09:00 - 09 January 2004

Following yesterday's report on a farmer falsely accused of swindling compensation, London Editor Jason Groves reports on a Devon firm still owed money after the crisis

A Westcountry farming contractor is still owed £1.2 million for vital work carried out during the foot and mouth crisis - 1,000 days after the invoice was submitted.

The case of Luke Furse Earth Moving Ltd was raised in the Commons yesterday by MPs who are increasingly angry at the treatment of farmers and contractors by the Department of the Environment, Food and Rural Affairs.

The firm, based at Clawton, near Holsworthy, played a vital role in the massive operation to contain foot and mouth in the Westcountry during the 2001 crisis.

But almost three years on from the outbreak Defra is still withholding payment of £1.2 million owed to the firm.

Luke Furse Ltd carried out extensive work on behalf of Defra and its predecessor Maff during the 2001 foot and mouth crisis. The firm built more than 40 pyres for the disposal of carcasses in Devon, procured huge quantities of equipment and services and carried out exhaustive cleansing and disinfection work at hundreds of Devon farms that were slaughtered out. During this time the firm saw its workforce rise from a typical level of under 50 up to more than 300 at times.

Luke Furse, who founded the respected family firm 25 years ago, said he had been stunned when Defra began to refuse payment. He said the oldest unpaid invoice was now 1,000 days overdue.

Mr Furse said that although all payments had been agreed at the time his firm had been subjected to a barrage of questions and repeated audits as Government accountants attempted to chip away at the bill. Now the firm has been told that the Government has "lost" invoices totalling almost £500,000.

The company has been asked to copy and forward them again, despite having done so several times in the past.

Mr Furse said: "We feel absolutely distraught at the way we have been treated. Our company was dedicated to the cause. The Government could not have done the job without us and then they turn around and treat us like this.

"We are most certainly not going to back down. We have done the work, we have paid our suppliers and we should be paid."

Speaking in the Commons yesterday, Tory MP Henry Bellingham said Defra's treatment of many farmers and contractors was a "disgrace". Mr Bellingham, MP for North West Norfolk, said Defra had shown flagrant disregard for its own guidelines, which state that contractors should be paid within 30 days.

He added: "According to the Forum of Private Businesses there are still 350 contractors who helped solve the foot and mouth crisis who are still owed over £100 million. It is a staggering figure and includes Luke Furse Earth Moving Ltd, of Devon, who did a superb job and are owed £1.2 million. Luke Furse is a family-owned business which has spent £100,000 on legal fees and has been driven to despair.

"When are ministers going to play fair? When are they going to try and rebuild their credibility with the rural community? When are they going to actually follow their own rules and guidelines on the payment of bills."

Defra's own figures show that the department is withholding more than £55 million from farmers and contractors owed as a result of the disaster. The department also revealed that it had already spent £20 million investigating the validity of outstanding claims.

Rural Affairs Minister Alun Michael declined to comment on the case of Luke Furse Ltd. But he said the Government had a duty to protect the public purse and investigate claims.

"It is right for the Government to have all claims carefully examined," he said.

Mr Michael also refused to comment on the case of Devon farmer Michael Pedrick, who was cleared this week of trying to cheat MAFF out of nearly £17,000 following the foot and mouth crisis. Mr Pedrick, of Sheepwash, said he had been "put through hell" by Defra.

Lib-Dem rural affairs spokesman Andrew George called on Mr Michael to apologise. He told MPs that Defra's legal bill for bringing the case was believed to be over £100,000.

Shadow Countryside Minister James Gray waved a copy of yesterday's WMN, which detailed Mr Pedrick's case, in the Commons as he challenged Mr Michael over the issue.