already made efforts to contact the few remaining less favoured area support scheme 2015 customers who have neither received their payments nor applied for loans, so that we can to discuss their circumstances.

To stabilise payments for those who have applied recently, I have agreed with the Cabinet Secretary for Finance and the Constitution financial backing so that I can announce today a new loans scheme for eligible basic payment scheme customers who applied this year. The scheme will provide equivalent funding—not at 80 per cent, as was the case last year, but at 90 per cent of their estimated entitlement.

On timing, I understand that the period from November to the year end is often an important time for farmers and crofters to make major spending decisions. That is why I am announcing the loans scheme now, so that—compared to years past when CAP payments would have been paid in December or January—the overwhelming majority of farmers will be able to access almost all their funding from November. There is no doubt that that will be real and practical help, from the businesses’ point of view.

That does not detract from my commitment to accelerate CAP payments through the work that is set out in the plan. Customers will begin receiving letters by the end of September: I encourage swift return of the necessary paperwork by farmers and crofters in order that they can be sure of a November payment.

I now wish to turn to the LFASS. By publishing a schedule of dates today, I am making known what I hope to achieve for LFASS customers. For those who applied in 2016, our payment processing is beginning this week, and I expect the majority of payments to be made by the end of October. For customers who applied this year, LFASS 2017 scheme payments will begin in May 2018.

LFASS payments are complex and are, from a technical standpoint, dependent on the full processing and validation of BPS entitlements. That complexity has always meant that they have been subject to possible delay. However, today I commit the Scottish Government to starting payments to LFASS customers in May next year. I will assess progress in early 2018 and, if it is clear that we cannot start the payments in May, I will bring forward a further LFASS loans scheme, in which loans will be payable from April. Payments would be set at 90 per cent of eligible claim value and would ensure that eligible customers would receive virtually all their claim, as expected.

To support that work, we will simplify our business and, in doing so, we will free up capacity to help us to deliver customer service excellence. We will limit the scheme changes that we make that cause complexity, and we will pilot new ways of undertaking land inspections in order that we can improve efficiency.

We propose to implement from early next year a new system of land information management that will give farmers the ability to verify the data that we hold already and to update it directly, and online. That change represents a major improvement in business efficiency and will, in turn, reduce errors and move significant activity away from a challenging part of the payment cycle.

To complement that change, we will encourage and support all remaining paper customers to apply online through the SAF—single application form—2018, in order to build on the 78 per cent online SAFs that were received last year. That will reduce data errors and improve our ability to process applications on time. As the Cabinet Secretary for Rural Economy and Connectivity, I am doubly aware that some farmers and crofters are still not comfortable with using the internet for that purpose. I have weighed the benefits of a compulsory approach to applications and have decided not to make online SAFs mandatory. Instead, we will provide our customers with all necessary support through our area offices, including one-to-one assistance.

The plan also looks to tackle our historical IT challenges. We have taken on board the many criticisms and comments that have been levelled at our IT system and will continue to build a reliable IT platform that meets customers’ expectations, is managed to best industry standards and is in line with a new digital strategy. We have agreed with our IT delivery partner, CGI, refreshed organisational planning to deliver the functionality that is needed to make payments accurately and on time.

Finally, we will continue to implement major changes to our planning and governance systems, and to use those to deliver enhanced benefits and value for money. We will continue to improve knowledge transfer and disaster recovery plans across all our business areas.

I recognise that farmers, foresters, crofters and businesses need to forward plan, often years ahead, so I am doing everything that I can to provide stability to help them. The UK Government claims to be doing the same. It talks about EU funding for—I quote—“farm support” being matched until 2022, but businesses can take no comfort from that so-called guarantee, because there is no clarity about what it actually means, and the only scheme-specific commitments that we have so far from the UK Government are for pillar 1 and LFASS payments for those who will apply in 2019.

