Section C: Action Taken to Ensure High Quality and Effective Implementation
71. During 2003, there were a number of formal reviews which impacted upon ERDP schemes and details of these are provided below. Coupled with this, Defra have continued to review the structure and operation of all the ERDP schemes and, where possible, have sought to change or develop them in order to minimise the administrative cost and burden of delivery and maximise the economic, social and environmental benefits they deliver. This section provides an overview of the action taken to ensure high quality and effective implementation and a summary of the major problems encountered in managing the ERDP by drawing upon the following information:
- an outline of the ERDP Mid-Term Evaluation;
- a summary of the agri-environment schemes review;
- ERDP scheme specific reviews and developments;
- other Programme-wide activity.
ERDP Mid-Term Evaluation
72. The Mid-Term Evaluation of the ERDP, as required by Article 57 of Commission Regulation 445/ 2002, took place during the year and the final report was submitted to the European Commission on 31 December 2003. The independent evaluators, ADAS Consulting Ltd and SQW Ltd, examined the impact of the Programme on rural areas since its inception in 2000 and looked at issues such as:
- progress against Programme and national objectives and targets;
- performance of the ERDP as a whole, as well as performance of individual schemes;
- coherence between schemes;
- facilitation and promotion issues;
- sustainability of scheme and Programme outcomes;
- efficiency of Programme management, delivery and monitoring mechanisms;
- recommendations for suitable changes to the ERDP (principally for the successor Programme in the next financial perspective (2007 onwards).
73. The evaluation process involved analysis of a wide range of environmental, social and economic indicators to determine the impact of the ERDP in rural areas. The evaluators were required to analyse and review existing rural data, academic research, surveys, ERDP scheme reviews and evaluations as well as undertaking new data collection including surveys and geographical information systems analysis.
74. The overall assessment of the ERDP made by the evaluators is that at its mid point a good start has been made in many areas, despite disruption caused by Foot and Mouth disease at the beginning of the Programme. So far the Programme has been most effective at addressing its conservation priority, with the main agri-environment schemes meeting or exceeding their objectives. The project-based schemes, which target the economic and social priority, are newer and have taken time to become established. However the budget spend has increased and there is evidence of a positive impact on local and niche markets, and rural employment.
75. The report identifies issues to be addressed regarding the management and targeting of the schemes, and provides a series of recommendations to help guide future Programme implementation activity. Work has begun on a detailed response to the report and in 2004 Defra will consider whether the ERDP needs to be adapted in light of the evaluation to help achieve targets and improve customer focus. The Mid-Term Evaluation of the ERDP also provided a useful summary of the effectiveness of each scheme, highlighting any problems that had been encountered and proposing or endorsing the steps to be taken to improve overall Programme delivery. Some of the scheme specific recommendations to emerge from the Mid-Term Evaluation are provided in the relevant paragraphs below.
Agri-environment Schemes Review
76. A review of the English agri-environment schemes was a key recommendation of the Policy Commission on the Future of Farming and Food. The review has now been incorporated into the Government's response to the Policy Commission: the Strategy for Sustainable Farming and Food. Progress made on the agri-environment schemes review during 2003 has included:
- Development of Environmental Stewardship: Between March 2002 and December 2003, Defra completed three rounds of consultation concerning the agri-environment review and the proposed new scheme. Following the first two rounds of consultation a document setting out the design of the new scheme was published in October 2003. In December 2003, Ministers agreed that the new agri-environment scheme would be referred to as 'Environmental Stewardship'. The scheme would be made up of two elements, an Entry Level and a Higher Level, with the Entry Level also including an element providing support for organic conversion;
- Development of Entry Level Stewardship: The scheme provides applicants with a broad menu of environmental management activities from which to build up individual agreements. These simple options applied widely will help to improve farmland biodiversity, protect historic features, maintain landscape character and reduce diffuse pollution;
- Launch of Entry Level Stewardship pilots: On 28 February 2003, Defra commenced a five-year, nationally funded pilot of the Entry Level Stewardship. The aim of the pilot was to test the practicability of the Entry Level design on a range of farm types, and to then revise and improve it before making the scheme available nationally in 2005, subject to Commission approval. The four areas of England chosen to pilot the scheme represent a broad range of farming systems (upland, grassland, mixed, arable). Over 250 farmers joined the pilot scheme, well above Defra's target of 200, with at least fifty participants in each of the four areas;
- Evaluation of Entry Level Stewardship pilots: The Entry Level Stewardship pilot was subject to an intensive series of initial evaluations during the summer and autumn of 2003. The results were collected and analysed by the Central Science Laboratory in an interim report, published in October 2003 which concluded that the pilot had largely met its pre-determined success criteria. In December 2003, the Rural Development Service carried out an Entry-Level 'post pilot' exercise. Forty farmers participating in the pilot, 10 from each area, were consulted on potential changes and enhancements to the scheme, based on their experience of the pilot. The Central Science Laboratory then completed the final report of the Entry Level pilot evaluation late February 2004, which confirmed that the pilot had met its success criteria. Agreement has now been reached that, subject to EU approval, Entry Level Stewardship will now be rolled out in 2005;
- Development of Higher Level Stewardship: The second half of 2003 saw the detailed development of the new Higher Level of Environmental Stewardship. This Higher Level will be based on the existing Countryside Stewardship and Environmentally Sensitive Areas schemes and is scheduled to be launched across England in 2005. The five main objectives of the scheme are:
- wildlife conservation;
- protection of the historic environment;
- maintenance and enhancement of landscape quality and character;
- promotion of public access and understanding;
- natural resource protection.
