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SINGLE PAYMENTS – FRUSTRATION MOUNTS

 

The aim of this note is to give you as full and frank an analysis of the position as at 9am 30 March 2006. It is for our members, their landlords, lenders and suppliers.

 

For ease, it is broken down into sections

 

Progress on payments

Action being taken to speed things up

Other action to ease the situation

Advice to members

NFU comment

NFU action

Postcript - the latest RPA processing error

 

 

Progress on payments

 

The latest news is:

 

           as of close on 28 March, 27,862 claimants had been paid some £206million –  that is 23.4% of total claimants but only 12.64% of the total payments due. For a breakdown of payment progress since the outset, click here [hyperlink to RW’s 2006 Payment Progress].

 

           that represents an improvement in the rate of payments since the new CEO took over at the RPA. £119m of payments were made in the 7 days up to 29 March. But it is – in reality – simply a part-clearing of the backlog of claims that had already been passed through for authorisation after being fully validated (the £300m that Margaret Beckett talked about at the NFU conference on 27 February).

 

           the real issue is the validation stage. As things stand, claims cannot be passed for payment until they are fully validated. This is where the real processing logjam is and where the RPA is looking to intervene quite fundamentally (see Action being taken section below).

 

           Some 15,500 of you who received unvalidated entitlement statements should soon be receiving a revised, validated statement. That means your claim can be passed through to the final authorisation for payment stage. Once authorised, you will then receive a payment statement followed by a remittance advice. Then payment will be made. There is a time lag between these stages, but at least, once you have a validated statement, you know that payment is in the pipeline.

 

            Ministers and the RPA will not make any forecasts about how much will be paid out by when. It is clear that until the hold-ups in the main validation stage are sorted out, progress will remain painfully slow. But even a superficial analysis of the figures shows that if the £119m a week rate were to continue, it would take 12 weeks to pay out the full pot of £1.6bn. That would take us up to late June.

 

 

Action being taken to speed things up

 

The RPA is:

 

            removing four of the six disproportionate checks from the payment authorisation system to speed up the flow of payments once claims are validated

 

            increasing the area discrepancy tolerance in the validation process to 2% or 3ha, whichever is lower

 

            stopping over-pedantic quality checks so that staff can concentrate on processing claims

 

            prioritising work on the validation of claims that will release the maximum value rather than the maximum number of claims – this will mainly benefit middle size claims (see NFU Comment below)

 

            centralising key mapping work at the Reading office

 

            bringing the external contractors doing mapping work into the same offices as those staff processing claims, so that communication is improved

 

           where mapping correspondence is outstanding, making payments on the latest information held

 

           moving to a customer rather than task-based approach – this means that a single person will be able to deal with your individual claim and contact you to go through outstanding issues (see Advice to members below)

           

The last of these changes is expected to slow down the rate of validation temporarily, as the shift from task-based processing will require some IT adjustments and additional training.

 

Other action to ease the situation

 

 

           Lord Bach is expected to announce an extension of the deadline for entitlement transfers today (we will confirm this on NFUonline as soon as possible)

 

            Meanwhile, FVP growers are being sent a further entitlement statement showing their authorisation position – this is not absolutely final and most of the underlying entitlements will still be classified as ‘unvalidated’, but it should give a clearer idea of how many authorisations you have qualified for

 

            DEFRA & the RPA are seriously considering the possibility of part payments – they are looking at different models and devoting resources to ensure that the IT capability is there (see NFU Comment below)

 

            Serious consideration is being given to extending the window for 2006 SPS applications until to 9 June without the 1% per working day penalty (see NFU Comment below)

           Further investigation into the digital mapping system, followed by a technical briefing next week – it is far from clear whether the initial review has got to the bottom of the mapping problem

 

Advice to members

 

The shift from a task-based system to a customer-based one is fundamental and should go part way to helping get claims through the validation process. Essentially what it means is that a single person at the RPA will be looking at your SPS claim in its entirety, rather than covering just one element of it before passing it on to the next processor in the chain.

 

You may well receive a telephone call from that processor. Their aim will be to try to bring things together and clear up outstanding points. They may well be missing information which you have already provided (and which is now somewhere else in the system but not easily traceable).

 

This will be extremely frustrating and you will probably feel like venting your frustration on the person who is calling you. Do try to keep calm. RPA staff are there to process your claim and any information or clarification you can provide is absolutely vital to getting it through and passed for payment.

 

So,

 

            Provide information requested as soon as possible – the person dealing with your claim will give you their contact details

 

           Make a note of the information you gave and any further information you need to provide

 

            Confirm what you said by e-mail or in writing where possible

 

           If you supply documents by post, do ensure you get proof of posting

 

           Please do try to remain courteous – any concerns about service or maladministration should be raised separately through the RPA complaints procedure

 

 

NFU Comment

 

It goes without saying that this is all deeply depressing and totally unacceptable.

