« Previous | Contents | Next »
Listen
5 POSSIBLE SOLUTIONS
Ethos
5.1 A vital adjunct to an improved means of dealing with appeals is a concerted effort to avoid them occurring in the first place; thus we support the "prevention is better than cure" approach. Reinstatement of an ethos of openness and willingness to help at Area Office level so that officials, while continuing to properly perform their regulatory functions, are seen as providing a service to, rather than policing, their local agricultural community will help facilitate this preventative approach. We believe that this ethos must be adopted by staff of all grades within SGRPID so that a consistent customer-focused approach is embraced by all involved in the administration of subsidies. In our deliberations we recognise the important role that the local area office staff play in their communities and how fortunate Scotland is to have recruited and retained staff with considerable knowledge of the agricultural industries. In our view it is important that the knowledge base of those involved is recognised and put to good use in managing subsidy applications and in avoiding appeals when they may be prevented. This approach will only be possible if senior managers recognise and adopt this vision for the future. It is recognised that processes and procedures must be fully open to auditors from within Scotland and the EU but we consider that an excessive concern especially about the role of EU auditors has to date been one of the factors preventing reinstatement of this ethos.
5.2 Developing the theme of prevention being better than cure, there are simple things which could readily be done to help achieve that result. Although much thinking and effort already goes into the designing of application forms, we think more imagination could be shown so that (a) matters of particular importance, such as a change in the rules, or the rules containing a different definition of an agricultural term from what is normally understood by that term among the Scottish agricultural community (the definition of "heifer" in the recent "5 per cent heifer" cases 12 comes to mind), are properly and effectively highlighted and (b) errors are more readily identified as obvious errors. Even such simple things as rule and definition changes being highlighted in bright colours on the front page of applications would assist in this area.
5.3 The importance of good form design can be shown by a simple example. By the simple device of use, in application forms, of tick boxes which include "yes" and "no" options rather than a single box on which the whole application might depend, the Welsh have elided the difficulty as to whether failure to tick the box showing an intention to claim under the Less Favoured Area Support Scheme (" LFASS") is an obvious error (and therefore capable of correction without penalty in terms of the relevant rules): if there is a "yes" box and a "no" box the failure to tick either is an obvious error. In Scotland, where only one box was used, failure to tick that box has led to difficult questions as to whether that is an obvious error in LFASS cases. More generally, however, in this area, there may be something to be said for obtaining independent advice on the matter of form design.
5.4 Improvements in this area could also be informed by better use of the "S" check system which is used for electronically capturing data contained on claim forms. That process must throw up common errors which should be reported back to form designers with a view to such errors being eliminated in future. In fairness, we are not clear as to the extent to which this is already done but it is something which should obviously be exploited to full advantage.
5.5 Of course no amount of imaginative form design is going to solve the problem of the applicant who does not read the guidance but it is important that the matters which we have mentioned are highlighted effectively in that guidance. Something which could assist even these claimants, however, albeit to a limited extent, is the promotion of electronic submission of claim forms. That option presently exists and those who take it up have an advantage over those who complete their forms manually in that the computer will not accept forms which contain certain types of error or incomplete information. Thus the error is brought to the applicant's attention at the start and he can go no further until it has been corrected. More use of electronic submission would therefore lead to fewer problems down the line.
5.6 Although the idea originated in Scotland, Wales was also the source of another possible way of applying the "prevention is better than cure" philosophy. That is the use of a "Farm Liaison Team". This is a small team of troubleshooters who make themselves available to the farming community for the purpose of assisting with things such as explanation of the various aid schemes and scheme requirements. As well as being a constant presence at agricultural shows, markets and the like, they hold clinics throughout Wales and visit individual farmers on request. Officials we spoke to in Wales were unequivocally clear that the work of this team has reduced the number of appeals and representatives of Welsh farmers were unanimous in their praise for the service it provides.
5.7 Reasons for the idea never having been fully developed in Scotland included the perception that such efforts are not successful in reaching the people who really need help. It was always the "top 15%" of farmers, whose practice and procedures were already good, who came to such meetings, it was said; not the ones who either do not care or do not want to ask, or be seen to ask, for help. Nevertheless the senior official with whom we discussed the matter in Scotland expressed willingness to look at such a proposal and a determination that if the Welsh could make such a team work effectively so could we. We consider that this is an area where there will be ongoing work for such a team, given the complexity of cross-compliance requirements under the new aid regime.
