The failure of the UK Rural Payments Agency's IT project to implement the Single Payments Scheme (SPS) to farmers followed 21 major policy changes to the program, MPs have been told.
The huge IT project to implement the SPS – which consolidates 11 separate European Union (EU) subsidies – descended into chaos, leaving farmers out of pocket by up to £22.5 million. The cost to the agriculture ministry Defra has run into hundreds of millions of pounds, while only £7.5 million of £164 million planned savings has materialised.
Former RPA chief executive Johnston McNeill, who lost his job following the fiasco, told the Commons public accounts committee that until the 11th hour staff had tried to hit the end of March 2006 payments deadline but had been unable to do so.
He told MPs the implementation had always been a very high-risk affair, with a more complex payments system adopted in England than those used in Scotland, Northern Ireland or Wales, and a departmental reorganisation taking place at the same time.
"You have heard permanent secretaries talking openly about 40% confidence levels," McNeill said. "We reported to the department that this was extremely high risk."
The situation was made worse by the 21 policy changes, which continued through the IT implementation. These changes had not been required under the simpler schemes in Scotland Wales and Northern Ireland, McNeill confirmed.
A fundamental problem was the "task-based" approach to processing farmers' claims, which "caused significant problems all the way through", he told the MPs.
The RPA did not have previous experience of using a task-based approach to farm payments processes. "It was the first time we'd operated a brand new scheme, on a brand new system, using a brand new technique," he said.
The committee – who referred to the fiasco as a "train crash" – pressed McNeill over why he had not come out and said the implementation would not be possible by the deadline.
In response, the former RPA chief said IT contractor Accenture had said the scheme could be carried out, as had RPA staff – although they described the situation as "hellish".
"We never came to a position where Accenture or anyone else involved... said this is no longer deliverable," McNeill said.
"We said it could be done but it was extremely high risk and it would be much safer with a less complex scheme," he added.
He also pointed to reports made to the Department of the Environment, Food and Rural Affairs, showing a series of 16 successive "red light" warnings over the viability of the programme.
But McNeill also suggested that he was not able to stop the scheme: "The general line was, this had to be delivered."
McNeill eventually raised concerns in a letter to ministers on 10 March 2006. It had become apparent that problems with the speed of the validation process meant "we couldn't get payments through the system fast enough," McNeill told the committee.
But the IT systems were now in use at the RPA, McNeill told the MPs. The RITA IT system, optical character recognition technology and document management systems were all in use this year, he said.
In a scathing report earlier this year, the Commons environment, food and rural affairs committee said former environment secretary Margaret Beckett and Sir Brian Bender, the former permanent secretary at Defra, should be held accountable for the SPS failure.
The committee heard that McNeill was set to receive a total of around £250,000 in wages paid while suspended, severance and pensions payments and a compensation payment of more than £60,000 from the civil service appeals board, which ruled he had been unfairly dismissed.