“the largest capital grant scheme ever run by the Department of Agriculture”

The BBC’s Martin Cassidy notes the NI Audit Office report into the Farm Nutrient Management Scheme, through which some 4000 farmers received grants worth £121million – the largest capital grant scheme ever run by the Department of Agriculture.

When, in June 2007, the NI Finance Department gave its formal approval to extend the scheme to provide grant aid to all applications received before 31 March 2006, they had raised concerns about the affordability of the scheme.  One of the conditions of the formal approval was that [from the NIAO report]

“most importantly” the affordability issue in relation to the additional resources had to be satisfactorily resolved before any commitment to funding could be made. (This would be the subject of separate correspondence between the DARD and DFP Accounting Officers)

As the BBC reports,

The Department of Agriculture then came up with a plan to sell off the 84-acre plant testing station at Crossnacreevy on the outskirts of Belfast and use the money to boost the grant rate to 60%.

To do that it needed approval from the Department of Finance and Personnel which it provided with an informal valuation suggesting that with planning permission, the Crossnacreevy site was worth more than £200m.

The Department of Finance and Personnel was persuaded to provide the capital cover needed and gave the Department of Agriculture approval to increase the grant rate to farmers.

The Audit Office report said the persuasive point for the Department of Finance was that the £200m capital receipt was considerably larger than the Department of Agriculture was seeking approval to utilise in the farm nutrient management scheme.

The informal valuation though, turned out to be wide of the mark.

An official valuation by Land and Property Services in March 2008 judged the Crossnacreevy site to be worth a maximum of £5.8m and possibly as little as £2.28m.

The report by Land and Property Services also highlighted relocation costs of £6m associated with moving the plant testing operation to another site.

That “informal valuation” was made in June 2007.  The site remains unsold.

Additionally, as the NIAO report points out,

3.6 In the four weeks from the launch of the scheme on 26 January 2005 to 1 March 2005, a total of 11,191 preliminary applications (or ‘expressions of interest’) were received by DARD.  This represented some 40% of farm businesses in Northern Ireland.  Under the Department’s timetable, those that submitted preliminary applications had a further nine months to submit a full application.  However in October 2005, DARD extended the closing date for full applications to 31 March 2006, due to the low uptake.  By the original closing date of 30 November 2005, the Department had received only 372 full applications.  we asked the Department whether it had obtained EC approval to set or extend the closing date for the submission of full applications.  It told us that there was no need to do so as the EC was kept fully aware of its actions throughout.

3.7  By the revised March 2006 deadline, a total of 4,899 full applications had been received, 3,498 (or 70%) of which were submitted in the final three weeks. 

The NI Audit Office report contains other criticisms of the scheme.  Here’s an interesting comparison with similar schemes in England & Wales, Scotland and the Republic of Ireland.

And on the administration and impact of the scheme

4.29 There are a number of issues arising from the administration and impact of the scheme.

The Department cannot, at present, measure the extent to which FNMS has contributed towards improved water quality – it will take some time before the restrictions placed on farmers work through to improvements in water quality.

No milestones or targets were set to measure the success of the scheme –  before FNMS was launched, the Department did not agree a set of clear outcome measures and SMART targets defining what the scheme was intended to achieve.  One reason for this weakness was the absence of accurate baseline data of storage facilities on farms.

One of the main disadvantages of the scheme was its arbitary access – it is of concern that only those farmers who could afford to pay the difference between the cost of the work and the grant available were the ones who proceeded.

The average grant claimed was more than twice that projected in the Economic Appraisal – the consultants estimated that, on average, farmers would apply for a grant of around £13,600 but, following the settlement of claims, the average grant paid was £31,000.

Some 38% of planned farm inspections carried out by NIEA during 2009 detected at least one breach of the Nitrates Action Programme – NIEA carried out some 370 planned farm inspections during 2009 of which 141 were found to have breached the regulations.  In addition, another 84 farms were found to be in breach of the regulations following a complaint from other farmers, agencies or the general public.

In 2009, breaches of the Nitrates Action Programme were considered serious enough for NIEA to decide to prosecute three farmers – in 2009, 156 breaches were given a ‘high’ or ‘medium’ severity rating by NIEA, with three cases going forward for prosecution.

