Complex IT raises rural payments costs, says NAO
Kable
Published: 16 Oct 2009 14:40 BST
Complex IT systems have contributed to the high cost of administering government subsidies to farmers, according to a report from the National Audit Office.
In a report on the EU Single Payment Scheme, the NAO said the Rural Payments Agency spends £1,743 on administering each claim compared with just £285 in Scotland.
It said little has been achieved by either the Department for the Environment, Food and Rural Affairs (Defra) or the agency to reduce the dependency on IT systems that are contributing to the high cost of administration.
The NAO estimates that IT costs, including recovery work, maintenance, upgrades in response to policy and other changes, were £130m between April 2007 and March 2009. In addition, heavy customisation has resulted in complex software which is expensive to modify and maintain, and has increased the risk of obsolescence.
Any further upgrades in response to policy initiatives from the European Commission will be expensive to implement. About a third of the changes made to the finance system have been "invasive", and needed changes to the source code.
"The degree of changes to the system has created other problems," said the NAO. "The involvement of agency staff in the original implementation of the system blurred responsibilities with its contractors, leading to a lack of clarity over who is liable if the system goes wrong."
The agency depends heavily on external IT support and more than 100 IT contractors are based permanently in its offices. "This dependence, combined with the need to renew the support contracts quickly, and the difficulty in finding other potential contractors who could support the bespoke systems, will undermine the agency's ability to get value for money," said the NAO.
Alternative approaches have been hindered by the inexperience of the agency's senior management team and problems in accurately assessing progress.
This is the NAO's third review of the Single Payment Scheme, and it says its earlier recommendations and those of the Public Accounts Committee have not been properly addressed. In particular it points to poor progress in aligning the design of the scheme's systems to operational needs, which has hindered efficient administration.
Amyas Morse, head of the NAO, criticised the failure to protect taxpayers' interests and the lack of management ownership of the scheme in either Defra or the Rural Payments Agency.
"Defra should urgently address the risks to ongoing IT system support and the inaccuracy of the scheme's data, explore alternative payment systems and resolve the ongoing management issues," he said.
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