5.8 In our introduction we mentioned a perception that rules are interpreted more flexibly in some jurisdictions than they are in Scotland and the other UK jurisdictions. This is an appropriate point at which to mention two examples of this perception.
5.9 One is the use of existing electronic data which can be accessed by the paying authority to make good the failure of an applicant to convey information to that authority.
5.10 This arose sharply in the "5 per cent heifer cases" 13 in which failure to intimate to SEERAD replacement animals for heifers which had calved (and so ceased to be heifers in terms of the definition of that term in the relevant rules) caused a significant number of applicants to fall foul of the rules. That such additional heifers were available was known to the UK payment authorities courtesy of the British Cattle Movement Service's (" BCMS") Cattle Tracing System and in many cases it was the fact that the farmer had registered the calving on that system which triggered the disallowance but payment authorities throughout the UK took the view that although information from the Cattle Tracing System was being used for one purpose (notification of beasts which had ceased to be heifers) it could not be used for another (confirmation of the existence of sufficient numbers of other heifers on the holding to take their place). The farmer was therefore not relieved of the consequences of his failure to intimate replacement animals. 14
5.11 The position in the Republic of Ireland 15 could hardly have been more different. There, the government in effect relieved farmers altogether of any requirement to intimate replacement animals and instead used its computer database to adjust animal categories so as to keep the claim within the scheme requirements. Thus where a heifer which was the subject of a claim calved, that fact was known to the Irish government once intimation of calving was made and the government then checked its records for an eligible replacement animal. If there were several such, it intimated the one it intended to use as a replacement to the farmer who then had 14 days within which to object and nominate another replacement. The system was used not only to select replacement animals but also to delete animals from the claim where that was required in order to keep the percentage of heifers below the 40% ceiling. Thus all the Irish claimant of SCP, or its equivalent, had to do was intimate the events which caused a change in the composition of the group of animals being claimed for, such as calving, sale or death (and very often even these occurrences were intimated on his behalf by vets, marts or people removing carcases of dead animals) and the officials of the Department of Agriculture, Fisheries and Food then did what was required to keep the claim within the rules.
5.12UK officials give two explanations for this difference of approach. One is that the BCMS Cattle Tracing System is not in some way (exactly how we never managed to ascertain) validated or accredited by the EU (whereas, presumably, the Irish system is). The other is that all that the BCMS system tells one is the whereabouts of a particular animal at a particular time, not who owns that animal; thus the system could show that additional heifers were on the farm but not that they belonged to that farmer.
5.13 These explanations are no doubt perfectly valid but they do beg the question why the UK is operating an electronic cattle movement system which is deficient in these respects. What would be really interesting to know, however, is whether UK payments authorities would in fact have taken the relevant information into account had it been available to them from a properly validated source or whether they would have withheld payment nevertheless on the view that the availability of the information from another source does not excuse the farmer's failure to comply with the scheme rules by providing that information himself which, on the view taken by these authorities and by the Land Court in the Stephen case 16, was to be regarded as a condition of eligibility under the relevant scheme.
5.14 Pondering that question throws up a fundamental attitudinal point in sharp relief. European rules may be hard but there is nothing wrong with a government doing all it can to help its farmers get things right. Europe's concern is that the money goes to those entitled to it. A government which does all it can to help its farmers keep within the rules is assisting that process, not subverting it. The point of the exercise is not to see how good farmers can be at form-filling, and to punish those who fall short, but to get the money to those for whom it is intended. The European Union's auditors' concerns, and those of the European Court of Justice, are with the prevention of fraud, not with putting unnecessary hurdles in the way of entitled claimants. Anyone tempted to think that what the Irish government was doing was in some way unfair, should therefore realise that a member state's active assistance of its farmers in making their claims and staying within the rules does not increase the risk of fraud, it minimises it.
5.15 The second example did not prove so well-founded on examination. It involved the double-tagging of cattle requirement and again the contrast was with the Republic of Ireland. Before 2006 it was the practice of SEERAD to regard the loss of both tags as a breach attracting a cross-compliance penalty. Since 2006 farmers have been given a period of 28 days to replace all missing tags discovered during inspection before such a penalty is triggered. That seems to be broadly in line with the Irish position.
