Departmental Restructuring (Hansard, 24 July 2000)

§ Mr. Nick Brown

I have decided to make a number of important changes to the way MAFF operates in the regions, in order to improve the services we offer to farmers and to strengthen the contribution we make to the wider rural economy. We will participate fully in the Government Offices for the Regions, strengthening MAFF's regional policy capability; we will set up new organisational structures to enhance the delivery of rural 473W development policies; and we will invest up to £130 million over the next spending period to modernise the way we administer CAP schemes, taking full advantage of the benefits of electronic services delivery.

I have given careful consideration to the findings of a detailed study of methods of delivering CAP payments, submitted at the beginning of this year by PricewaterhouseCoopers. I have concluded that the interests of farmers, traders and taxpayers would best be served by the creation of a new CAP Payments Agency, merging the paying agency functions of MAFF's nine Regional Service Centres and the Intervention Board to provide top quality customer service using modern electronic systems. Farmers and traders will benefit from a reduction in "red tape" and more efficient and rapid processing of payments, with the achievement of 95 per cent. electronic service delivery capability by March 2004. There will be significant benefits for taxpayers, with a 10 per cent. cut by March 2004 in unit costs of administering payments and further savings in subsequent years after the new Agency is fully established.

I have written today to the main organisations representing farmers and traders to explain how the Agency will work, and to seek their views on the best ways of ensuring a smooth transition to the new arrangements. We will work very closely with our customers to help them reap the benefits which electronic service delivery offers. However we recognise that many farmers are apprehensive about changes in the way their claims are handled and will maintain arrangements for face-to-face local contacts with farmers, at least until the new IT systems are fully operational and everyone has easy local access to the internet.

The Agency will be constituted as an executive agency of the Ministry of Agriculture, Fisheries and Food and will therefore be answerable to me. It will continue to administer the schemes currently operated by the Intervention Board in all parts of the UK and the devolved administrations will therefore be represented on its Ownership Board. It will operate from five sites, with its headquarters at Reading and other sites at Carlisle, Exeter, Newcastle and Northallerton. The work that will transfer to the new Agency currently accounts for some 80 per cent. of the 2,000 staff in the Regional Service Centres and nearly all the Intervention Board's 1,350 staff. By the time the new systems are fully operational (2004) we estimate that the total number of staff required will fall to around 1,950. We will make every effort to find suitable alternative employment for staff who are no longer required as a result of the modernisation programme.

I have also been reviewing other aspects of MAFF's organisation in the regions in the light of the Modernising Government initiative and the recent PIU reports "Rural Economies" and "Reaching Out". It is now right to establish greater integration of MAFF's strategic and policy activities in the regions with Government Offices. I am therefore preparing to provide a senior member of MAFF staff, with appropriate support, to join each Government Office. This will help strengthen the rural capability of the Government Offices and improve their links with my Department. And it will foster closer relationships with regional stakeholders, including the agriculture, fisheries and food industries, and their 474W representatives, regional institutions such as the Regional Development Agencies, and representatives of rural and environmental interests.

Parallel to the integration with Government Offices, I have decided to restructure the work currently carried out in the Farming and Rural Conservation Agency (FRCA) and the non-CAP payment functions of the Regional Service Centres. We will create a single, nationally managed but largely regionally based service to carry out this work. The service will be set up so that it relates effectively to Government Offices. Its staff will be located throughout England and will continue to provide a local service on the ERDP schemes.

We will build on the considerable skills of staff in FRCA and the Regional Service Centres to create the new service as a centre of excellence for the delivery of rural development polices and programmes, particularly one of MAFF's flagship policies—the England Rural Development Programme (ERDP). It will provide continuing employment opportunities for some of the staff at the RSCs which are not in CAPPA locations (Bristol, Cambridge, Crewe, Nottingham and Worcester) as well as for FRCA staff.

I would expect to review these organisational arrangements in 2003 at the end of the mid-term evaluation of the ERDP, and to consider at that stage whether full integration with the Government Offices would be sensible.

The decision to implement this comprehensive programme of changes is a further element in my Department's commitment to delivering efficient and responsive modern public services. The new CAP Payments Agency will ensure that service standards to farmers and traders are second to none. And agriculture and the wider rural economy will benefit through the strengthening of MAFF's regional policy presence.

I recognise that these decisions will create considerable uncertainty for staff in my Department's Regional Service Centres and at the Intervention board who have worked hard to provide good services to their customers. I have met the Trade Unions to discuss the position, and to assure them that I am committed to ensuring that everyone is treated fairly and sensitively as we take the change programme forward.