Rural IT disaster boss awarded annual bonus

The chief executive at the heart of a failed £350 million farmer subsidy system has been awarded a substantial bonus on top of his six-figure salary.

Tony Cooper, head of the Rural Payments Agency, was paid £134,000 in the last financial year, and awarded an additional £12,000 bonus. But MPs said that in his three years in the post he has so far failed to turn around the highly troubled IT system.

Other executives were paid even more, in an office with a quick management turnover. A temporary human resources director took home a salary of £460,000 over two years, and a finance director took £353,000 over a similar period. The existing chief operating officer earns around £260,000 annually.

In a damning report on the Single Payments Scheme, the powerful Committee of Public Accounts said money was being poured into the RPA’s IT systems at a rate that demonstrated “negligible attention” to taxpayers’ interests. The RPA, it said, needed to consider whether an alternative system would work better.

The systems, built by Accenture, were “cumbersome, overly complex and at risk of becoming obsolete” as some of the technology warranty agreements ran out, the PAC noted. The systems continue to “soak up huge sums of money”, it noted, yet the data they offered was full of errors.

Accenture was paid £84 million over the last two years. In questioning, PAC chairman Edward Leigh said in exasperation that the 100 consultants, working to maintain the system, constituted an “incredible” number considering the scheme only paid out to 106,000 farmers. The consultants earned on average over £200,000 a year.

Defra said progress was being made and acknowledged the task ahead. Accenture said it was only paid according to work delivered, at "market relevant" rates and that it had met changing requirements from the European Union, which provides the payments.

Leigh told the RPA in a hearing six weeks ago that it had bought “the most expensive, the most complex scheme you can possibly find”.

“You then pay the private sector oodles of taxpayers’ cash to try to sort it out and it goes on,” he said. “We might just as well divide up the £84 million and send [the farmers] all a cheque. It would be a lot cheaper and easier in the end.”

Severe problems with the systems, which handle the payment of European Union subsidies to farmers, have led to vastly incorrect payments being made. Efforts to recover overpayments have been “woefully slow” and “haphazard”, the PAC said, a move that was causing farmers a great deal of anxiety.

Each payment claim costs £1,700 to process, over six times the cost of a similar scheme in Scotland, the National Audit Office calculated in October. Yet the Department for Environment, Food and Rural Affairs, which houses the RPA, subsequently claimed the costs were £700 instead. Defra’s explanation of its costs was “unconvincing”, the PAC said.

"The truth is that the department has either not grasped the seriousness of what has been happening or been reluctant to face up to problems,” said Edward Leigh MP, chairman of the PAC.

The report said the RPA had demonstrated poor administration “on a grand scale” and Defra had been “complacent” in its oversight. Leigh called for the Departmental Accounting Officer to take personal responsibility for the scheme, to create an action plan, and to begin making detailed progress reports from next month.

Copyright © 2009 IDG Communications, Inc.

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