5.16 The point of mentioning these matters is to show that some things are indeed done differently in other jurisdictions and that a payment agency trying to avoid unnecessary or unreasonable penalties ought always to consider whether there is scope for differing interpretations without running a risk of disallowance by Europe. Part of that process ought to involve scrutiny of how matters are dealt with in other member states and engagement with the European Commission as to what scope there may be for a more relaxed interpretation of the relevant rules.
5.17 On this matter we had the good fortune to be able to take the views of Sir John Grant, a Scot who was until recently the UK's Ambassador to the European Union. It was Sir John's view that Brussels was a "problem-solving place" but that there was a generic inability or reluctance on the part of UK officials to engage imaginatively and constructively with the organs of the EU with a view to seeing what room there might be for manoeuvre and what scope there is for a more purposive interpretation than the letter of the regulations might suggest.
5.18 We should emphasise that Sir John's comments were not made specifically in relation to the agricultural aid regime. They applied generally to the approach of UK officials (and lawyers in particular) across the range of involvement with the EU. His views, as they relate to the agriculture and rural development areas, were borne out by Mr Andy Robertson, who had experience of working with the Commission both as Chief Agricultural Officer with the Scottish Executive and Chief Executive of NFU Scotland. We found these views, forcefully expressed as they were, very interesting and significant but their point was to some extent contradicted at our own subsequent meeting with Commission representatives, whose approach was that the European institutions would give a view as to a proposed course of action, or interpretation of the rules, only after the event and not before, thus endorsing what we had been told by SGRPID officials as to the responses which such approaches to Brussels on their part have generated to date. Reconciling these positions is difficult but constructive dialogue with Brussels, if it can be achieved, is obviously greatly to be desired.
5.19 In 2005 the government of the Republic of Ireland, after consultation with farming interests, promulgated a "Charter of Rights for Farmers". The Charter covered the years 2005 to 2007. It was described by the Minister launching it as "the latest in a series of quality customer service initiatives recently adopted by [her] department" and it pledged, among other things, that the Department would
"[p]rovide comprehensive user-friendly information on application procedures, administrative checks to be carried out, inspection arrangements, eligibility and compliance issues and on payments as well as time frames for the delivery of schemes."
5.20 The Charter and matters of common interest are kept under review by a Charter Review Group which meets four times a year and has an independent Chair, whose function, according to a representative of the Irish Farmers' Association ("the IFA"), is "to make sure that they deliver", "they" being the Irish government. The IFA was also involved in the agreeing of certain "tolerance levels" with the Irish Government as to interpretation of EU regulations and these tolerance levels informed the Charter produced in 2005. These levels were applied in the years 2006 and 2007. In 2008, however, these had to be tightened to take account of views expressed by the European Commission. That sequence of events seems to us to be a good illustration of the tight-rope member states have to walk in the application of aid regulations. The task is not an easy one but there is everything to be said for a mechanism, such as the Irish Charter Review Group, which acts as a recognised conduit of views in relation to these matters between the agricultural industry and Government.
Structure
5.21 Any new structure must address the concerns we heard regarding the number of appeal stages and the independence of the process.
5.22 As we have seen, the second (external) stage of the present structure is more highly valued than the first. Nevertheless we are satisfied that there has to be an opportunity for matters to be resolved within SGRPID before cases enter the formal appeal process. A significant number of cases are resolved in that way at the moment. In some cases a quick check by officials is all that is required to bring errors to light and the necessary remedial action can be taken without delay or the need for more formal procedure. Accordingly, although we favour abolition of the present Stage 1, an opportunity for such checking should remain and SGRPID should ensure that sufficient resources are available to check all cases in which their decision has been challenged with a view to avoiding cases going into the more formal appeal process unnecessarily.
5.23 We have thought long and hard about what that formal process should be. In the end we have come to the conclusion that present concerns and problems can be properly and adequately dealt with only by the setting up of an Appeals Agency separate from and independent of SGRPID and its successors. We are satisfied that the low prioritisation given to appeal work at the moment, its being admixed with other work of higher priority, the consequent appalling timescales for resolution of cases and the perceived lack of true independence of the process until it reaches Stage 3 can only be cured by the setting up of such an agency.
