Farmers to finally get £1.5bn subsidy cash after IT woes

Government expresses "deep regret" over new payments system problems

Vital subsidy payments are finally starting to reach UK farmers following computer and administrative problems with the new Single Payment Scheme (SPS).

By the end of April, less than half of the £1.5bn of subsidies owed to farmers had been paid by the Rural Payments Agency (RPA).

The SPS was introduced following a 2003 reform of the way EU Common Agricultural Policy subsidies are handed out and the UK government developed a system that maps farmers land to a database.

The RPA has previously blamed the sheer complexity and size of the task of mapping 360,000 new parcels of land, rather than any specific IT problems, as the reason for delay in payments.

But incoming Department for Environment, Food and Rural Affairs (Defra) Secretary of State David Miliband - who took over from Margaret Beckett in the Prime Minister's cabinet reshuffle - claims more payments have now been made and that 85 per cent of the £1.5bn in subsidies will reach farmers' bank accounts over the next week.

Defra also claims that the vast majority of farmers - aside from a small number of complex cases - will have received either a full or partial SPS payment by 30 June 2006.

Miliband said in a statement to parliament: "I am acutely conscious of the difficulties endured so far, and the magnitude of the challenge that still lies ahead to complete delivery of the 2005 SPS scheme year. The fact that previous estimates of payment timetables were missed, and the problems this has caused for farmers up and down the country, are a matter of deep regret."

Miliband has also brought in business and IT consultant Tony Cooper to act as interim CEO of the RPA to replace current chief Mark Addison.