Government cost farmers £22.5 million, says NAO

News Article - 18 October 2006
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The National Audit Office (NAO) has accused the British government of making mistakes with its agricultural payments system, costing farmers in the country £22.5 million.

In a report about the Rural Payments Agency, the watchdog found that arrangement fees and additional interest on loans made up the costs.

The NAO also discovered a number of recorded management errors which had left thousands of farmers without payment for prolonged periods of time.

A spokesperson for the Department for Environment, Food and Rural Affairs told the BBC that they were aware of the issues and were committed to resolving any problems.

Some 79 underpayments and 39 overpayments were identified in 363 claims tested by the NAO.

The scheme aimed to make 96 per cent of payments to farmers by March, however by the end of the month only 15 per cent had been paid. By the end of June, 95 per cent of payments had been processed.

Implementation of the system was estimated to cost around £76 million but by March had reached £122 million, with further costs predicted.

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