In the meantime, farmers need certainty to plan their crops, foresters need certainty to plan new woodlands, and rural businesses need certainty to plan for growth. The Minister for UK Negotiations on Scotland’s Place in Europe, the Cabinet Secretary for Finance and the Constitution and I are seeking clarity about that as a matter of urgency.

In summary, I have listened carefully to what farming businesses, crofters and national bodies have said. I have been told that people want a system that provides certainty: certainty is the bedrock of confidence, and confidence is vital if businesses are to invest. That is why I took action to implement the loans schemes last year, that is why I am implementing a BPS loans scheme for this year, and that is why I am pre-announcing a possible loans scheme for LFASS for next year. All the while, I am taking the tough decisions that ensure that the underlying CAP payment systems are stabilising and improving so that one day we will not need loans, at all. Above all, the plan puts the customer first and prepares us for the uncertain world ahead.

I am happy to take questions.

The cabinet secretary will take questions on the issues that were raised in his statement. I have up to 30 minutes for questions, after which we will move to the next item of business. Members who want to ask a question should press their request-to-speak buttons.

I refer members to my entry in the register of members’ interests.

I thank the cabinet secretary for prior sight of his statement and I welcome the promises that are set out in it. It is about time that we had a coherent plan on the next steps for CAP payments. I welcome the loans scheme, which I called for in my speech last week, and I welcome the simplification of systems and processes.

To farmers and crofters, what Fergus Ewing has outlined today is too little, too late. Nonetheless, it shows an appreciation of a problem that needs to be solved. Let us never forget that, this year, we have seen farms’ debt rise by another £113 million to an all-time high of £2.23 billion. We have seen farms’ incomes fall by 75 per cent over five years and by 48 per cent in the past year alone, to a completely unsustainable level of only £12,600 a year per business, and we have seen three years of chaos on farm payments and farmers in despair and unable to pay their bills.

The cabinet secretary has made promises today that the IT problem that was created under his watch is partially fixed. With that in mind, will he get on with the job of turning around the fortunes of Scottish farming? He should have been concentrating on that in all the years when the CAP fiasco was unfolding. How will he resolve the basic unprofitableness of Scottish farming, which has continued to worsen under his Government?

First of all, I am pleased that the Conservative spokesman welcomes the loans scheme, which I believe will be welcomed across the farming community. It is a pragmatic and practical response to the difficulties that we have had. I have learned from the many farmers whom I have met as I have travelled thousands of miles around the country over the past year, that farmers are pragmatic and practical people. They have to be. Therefore, payment of 90 per cent of a claim in November will be welcomed as a practical step. I hope that the statement about the undertaking that an LFASS loan will be available, should one be required, will also provide the certainty that farmers look for.

I am aware, of course, of the publication of information about levels of farm debt. From the information that has been made available to me, there are two sectors in the UK economy in which debt has risen and banks have been lending: one is farming and the other is utilities. The situation is broadly similar across the UK, which suggests that rising debt might be substantially because farmers have sought—I welcome this—to invest and to improve their holdings, including investing in a new combine harvester or shed. That might partly explain the rising debt levels.

However, the figures that I have from banks on farm debt show that debt levels have been rising since 1994—for the past 23 years. The statistics also show that the level of debt—this is an average figure from a total for the sector—is equivalent to 8 per cent of the capital value of the farm. Therefore, it is not correct to conflate borrowing with financial difficulties.

I make the final point that I have, where farmers are in serious financial difficulty, instructed rural payments and inspection division offices to treat cases of financial hardship sympathetically. That is important—especially because farmers tend to be proud people who are perhaps not prone to seeking help as quickly as others might. Help is available in extreme cases, and I am grateful for the opportunity to make that clear today.

I thank the cabinet secretary for giving us prior sight of his statement.

The cabinet secretary said that sorting out this shambles was his top priority. That was 16 months ago, but he appears to have made no headway. Today we are told that the fiasco is on-going, with the announcement of a further loans scheme. A 90 per cent loan is cold comfort to someone who has not received any of their 2015 payment or who is afraid to take out a loan because they are unclear about their entitlement.

