Scotland’s new rural affairs ministers will be faced with a mountainous task when they take up their posts following the departure of Richard Lochhead and the publication of a damning report in to the Scottish Government’s roll out of CAP support payments.
First Minster Nicola Sturgeon appointed Fergus Ewing as Cabinet Secretary for Rural Economy and Connectivity and Roseanna Cunningham as Cabinet Secretary for Environment, Climate Change and Land Reform during a Cabinet reshuffle on Wednesday.
Mr Lochhead announced his resignation the day before a report by Audit Scotland laid bare the failures of the Scottish Government’s beleaguered IT system which it said left a £400 million hole in the country’s rural economy.
Audit Scotland said the CAP Futures programme, which is estimated to have blown its budget from £108m to £178m, continued to have serious cost and operational issues and was unlikely to ever deliver value for money.
NFU Scotland called on the new ministers to ‘earn back the trust’ of the farming community and to guarantee there would be ’no repeat of the IT debacle’.
While Scottish farmers and crofters facing delayed Basic Payment Scheme (BPS) have been given a cash advance from the Scottish Government to help ease cashflow, thousands of 2015 claims have still not been processed.
Other work outstanding includes the completion of the regionalisation and mapping requirements; delivering outstanding balance payments to all applicants; settling claims to the national reserve and distributing funds under the new upland sheep scheme.
Last week Holyrood chiefs agreed to extend the deadline for 2016 support claims to June 15 due to issues with the mapping process.
Audit Scotland concluded that, with £126 million already spent, funds could run out before the IT system fully met European Commission regulations.
According to the auditor, non-compliance could lead to financial penalties of between £40m and £125m.
NFUS president Allan Bowie said the report showed how poorly producers had been served with the ‘unedifying prospect that the programme may never be fit for purpose’.
He called on the new Cabinet Secretary to ensure the system became compliant and was fully functional before the money ran out.
“The sad fact is that the scope of the programme has been reduced, removing all the planned benefits for farmers and crofters applying for support,” he added.
“At the same time, the budget has soared to an eye-watering level. That is an absolute disgrace and the public deserve a full explanation on just what has happened here.”
It is not yet known if the Scottish Government can meet the EU requirement to pay 95.25 per cent of support by June 30.
Deputy First Minister John Swinney said the Scottish Government remained focussed on distributing payments to farmers and crofters but added the complexity of the reforms had been challenging for everyone involved, ‘with slow payment timescales in other parts of the UK and Europe’.
Promising the government would learn lessons from the fiasco, Mr Swinney said the private contractor responsible for the IT system would be held ‘fully accountable’.
"We have made progress since Audit Scotland did their work for this report," said Mr Swinney.
"Around 80 per cent of first instalments have now been paid using the new system, which has been performing well during this year’s Single Application Form window. We have also made more than 16,000 nationally-funded payments to farmers and crofters as well as 7,000 support payments to beef producers.
“We need this new online system because the EU reforms demand it, not just for this year, but for the whole of this new CAP period.
"To get the costs in proportion, Rural Payments and Services will last for many years to come and deliver nearly £4 billion of support to our farming food and rural sectors over five years alone.
"That’s why we need this system, and that’s why we’re focused on ensuring it works.”