A DAMNING report on the rural payments service has been issued by the National Audit Office (NAO).

It says ineffective collaboration between the bodies responsible for delivering Common Agricultural Policy (CAP) payments undermined their ability to deliver a successful digital service this year.

The report said the Programme – a combined effort between Defra, the Rural Payments Agency, and the Government Digital Service (GDS) – focused largely on procuring IT systems and did not set out the wider organisational transformation required.

Numerous changes in leadership also caused problems: "There were four senior responsible owners within the space of a year, each bringing their own style and priorities. Repeated changes were disruptive to the Programme and caused uncertainty and confusion for its staff.

"The department failed to prevent counterproductive behaviours, with deep rifts in working relationships and inappropriate behaviour at the senior leadership level at many stages of the Programme’s three-year history."

GDS did not provide the support Defra needed – its support was "patchy" with limited continuity in personnel.

Defra expected farmers would register using it’s identity assurance system, Verify, from October 2014 – but it was not ready and no alternative was initially put in place.

The report said: "The vast majority of customers, therefore, registered using the RPA’s existing process, supported by drop-in centres and the RPA’s telephone helpline.

"In March 2015, in response to serious failings of the system, the online application system was withdrawn and replaced by 'paper-assisted digital' applications for the 2015 scheme.

"This was a speedy and effective change to the Programme that has increased the likelihood that the majority of farmers will receive their basic payment scheme (BPS) payments in December."

Amyas Morse, head of the NAO, said: "The Department, the RPA and Government Digital Service have not worked together effectively to deliver the Common Agricultural Policy Delivery Programme. There are serious lessons in this episode for all three.

"This means that costs have increased and systems functionality has not improved at the rate expected, either in the back office or the user-facing front end. This does not represent value for money.

"One consequence of this is that the Department faces difficulties paying farmers accurately and at the earliest opportunity. While the Department is now making progress towards its target of paying BPS claims for the majority of farmers in December, significant challenges remain."

Meg Hillier MP, chair of the Committee of Public Accounts, said: "The Common Agricultural Policy Delivery Programme will now cost far more, but deliver far less, than was originally planned, and incur millions of pounds worth of avoidable penalties.

"This is not a good deal for the taxpayer or for farmers.

"Defra and the Government Digital Service have repeatedly failed to get the basics right. There is no clear vision, numerous changes in direction and governance, poor leadership, and ineffective risk management."

Key facts:

o £215m budgeted cost of the CAP Delivery Programme in the September 2015 business case o 40 per cent increase in costs in the three years since the outline business case

o seven fundamental changes to the Programme that increased the level of innovation and risk

o £1.8bn average annual value of Common Agricultural Policy (CAP) payments in England, 2015 to 2020

o 105,000 payments to farmers expected every year

o 88,000 Basic Payment Scheme claims received from farmers and agents, mainly via drop-in centres and post

o £642m total disallowance penalties incurred in England since 2005

o four senior responsible owners for the CAP Delivery Programme between May 2014 and May 2015