Will the cabinet secretary give us an indication of when the system will be fit for purpose and when farmers and crofters will be paid in full and on time?

I am sorry that the Labour Party has not welcomed the loans scheme. That seems to be a little churlish, but there we are. That is really up to the Labour Party.

I do not accept the picture that has been painted by Rhoda Grant, and here is why. In respect of the basic payment scheme for 2015, we have paid 99.9 per cent. In respect of the basic payment scheme for 2016, we have paid more than 99 per cent. In respect of the LFASS payments for 2015, all but 312 have been made. Only 26 businesses have not received either a payment or an LFASS loan to provide interim financial support, and some of those businesses might not be eligible for the LFASS. However, 16 appear to be eligible and were offered an LFASS loan previously, but declined it. We are in the process of contacting those businesses to discuss their precise circumstances.

I mention those figures because it matters greatly to me that we help people who have not received either a loan or a payment. However, those people are now a very, very small minority. Those are the facts, and I hope that at some stage, Opposition politicians in the Labour Party will acknowledge that we are performing, that the system is fit for purpose and that we have a plan—[Interruption.] Well, 99.9 per cent is quite a good exam result, by any standards.

My consideration is not political posturing; it is getting on with the day job, and that is what we are doing.

I remind members that I am the parliamentary liaison officer to the cabinet secretary.

I am delighted to hear that the majority of farmers in my area should expect to access almost all their funding from November, which will bring some stability in what is an uncertain future. Will the cabinet secretary expand on whether the ambiguity around Brexit and the potential threat that it poses to Scotland’s farmers and rural communities helped to prompt that action from the Scottish Government?

We announced the plan today and the loans scheme and potential LFASS loans scheme because that is the right thing to do and will, I think, provide a degree of the certainty that is required, especially in light of the uncertainty and lack of clarity that Emma Harper mentioned. After all, we are only 18 months away from the proposed Brexit day. Farmers plan things over a long period, and there is no answer on, confirmation of or clarity about what schemes—the LFASS, for example, or pillar 2 payments—the UK Government will support post-2019. That means that on forestry, on LEADER programmes, on RPID programmes and on environmental programmes there is no certainty—indeed, no information whatever—about schemes post-2019, which is only 18 months away.

My advice to Michael Gove is to get on with the day job and start proposing some answers and, above all, providing clarity and certainty to our farmers and crofters.

I refer members to my entry in the register of members’ interests.

At last I can welcome some suggestions from the cabinet secretary. They come too late, but they are an acceptance of fault.

The plan lacks ambition, with 95 per cent of basic payments still to be made by the EU deadline and no solution to the original problems. Given that the plan is the cabinet secretary’s own, he should be aware that if he is unable to meet key dates and times Scotland will not accept the simple solution of his investing more money and taking on extra staff to resolve the issue. Is he therefore prepared now to accept full responsibility for what is definitely his own plan? A yes-or-no answer will do.

I have never shirked responsibility in any way whatsoever. The buck stops with me, and that continues to be the case. I am confident that we will meet the BPS 95 per cent target this year. Last year, we were at 90 per cent and, sadly, fell short, which was a frustrating experience. Most important was the impact on those farmers who did not receive their full payments on time, which troubled me greatly.

I accept the responsibility—my answer to Mr Mountain is yes—and I am confident that, this year, we will reach the main target of 95 per cent. Why? Because we have a strengthened management team who have been in situ and have got their feet under the desk, and they have worked with me over the summer months to produce this solid plan. We have also strengthened governance, and we have had collaborative and successful dealings with CGI. Over the summer, as I have travelled around shows, RPID offices and Forestry Commission conservancy offices, I have made it my business to see that the staff, too, are appreciated for the work that they have done, because they are the ones at the sharp end and they are hugely trusted and appreciated by the farming community.

The buck stops with me and I entirely accept the responsibility. Failure is not an option this year—I am entirely confident of that.

You said that last year.

Your turn will come, Mr Rumbles.

