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NATIONAL AUDIT OFFICE
PRESS NOTICE

THIS STATEMENT IS NOT FOR PUBLICATION OR BROADCAST BEFORE  00.01 HOURS ON WEDNESDAY 2 FEBRUARY 2005

HC 184       2004-2005
Report by the Comptroller and Auditor General

Foot and Mouth: Applying the Lessons
Sir John Bourn, head of the National Audit Office, reported today on the progress made by the Department for Environment, Food and Rural Affairs (Defra) in implementing recommendations made by the Committee of Public Accounts following the 2001 outbreak of Foot and Mouth Disease.  Good progress has been made on most of the recommendations made by the Committee but some key areas remain where further work is needed.

Foot and Mouth Disease is still common in many areas of the world and high levels of international trade and travel mean that another outbreak is possible at any time.  The Department has taken steps to reduce the risk of the virus entering the country through illegal meat imports, to prevent livestock from coming into contact with the virus, and to slow the potential initial spread of infection by improved farm biosecurity and restrictions on the movements of animals.  The Department has also taken steps to put in place sufficient veterinary resources to deal quickly with a sizeable outbreak, and has negotiated with over 200 contractors for the supply of essential services at agreed prices.  It has not, however, finished work to upgrade its computer systems to help manage an outbreak.

The Department has improved its capacity to deal with future outbreaks of livestock diseases and its contingency plan is one of the best available, and has been the subject of wide consultation with the farming industry, local authorities and other rural interest groups.  The plan is, however, relevant mainly to central government and more work is needed to engage with local authorities and others to facilitate a co-ordinated and co-operative approach should another outbreak arise.

European Union policy requires the rapid cull of all animals in an infected place and of animals in dangerous contact with the virus.  Animals on neighbouring (contiguous) premises will be culled where a possible route of infection is identified by veterinarians or if initial efforts to control the epidemic are unsuccessful.  Scientific opinion on the relative effectiveness of vaccination and cull of contiguous premises remains divided, and Defra has commissioned further studies using improved computer models. Defra has significantly increased its stock of vaccines and in future will be able to begin vaccination within five days of an outbreak – but the decision to vaccinate would have to be taken in the face of many uncertainties.

The European Commission generally reimburses 60 per cent of a Member State’s eligible expenditure on controlling livestock epidemics.  However, the Commission concluded that UK culled animals were valued at between two and three times the Commission’s assessment of the likely market value, and other costs incurred in 2001 were significantly higher than necessary. As a result, the Commission has agreed to reimburse some £350 million – approximately one-third of the Department’s initial claim for £960 million.

Defra has consulted on a new compensation scheme for all animal diseases which would apply standard rates based on average market values prior to an outbreak. In the meantime, Defra has drawn up a list of 280 approved valuers and any who give significant cause for concern will be removed from the approved list.  It has also improved its guidance to valuers but decided not to provide benchmark valuations as a guide to valuers. The Department is still considering proposals to share the cost of an outbreak with the farming industry.

The Department has paid 97 per cent of invoices totalling some £1.3 billion submitted by contractors since 2001 but has not agreed a final settlement with 57 contractors pending the results of its investigations. A number of cases are awaiting legal action.  The first cases to be tested in court were heard during 2003 with the first judgement in January 2004. Nine cases are now in the High Court and one case is the subject of ongoing Police investigation. A further case has been referred to the Special Compliance Office of the Inland Revenue.

Sir John Bourn said today:
“The 2001 outbreak of Foot and Mouth Disease was devastating not only for many farmers but also for the wider rural community.  Continued vigilance is therefore essential.  Defra is now much better prepared than in 2001, but still has work to complete, for example to develop a new compensation system for culled animals; to determine how the costs of controlling future livestock disease outbreaks should be borne; to link its central government contingency plans with those of local agencies; and to update Information Technology support for future disease outbreaks.”

Notes for Editors

  1. Foot and mouth disease was confirmed at an abattoir in Essex on 20 February 2001. By the time the disease had been eradicated in September 2001, more than 6 million animals had been slaughtered: over 4 million for disease control purposes and over 2 million for welfare reasons.
  2. The Treasury has estimated that the net economic effect of the outbreak was less than 0.2% of gross domestic product (less than £2 billion) because expenditure was diverted elsewhere in the economy.
  3. Following the three inquiries into the outbreak by the Royal Society, Dr Iain Anderson (Lessons to be Learned enquiry) and the National Audit Office, the Department prepared a full response followed by a detailed action plan or “Route Map” in November 2002.
  4. Following the report by the House of Commons Committee of Public Accounts in March 2003, the Department also prepared a Treasury Minute which sets out the Government’s detailed response to the Committee’s main findings and recommendations.
  5. Press notices and reports are available from the date of publication on the NAO website at www.nao.org.uk.  Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  6. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff.  He and the NAO are totally independent of Government.  He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

Press Notice 11/05