 

In particular:

 

          we are insisting that a mechanism for part-payment is put in place. We understand the government’s preference for full payments and that part payments would take a significant amount of time to get through the system. We need to know what that time lag is.

 

           in terms of the possible models for part payments, the NFU’s preference would be for a high percentage of the historic element of claims to be paid. The advantage of this is that a) history has already been validated and notified b) it is not linked to validated land areas or finalised maps and c) it is less risky for the government than paying on unvalidated land areas.

 

           If the RPA is going to priorities a middle size claims, it must as a matter of urgency make a clear announcement about what ‘middle size’ means so that those whose claims are not going to be prioritised know that. This is high priority.

 

            DEFRA must act quickly to announce an extension to the 2006 SPS application window, allowing late submissions without penalty until 9 June at the earliest for claimants who have unvalidated claims/outstanding issues. This will give both the RPA and our members at least some additional time to get claims validated and mapping sorted out.

 

           Right now, it is payments we want to see roll, rather than heads. There will be time for culpability to be apportioned in due course.

 

Meanwhile, fundamental questions about implementation so far remain. These have been put, but without expecting immediate answers. They will be pursued in due course as part of the post-mortem into the fiasco. Examples are:

 

           what are now considered ‘disproportionate’ checks have been removed from the payment authorisation process – if they were disproportionate, why on earth were they there in the first place?

 

           given the extent of the problems now acknowledged, there must surely have been unmissable indications of the inadequacy of the system well ahead of 14 March, when Johnston McNeill admitted to Ministers that the RPA would be unable to deliver most payments by the end of March.

 

           why did DEFRA wait until one working day before the transfer deadline before announcing an extension? The NFU and others had been calling for that since it became clear the entitlement establishment deadline of 31 December would be missed. Most farmers will already have gone through the stress of trying to get forms, make arrangements with other parties and agree terms. It is simply bad government to extend at this late date.

 

 

NFU Action

 

The Deputy President sent letters to main institutional landlords asking for an understanding approach on rent payments that are due. The replies we have received are encouraging and the main message is for tenants to talk to their landlords rather than simply ignoring rent demands/ notices to pay and hoping no action will be taken.

 

The Parliamentary team has circulated detailed briefings to MPs and peers about the NFU’s concerns and priorities. These have been reflected in parliamentary questions and the commons debate held yesterday in Westminster Hall. We expect the same to happen in this afternoon’s House of Lords debate.

 

Senior NFU staff and are in daily contact with their counterparts at DEFRA and the RPA, feeding into discussions and pressing for clarity.

Regional Advisers are running a roadshow meetings for members, providing updates on the 2005 position and advice in relation to 2006 claims.

 

The Legal Affairs team have assisted and advised members with complaints to the Parliamentary Ombudsman about, in particular, digital mapping. We are seeking Counsel’s opinion on possible causes of action open to members whose maps have not been finalised.

 

It has now become clear that the UK has not obtained a formal derogation from the Commission to cover its failure to definitively establish entitlements by 31 December 2005. Anyone may lodge a formal complaint with the Commission against a Member State which fails to implement Community law. The NFU legal team assist members who wish to make a complaint.

 

Postscript – the latest RPA processing error

 

Not for the fainthearted.

 

During the last RPA meeting with its stakeholders the RPA announced that there has been an ‘issue’  with entitlement identifier numbers.

 

It turns out that there are two different 'unique' identifier numbers being shown for blocks of entitlements, one on the Entitlement Statements and the other on the 2006 SPS Application form (part E of the SP5).  There appear to be two linked numbers for each block of entitlements, one with 7 digits (intended for internal RPA use only) and one with 8 digits (external farmer use).  The 7 digit identifier is shown on the Entitlement Statement (and in error) and the 8 digit identifier linked to it is shown on the 2006 SP5 form. 

 

The RPA has said that it will accept either of the numbers in connection with an SPS application or a transfer.  It has amended the covering letter going out with the remaining batches of 2006 SPS application forms to point out this issue.  Revised Entitlement Statements (previously unvalidated) will indicate the correct 8 digit code.  The NFU stated, this was a classic mess and should be highlighted on the RPA website

 

NFU Comment

 

If this were the only processing error to come to light as part of SPS delivery, it could be put down to a one-off misunderstanding or computer glitch. As it is, it is symptomatic of the appalling lack of operational management.

 

To murder a line from a much loved Sting number - every little thing it does is tragic.

 

National Farmers’ Union

30 March 2005