Has the cabinet secretary seen that the UK Tory Government is setting aside £230 million for fines to cover its CAP basic payment failures in 2015-16? That suggests a pro rata cost in Scotland of around £41 million. What is the Scottish figure?

I am aware of reports of the scale of the disallowance that was experienced in 2015-16 in England, which was reported to be £230 million. We are not forecasting disallowance on that scale here in Scotland. As was previously reported to Parliament, we have estimated late-payment penalties for 2015 at around £5 million and for 2016 at around £500,000 to £700,000. However, it will be some time before the final totals are available following the due diligence that is being carried out at EU and UK levels. All member states carry the risk of wider disallowance, and Scotland is no different. Nevertheless, over the past 10 years disallowance has amounted to around 1 per cent of the total CAP expenditure, which is broadly within tolerance levels and compares reasonably with the figures for other parts of the UK. My job is to get on with the work in Scotland, and that is what I am focusing on.

I welcome any improvement in the funding streams that will ensure that farmers and crofters get their payments on time.

Let me push the cabinet secretary on whether a risk assessment has been carried out in relation to financial penalties imposed by the European Commission. He mentioned late payments in 2015 and 2016, but Audit Scotland also estimated that the penalty for control weaknesses could be as much as £60 million. What amounts have been set aside and in which budget year will they fall?

I thank Jackie Baillie for what appears to be a welcome for the loans scheme. Rhoda Grant did not welcome it, but Jackie Baillie does—at least, that seems to be the case, but maybe there are two views.

If I recall the Auditor General’s figures correctly, the report for 2015 opined that the total aggregate penalties and disallowances would amount to between £40 million and £120 million. As I say, our indicative figure is £5 million. The Auditor General estimated that the total for 2016 would be up to £60 million, whereas our figure for late-payment penalties is around £500,000 to £700,000. Jackie Baillie asks, “What about disallowances?” Disallowances are thoroughly considered, and I am considering these matters in great detail with officials. I assure her that such assessment is a routine, necessary, standard and continuing part of government. I work closely with my colleague and friend Derek Mackay and his colleagues in the finance department to ensure that the taxpayer in Scotland is protected against any disproportionate penalties and disallowances. As soon as the figures have been clarified—which will not be for some considerable time—I will, of course, inform the Parliament, as I always do.

I thank the cabinet secretary for the advance copy of his statement that he provided and the schedule of key payment dates that accompanied it. In reading that schedule, I notice that the environmental co-operation action fund will remain under review, as it has been for the past two years. Given that the fund is—to use the cabinet secretary’s own words—a practical and pragmatic way to support farmers who want to co-operate with one another on vital issues such as flood management, when will it be reopened so that we can allow farmers to do the important job of protecting our rural towns from flooding?

Mr Ruskell makes a very important and constructive point. There were audit issues with the environmental co-operation action fund. Of course, there are other funds, such as AECS—the agri-environment climate scheme—that have been operating to ensure that environmental payments are made, but I will look into the matter and will write to Mr Ruskell as quickly as possible with a detailed reply on when we expect the environmental co-operation action fund—which, as he says, along with other schemes, makes an important contribution to alleviating flooding in various ways—to reopen.

When will the cabinet secretary take action to call in stakeholder experts from producers, environmentalists and consumer groups to design the bespoke system of agricultural support that Scotland actually needs post-Brexit?

We have already taken a number of steps to involve experts. That followed a parliamentary debate in which an amendment by Mr Rumbles was accepted. We are already doing what he asked us to do by having a panel of advisers—our national council, which I will meet later this month—who will provide advice on the opportunities and the challenges in Scotland. I engage with the stakeholders that Mr Rumbles referred to all the time.

Of course, we want to be able to design our system in Scotland, but the UK Government has not yet given us clarity that there will not be a power grab of the powers relating to agriculture and fisheries that rest with the EU. We have no clarity about that, nor do we have—as I said earlier—any clarity about what the future funding arrangements for pillar 2 and certain other payments will be post-2019, or whether the UK Government proposes that the in-farm support that it has promised will be allocated on the same basis as it is in the existing schemes or on some other basis. We do not know, either, what the budget for rural payments will be, despite the fact that, during the Brexit campaign, several senior UK Government ministers promised that funding would be at least matched.