5.24 We have reached this conclusion with some hesitation and reluctance. Hesitation, because the creation of such an agency has cost implications and also because of uncertainty as to the volume of work which will exist for it to handle. Reluctance, because such a recommendation may seem to reflect badly on those who administer the present system. So far as that is concerned we would say that the problems are systemic and not attributable to the individuals operating the system, all of whom, as we have already sought to stress, are doing their best to make the system work in impossible circumstances.
5.25 Indeed it is the very fact that the problems are systemic that makes radical change necessary. Systemic problems can only be cured by changing the system. A change in the system, in the way of reallocation of human resources and altered priorities within the present structures would certainly cut timescales but such changes (a) could be undone in the future as easily as they could be implemented now and (b) would not in any event address the problem of perceived lack of independence. Something more enduring, structured and robust is required.
Appeals Agency
5.26 The model we have in mind is the Irish Agricultural Appeals Office. Although staffed by civil servants, some of them formerly of the Department of Agriculture, Fisheries and Food (or its predecessor departments), its independence is enshrined in legislation. 17 It has a staff of 22 whose only job is to process appeals. That figure breaks down into a Director, Deputy Director, 13 Appeals Officers and seven Administrative Officers of varying grades. It has its own premises at Portlaoise and so is physically distanced from the Department of Agriculture, Fisheries and Food in Dublin. Appellants are entitled to ask for an oral hearing and such hearings are held in all 26 counties of the Republic at locations to suit the appellants. Appeal Officers are responsible for a geographical area but are rotated regularly. Subject to review, if requested, by the Director, the Appeals Officer's decision in a case is challengeable only by appeal to the Irish High Court on a question of law.
5.27 It may be objected that the Republic of Ireland is different from Scotland in terms of the substantially higher number of Single Payments having to be processed and a consequently higher volume of appeals. That is correct. In 2006 Ireland processed 135,693 Single Payment claims and 211,330 claims under a variety of other schemes. In the same year the Appeals Office received only 427 appeals, down from 790 in 2005 because of the move to the new aid regime. 18 In the same year Scotland had only 18,225 SFP claims, 20,343 other claims and the Appeals Secretariat received only 133 appeals. But these are simply differences of scale. Whilst one would want to be reasonably sure that the volume of business was going to justify the cost of setting up such an agency, in principle what sort of system one should have for such appeals does not depend on the volume of appeals but on considerations such as independence, efficiency, simplicity, speed, the quality of outcome and the need to be ECHR compliant. As we said at paragraph 3.3 what matters is to get the system right.
5.28 Parenthetically we may say at this stage that possibly the most telling point of comparison or contrast between Scotland and Ireland is the time taken to dispose of appeals. We have already referred to the problems in Scotland on that front. The average time taken by the Irish Appeals Office to process an appeal in 2006 was 87 days, less than three months. 19
5.29 We would, however, differ from the Irish model in the following important respects.
5.30 Firstly, whereas in Ireland the Appeals Officers take the decision on all appeals, we would favour a system whereby, in suitable cases, oral hearings could be conducted by a panel comprising the Director of the Agency and two independent external members. We do not think all oral hearings should be before such a panel: that would be unworkable given their likely volume and unnecessary given how much cases vary in complexity. Instead we have in mind only the more complex. Parties, or either of them, could request such a hearing but ultimately it would be for the Director of the Agency to decide whether it was appropriate. Hearings in other cases could be before the Director of the Agency or one of his Appeals Officers or the Director and an Appeals Officer sitting together. Again the decision would be that of the Director.
5.31 We depart from the Irish model in this regard because that model, for all its statutorily enshrined independence, is open to the criticism - which we heard - that the Agency is staffed by civil servants some of whom are adjudicating on the work of former colleagues in the Department of Agriculture, Fisheries and Food, or its predecessor the Department of Agriculture and Food. If our recommendation for an Appeals Agency is accepted it is not unlikely that some of its staff, including appeals officers, will come from SGRPID and would thus be open to the same criticism. What we propose offers a solution in cases where perceived lack of independence is an issue.