Cross Compliance penalties have been imposed on an increasing number of farms over the last three years – in 2007, 11 farms attracted Cross Compliance penalties of £1,375 for the pollution of waters caused by nitrates from agricultural sources, with this rising to 200 farms and penalties of £278,610 in 2009.

Changes to the Cross Compliance framework and a phasing in of Action Programme measures resulted in an increased level of penalty being applied in 2009.

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  • joeCanuck

    “wide of the mark” is an incredible understatement.

  • thethoughtfulone

    The only positive thing about this is that giving farmers money for such schemes is injecting it straight into the local economy ina way that no other industry will. Not only does it employ local labour but, with the exception of a bit of steel for reinforcing, all the materials used are also local.

    So at least the money wasn’t wasted but again an absolutely atrocious piece of money management by the Department of Agriculture. Sometimes I think the direct rule ministers were probably more accountable to the public for their actions than our own home spun versions.

    I mean, how incompotent do you need to be to get the shove. Some of our ministers have tried pretty hard to find the limits but still they remain.

  • aquifer

    “an informal valuation suggesting that with planning permission, the Crossnacreevy site was worth more than £200m”

    Who makes £200m or even £121m decisions on the back of an informal valuation.

    That kind of money would reduce corporation tax to ROI levels, but we shovel it out to farmers instead, presumably because they will vote DUP.

    And you thought it was illegal to buy votes.

  • Cynic2

    I assume that the mad valuation of Crossnacreevy was based upon it being sold for housing?

    Had any planning applications for housing in the area been granted or turned down?

    Who would have stood to benefit had the whole area been rezoned for housing?

    Who in the two Departments was pushing / suggesting this deal?

    Who rushed it through at over 40 times the true value of the site

  • PaulT

    Good to see Slugger point its guns at the DUP for a change.

    “The Audit Office report said the persuasive point for the Department of Finance was that the £200m capital receipt was considerably larger than the Department of Agriculture was seeking approval to utilise in the farm nutrient management scheme.

    The informal valuation though, turned out to be wide of the mark.”

    Yet another department held by a unionist commits a massive error, but at least he’s better with money than the UUP in Health.

    Guessing Sammy was better with money in his previous life and made sure he got “more bang for his buck” with his purchases back than…..

  • Pete Baker

    thoughtful

    Yeah, they threw money at the problem.

    But they didn’t bother trying to assess whether all that money was being used effectively.

    Nor did they identify where that money was coming from. Or, rather, they mis-identified where it could come from.

    PaulT

    DFP are implicated in that they do seem to have swallowed the “informal evaluation” for the sale of the Crossnacreevy site.

    But whose “informal evaluation” was it?

  • iluvni

    I assume no-one can be held responsible, no stone will be left unturned, there will be an external investigation, and lessons will be learned and..and…

    Anyone done a running total on the millions wasted during the life of this Executive?
    Has it reached £500m yet?

  • PaulT

    But whose “informal evaluation” was it?

    Briefly, many years ago, a very wide kid I worked with had a car pull up alongside him, guy inside was selling dress watches, he had a page from vogue showing an advert for them showing a retail price of a couple of hundred, bloke bought one cheap, got back to the office and discovered it was rubbish.

    numpty who handed over cash for a rubbish watch is the fool and the one at fault.

    Wilson was shown an OS map and told a piece of ground was worth 200m, he coughed up, later he’s told is worth 2.5m, only one not doing their job is Wilson.

    Labour and now the Tories, hoist this rubbish on the public everyday with stupidly priced PFI deals, smoke and mirrors appear to magic up billions while at the same time hide the credit card style repayments on the deal.

  • Cynic2

    “Wilson was shown an OS map ”

    It wasnt Wilson – it was Robinson.

  • Pete Baker

    It was the DFP Accounting Officer.

  • Cynic2

    Hes the fall guy.

    I am surprised that the then Finance Minister didn’t have a shrewd idea of land values in his own constituency

    By the way, who was the Accounting Officer in DFP at the time?