Once we get some clarity from the UK Government—I am to meet Mr Gove on 25 September—we will be able to carry on with the task of designing a better system in Scotland. We are already taking substantial steps and detailed advice, as well as engaging with stakeholders, to proceed with and progress that work.

The added certainty for farmers and crofters that the cabinet secretary has provided is most welcome, and I whole-heartedly agree that we should get the money into the pockets of our farmers, where it belongs, as soon as possible.

I note that the cabinet secretary said that farmers will be receiving letters by the end of September. How does the Government plan to advertise that to farmers across Scotland to make them aware of the welcome news and ensure the swift return of the necessary information to be sure of a payment in November?

The letters of offer will be issued at the end of this month. Clare Haughey is quite right that we need to promote this. I know that the specialist agricultural press will do that very effectively, as always. The purpose is to make sure that all farmers and crofters are fully aware that the money in question is for them.

I want to say something about the loans scheme, too. Last year, we found that only 74 per cent of the basic payment offers were accepted. Members might ask why 26 per cent were not accepted. I want to make a number of points to farmers.

First, there is no interest on the loan, except in the unusual and very rare event of the loan exceeding the entitlement, but even then there is no interest unless the recoupment of the excess over the entitlement is paid after 30 days. There is no interest and therefore farmers should not worry about burdening themselves with loan interest.

Secondly, this money is for farmers. Some farmers, perhaps because of altruism or moral integrity, feel that they would be taking money away from the national health service, hospitals or schools, but that is not so. The money is for farmers. They are entitled to it and we want them to take up the maximum value of the loan. I am grateful to Clare Haughey for giving me an opportunity to make those points clear.

I, too, thank the cabinet secretary for an advance copy of his statement. I declare an interest as an LFA hill farmer.

Although I welcome the cabinet secretary’s intention to start the 2016 LFASS payments next month—in October—he will be well aware that that means that the payments are five months late this year. To forestall all this happening next year, he is pre-announcing today next year’s LFASS loans scheme for May 2018. All the loans schemes and the IT uncertainty add costs to an already hard-pressed industry that is now £2.3 billion in debt to our banks.

When will the IT system finally work, when will the part payments cease and when will farmers be paid in full—on the due date—what they are entitled to? Will the cabinet secretary apologise in advance to our farming community for next year’s anticipated failure to deliver their agreed entitlements in full and on time?

I believe that most farmers and crofters welcome the loans scheme as a pragmatic solution to a problem that arises, as problems do in life. I am sorry that we have not been able to make all the payments on time. Of course I am, and I have made that absolutely clear. That remains the case and I have never tried to shirk or get away from that in any way whatsoever. However, I think that if someone receives £90 in November as opposed to £100 in January, that is a pragmatic solution; it is not perfect, but it is a pragmatic solution. I have said that the time schedule for basic payments is that 95.4 per cent have to be made by 30 June next year. I have committed to that timescale and I am confident that it will be met. We came close to meeting it last year and I am confident that we will meet it next year. However, in the interim, it is correct and prudent for me to say right at the beginning of this parliamentary term that we want certainty and clarity for farmers. That is why I have pre-announced a possible LFASS loans scheme, if it proves to be necessary.

By not making the online single application form mandatory and by offering support, including one-to-one assistance, the Government will significantly reduce the pressure on some of our farmers. Does the Government have any estimate of how many of our farmers it expects to help with that form of support?

We made significant progress last year on the number of applicants who submitted the SAF—the basic application form—online. From memory, I think that the figure is now 78 per cent, so the majority are using the online route. However, we want to do more, and we will be offering to those who require or wish them digital appointments—in other words, one-to-one sessions, probably in an RPID office where there are confidential office facilities. We will also be holding various briefing events on other aspects, such as land measurement and the process of transferring that measurement into a digital format, which is an extremely complicated process. As part of improved customer service, considerable effort will be made to help more farmers and crofters get online. I believe that that process will see a greater number using the online route this year. However, I did not think it right to make it compulsory and we are not doing so. Those who choose to make paper applications will continue to be able to use that route.