5.32 In making this recommendation we are satisfied that the convening of external members for a hearing is not one of the causes of present delays. Delays in the present system are caused by the need to find SGRPID officials who are not debarred from taking part in Stage 2 appeals because of earlier involvement with the case (a problem which an independent Appeals Agency would elide) and are exacerbated by delays in compiling the necessary paperwork ahead of such hearings and the reports of such hearings afterwards.
5.33 The second way in which we would differ from the Irish model is that we would recommend that the Director of the Agency be legally qualified. We have come to that conclusion for a number of reasons, of which the desire to make the appeals process a formal legal process is not one. We recognise the dangers associated with that (as to which, see the comments made to us by officials in England and Northern Ireland narrated in Appendix II) and wish to avoid them but we make this recommendation for the following reasons:-
(i) to emphasise the independence of the Agency and help ensure that the new structure is ECHR compliant;
(ii) to have legal expertise available "in-house" (the Irish buy it in from a solicitor in private practice);
(iii) so that cases are handled from a different perspective once they pass to the Agency: as we have seen, even the Irish model runs the risk of its officers' thinking following too closely the approach of civil servants within the Department against whose decisions appeal is being taken;
(iv) because some cases have complex legal elements and parties are from time to time represented by solicitors or counsel;
(v) although we would hope that these cases would be the exception, it will from time to time be necessary to hear evidence on oath and, although that is by no means the exclusive province of lawyers 20 it is something for which a litigation lawyer is well suited; and
(vi) as will be seen below, we recommend reservation of a right of appeal on questions of law to the Land Court and, although practice has improved very much of late, the experience of that Court to date has been one of dissatisfaction with the way things such as the making of findings-in-fact are handled by the present Stage 2 Panels and the Appeals Secretariat.
5.34 The Director of the Agency would have a dual function: (i) to consider appeals and (ii) to be the Chief Executive of the Agency and line manager of its staff. For the first of these duties he should have available to him a small team of Appeals Officers (possibly as small as two), being people with knowledge and understanding of agriculture and expertise in the various aid schemes. These Officers would consider all of the appeals received in order to assess how they should be disposed of: in other words they would sift applications to see what could be decided in favour of the appellant without further procedure and what form further procedure should take in other cases. The majority of cases would probably go to an oral hearing 21 but not necessarily before a panel of three and not necessarily of a formal nature: we would hope that many hearings would in fact be more akin to a present Stage 1 hearing where there is no question of evidence on oath and the like.
5.35 Great emphasis is laid on "scheme" or "policy" experts within SGRPID in the present scheme of things and their unavailability for hearings, because of their other commitments or because of earlier involvement with the case, is a frequent cause of delays. We are persuaded however that even as small a number of Appeals Officers as we propose, whose only work was the processing of appeals, could quickly acquire the necessary degree of expertise in all of the relevant schemes.
5.36 The Director and Appeals Officers would be supported and serviced by a small team of administrative officers - we suggest that five would suffice - whose job would be akin to that of the present Appeals Secretariat. Unlike the present Secretariat, however, they, in conjunction with the Director, would be the masters of the timetable. They would have power to order SGRPID to produce such information as they required within reasonable time limits. The sanction would be that if SGRPID failed to produce the information within that timescale the Agency's eventual recommendation could go against them by default. The model therefore changes from that of a subservient Secretariat dependant upon other people's priorities to a dominant tribunal in charge of its own procedures and timetables and SGRPID's role changes from that of being in control of the whole process to servicing the Appeals Agency by the timeous provision of the requisite information and representing the interests of the Scottish Ministers as parties to the appeal.
5.37 More particularly, the role of SGRPID in the structure we propose would be as follows:-
(i) 30 days would be allowed following intimation of an appeal for SGRPID to review the case in order to see whether they could resolve the matter to the appellant's satisfaction.
(ii) If not, at the expiry of that period the appeal application and copies of the whole relevant papers would be transferred to the Appeals Agency.
(iii) Thereafter the Appeals Agency would dictate both procedure and timetable and the role of SGRPID would be to provide the Agency with such information as it required within such time as it allowed.
