The Rural Payments Agency (RPA) has admitted it will not achieve its target to pay subsidies owed to farmers under its Single Payment Scheme, due to ongoing IT problems.

Despite achieving its target to make payments to 85 percent of eligible claimants by the end of December 2010, agriculture minister Jim Paice said in a written parliamentary statement that the agency will not be reaching its second target to pay 95 percent of eligible payments by 31 March 2011. The targets were set by the previous Labour government.

“The estimated figure will be nearer to 90 percent,” said Paice.

“Given the complexity of the existing systems and the inadequacy of the IT systems, speeding up payments is not simply a matter of increasing resources. In the last six months some 140 ‘fixes’ have been made to the IT system, which now allows us to be more confident in the accuracy, but does not significantly speed up the process.”

But Paice said that the targets achieved last year were at the expense of accuracy, which has resulted in EU fines and a large backlog of cases where it is believed that overpayments or underpayments have been made.

Although the RPA Oversight Board, which Paice chairs, has decided to not chase error cases in the backlog where the farmer “could not reasonably have been expected to identify an error”, it said that a “substantial” number of the backlog of cases will still have to be checked for errors.  

“If the RPA is finally to put the legacy of chaos, errors and disallowances [fines] behind it, we need to ensure that payments made this year are based on accurate data so that we can move forward,” said Paice, who is keen to avoid further EU fines due to poor standards of accuracy.

For farmers who are unlikely to be paid under the system before 30 June, the RPA is considering making manually-validated payments. It will also consider making partial payments to farmers who have to wait for payments, as suggested by farming industry representatives.

Last year, the agency was heavily criticised for its highly flawed and “rushed” £350 million farmer subsidies system implementation, which led to incorrect payments being made. Each payment claim costs £1,700 to process, more than six times the cost of a similar scheme in Scotland.

The RPA’s system was built by a range of contractors including Accenture and Steria, with a number of Oracle-based systems heavily customised. An independent review, commissioned by the government, found that many of the systems were highly troubled.

There were major problems on the interface between RITA, the main system for claims processing, run by Accenture, and the Oregon finance system for making payments, run by Steria, even though both systems run around the same base of Oracle software.

Part of the problem was the rushed “re-customisation” of RITA in 2005, leading to a system that is fragmented, “does not conform to sound architectural principles” and is hard to upgrade, according to the review.