Could someone get a glass of water for the cabinet secretary, please? He has been reduced to stealing other people’s.

It is difficult to follow that, Presiding Officer.

Despite the cabinet secretary stating that the Scottish Government has

“taken on board the many criticisms and comments that have been levelled at our IT system”,

it seems that the solution being proposed today is simply to pour more money into an existing IT system that has so far failed. Can the cabinet secretary tell us exactly how much more money will be spent on an IT system that has lost the trust of the farmers and crofters who have been so badly let down?

In response to Colin Smyth’s question, I would say that we have completed the capital budget for the futures programme and that we are now in the process of annual maintenance and remediation, which is part of the normal process of any IT system. In other words, there are always costs post completion of the original capital expenditure budget for any IT system. We have been over that several times with the Rural Economy and Connectivity Committee. This year the budget for the total spend, which will include those matters and the online functions, is £10 million. I believe that that will be a substantial and positive investment in assisting many more applicants to do their applications online. There will be some benefits for them and for us, and I think that it will prove to be a good investment. Of course, it will be an investment for the period post-2019, whatever that future may hold. It is an asset for Scotland. The digitised map showing 55,000 land holdings and 4 million hectares of land is a great asset. The difficulty at the moment is that we have no idea what the UK Government proposes should be the support schemes following that date—if, indeed, it is proposing such schemes.

As the cabinet secretary said, LFASS payments are vital to farmers and crofters in rural areas, and he has already touched on the short-term plans. What is the long-term future of targeted support for the most fragile rural areas?

As I have made clear, this Government strongly believes that we must support our farmers to produce high-quality food and to be the custodians of our landscape in Scotland. Those things require support. The high standards of production must be maintained, as must regulation, if we are to access EU markets and for health and safety reasons. That is, in short, our aim. In particular, we are all concerned about hill farmers, and in places such as Lochaber in Kate Forbes’s constituency hill farmers will be the preponderance, so we are concerned that there should continue to be financial support for them.

I have held two summits—one in Lanark and one in Dingwall—at which I have met hill farmers and listened carefully to what they have to say. They are worried. It is not political; they are worried because they do not really know what the future will hold. That is why I pressed Michael Gove, at the short meeting that I had with him at the Royal Highland Show, to provide confirmation as soon as possible that the UK Government will continue to accept that payments such as those made under the LFASS play an essential part in the support system for farming and indeed for the countryside in Scotland as we know it.

I echo my colleagues in welcoming any assistance that brings stability to the rural sector. However, it is also clear that today’s statement is an early admission of the challenges and the failures that the Scottish Government is facing for the third year in a row with this disastrous CAP payment system. The question has been asked before, but could the cabinet secretary please inform Parliament how much the additional improvements to the IT system will cost and when payments will made accurately and on time, removing the need for all the mitigation and the loan systems?

As I said in response to Colin Smyth, the budget for the procurement of the futures IT programme has been completed. As I also mentioned, the commitment is to spend £10 million this year. I will double-check the record and will come back to Mr Carson if I have oversimplified things, because it is sometimes possible to err when quoting so many statistics, but that is my understanding. It is a good investment that needs to be made.

We are seeing considerable progress in the operation of the IT system. IT fixes have been made with more rapidity, and the number of problems that have arisen in respect of the IT process has substantially reduced. That is why I have expressed confidence in achieving the aims that we all want to see realised.

In his answer to Jackie Baillie, the cabinet secretary referred to the Audit Scotland report and the very high figures that it suggested for disallowance and penalties. Can he give any explanation for why Audit Scotland came out with figures that are so much higher than those that we have seen in practice?

That question is best addressed to Audit Scotland.