(iv) Once the appropriate procedure had been decided, SGRPID would be treated merely as representing the Scottish Ministers as parties to the appeal, on an equal footing with the appellant. Thus if the case was to be decided on written submissions they would have the opportunity of lodging such, if at oral hearing they would have the right to lead evidence or make submissions as appropriate given the nature of the case and the hearing. Once the hearing was over that would be the end of their involvement. In particular they would have no further input to the decision-making process nor further access to the decision makers.
5.38 Hearings would be held throughout Scotland, as presently happens at Stage 2.
5.39 Within our proposed model it would be for the Director of the Agency to ensure that appeals are processed efficiently. That would involve the setting of targets for the average time taken to complete appeals and the rigorous oversight of the efficiency of the whole system. Although disposing of a case properly must always be more important than disposing of it quickly, we see no reason why the timescales being achieved in the Republic of Ireland should not be achieved here.
5.40 The new Agency should be physically apart from SGRPID and all other arms of government. It could be situated anywhere in Scotland. When it seemed that the relocation of the Royal Highland and Agricultural Society to Norton Park was fairly imminent we were minded to suggest the area of the new showground as a suitable location but now that that prospect may be receding we say no more about it. Clearly, however, given its function, location of the new Agency in rural Scotland may be appropriate.
Role of the Scottish Land Court
5.41 We have considered whether the decision of the Appeals Agency should be binding upon Ministers. We have decided against that because (a) Ministers cannot be expected to be bound by decisions which may (for all that the Appeals Agency would have a legally qualified Director) be wrong in law without the opportunity of having the decision examined at a higher level; (b) making Agency decisions binding would mean that the present right of appeal to the Scottish Land Court would be lost, something which most people we spoke to did not want to happen; and (c) the existence of an appeal to the Land Court reinforces the ECHR compliance of the proposed structure. We recommend, therefore, that a right of appeal to the Land Court should remain.
5.42 Having come to that decision, two things about the future role of the Land Court required further consideration.
5.43 The first was whether appeal to the Court should be, as at present, on fact as well as law. The present system sometimes obliges the Court to hear cases where the dispute is all on the facts and there is no dispute as to the relevant law. There is some justification for that given the nature of present Stage 2 hearings where there is no provision for formal enquiry into fact by the taking of evidence on oath. That justification disappears in our proposed system and we do not think that it is a good use of the Land Court's resources to be rehearing evidence in cases where the law is not in dispute. We think that, as a court, the role of the Land Court is more appropriately confined to dealing with questions of law, thus performing the same role as the High Court in Ireland, and we so recommend. Given the statutorily guaranteed independence of our proposed Appeals Agency and the procedures available to it for the investigation of matters of fact, we do not see the lack of further appeal to the Land Court on matters of fact as being contrary to ECHR requirements.
5.44 We have mentioned cases in which the only dispute is as to facts. The second thing we have had to consider so far as the Land Court's role is concerned, is whether there should be a "fast track" to the Court in cases in which the only dispute is as to the law.
5.45 We have come to the conclusion that there should. This could lead to considerable savings of time and expense in certain cases. We therefore recommend that parties should be allowed to agree such a course of action at any time. We also consider that the Director of the Appeals Agency should be able to remit cases of legal complexity to the Court at any time or refer a point of law for decision to the Court at any time. This would be subject to the Chairman of the Land Court agreeing to accept the reference. Given the possible cost implications to parties of procedure before the Court rather than the Agency, such remits should be reserved for cases of substantial financial value or other importance to the parties and involving novel or complex points of law, these being matters which would have to be considered by the Director of the Agency before making such a reference and by the Chairman of the Land Court before accepting it.
5.46 Subject to a case being stated for the opinion of the Court of Session in accordance with section 1(7) of the Scottish Land Court Act 1993, the decision of the Land Court would be binding on parties.
Cost
5.47 Our remit obliges us to bear costs in mind. We have already acknowledged that the structure we propose would have cost implications. We are not qualified to quantify these but we are satisfied that when one bears in mind (a) the small staffing levels we envisage for the new Agency, (b) the possibility of some staff being recruited from the present Appeals Secretariat, and (c) the fact that removal of this work from SGRPID would free staff for other duties and/or would allow some scope for reduction in staff numbers there we do not consider that the additional costs resulting from what we propose would be prohibitive but would, rather, be worth paying for the improvements to which the new arrangements would lead.
« Previous | Contents | Next »