Taxpayers are will have to meet a bill of £622 million bill for payments made to farmers following reform of the Common Agriculture Policy four years ago, according to a report from the National Audit Office .

Administrative failures at the Rural Payments Agency, which distributes £1.6 billion a year to English farmers, and lack of supervision fromministers is desccribed in one of the most critical audits from public spending watchdog.

The report raises serious questions over the future of the agency and the scrutiny of its operations by the Department for Environment, Food and Rural Affairs (Defra).

In a highly critical assessment, the National Audit Office (NAO)  has accused Defra of showing “scant regard to protecting public money” and failing to provide value for money to taxpayers.

This is the third time it has found serious shortcomings in the payment system.

The NAO found that it is now costing an average of £1,743 process each farmer’s claim for cash, an increase of 20% in the last four years, and six times the £285 cost for administering payments in Scotland.

The Audie Commission found that there were substantial overpayments which totalled between £55 million and £90 million, but the records was so poor that the auditors were unable to calculate the exact amount. Some claims were found to have been validated 11 times by different officials and the final calculation of payment was still incorrect.

Philip Kibby, a director at the NAO, said:

“The agency has considerable problems, there is quite a turnover of staff and a lack of managerial oversight.  This is about the proper use of public funds and Defra as a department needs to take responsibility for this,” he said.

The payments system was condemned as “a masterclass in misadministration” by Edward Leigh, the chairman of the Commons Public Accounts Committee.

He criticised “the clunky patched together IT system”, accused the agency of “shoddy book-keeping” and poor communication with farmers.

“Errors are still being made and farmers have little idea when and how much they will be paid. It [the agency] sends letters completely out of the blue demanding back large sums it has overpaid, causing considerable distress, and in some cases, it has transpired the farmers actually owes nothing at all.”

Liberal Democrat Rural Affairs Spokesperson, Tim Farronsaid:

“It is high time the Government listened to the advice of the NAO,”  

“This report is a damning indictment of the Government’s misuse of taxpayers’ money.

“Administration costs have spiralled so that we are in the ridiculous situation where the average cost per claim has shot up to £1,743, even though claims can be as low as 70p.

“It is high time the Government listened to the advice of the NAO and followed through on an alternative payment system.

“This needs to include a minimum payment figure of around £300 so that the smallest claims are filtered out and farmers get their payments efficiently, effectively and on time.”