77. Higher Level Stewardship will concentrate on the more complex types of management needed to achieve these objectives, where land managers need advice and support, where agreements need to be tailored to local circumstances and where management needs to be carefully tailored. The design of Higher Level Stewardship will have a very strong focus on environmental outcomes and will incorporate a series of design features intended to help achieve these outcomes, including:
- a requirement for a Farm Environment Plan prior to entry;
- 'Indicators of Success' to guide land managers in adjusting their management to optimise environmental outcomes;
- monitoring of feature condition and regular feedback to agreement holders.
78. Defra ran a third round of consultation on the draft list of Higher Tier options, intermediate objectives and proposed new capital items. The results of this consultation have been analysed and are being used to help finalise the options to be included in the scheme.
Countryside Stewardship and Environmentally Sensitive Areas Schemes
79. The review of payment rates for capital items in the Countryside Stewardship and Environmentally Sensitive Area schemes was concluded during 2003. Payment rates in the two schemes were brought up-to-date (and unified) in the 2003 modification of the ERDP - approved by the Commission's STAR committee on 17th December 2003. Where appropriate, these new rates will apply to capital works carried out during the 2003 scheme year. The unified menu of capital works will be part of the Higher Level of the new Environmental Stewardship Scheme.
80. The CSS and ESA schemes will be closed to new applicants after the 2004 application period. Measures are being introduced with a view to ensuring that existing agreements are either actively maintained or, alternatively, transferred into the new Environmental Stewardship Scheme at the earliest opportunity permitted by available resources. The priority will be to maintain and enhance the environmental benefits secured under the agreements. Payments for farm environmental plans will be available to enable agreements scheduled for renewal in 2005 to qualify for entry into the new scheme.
81. Following on from the decision made in 2002 to bring forward the closure of the 2003 application window to 30 April, the Rural Development Service agreed to design and implement Regional Delivery Plans. The aim was to increase the proportion of agreements offered before 30 November. All the plans had common application processing milestones. The target rate for agreement offers by 30 November was 100 per cent. The regions managed an average rate of 71 per cent, which was a significant improvement on previous years. With this improvement in delivery, more agreements were able to incorporate the new rotational arable options into the first year.
82. An Access Review covering both Countryside Stewardship and Environmentally Sensitive Areas (ESA) Schemes was completed during the year. Among the changes implemented, a new objective has been introduced to provide links to isolated areas of open countryside (mountain, moor, heath, down and registered common land) designated under the 'Countryside Rights of Way Act'. There is also a new publicity and promotion strategy which will highlight the role of permissive access within agri-environment schemes. The Access Review findings have been fed into the Agri-environment Review Steering Group and the development of access options for the Environmental Stewardship Scheme.
83. The Mid-Term Evaluation of the ERDP concluded that Countryside Stewardship in particular was currently operating effectively. That said, the evaluators suggested a number of improvements for both CSS and ESAs such as better integration with other ERDP schemes and improved targeting. These recommendations have been considered as part of the design process for the new Environmental Stewardship scheme which is scheduled to replace CSS and ESA from 2005.
Organic Farming Scheme
84. Modifications to the Organic Farming Scheme (OFS), including the introduction of ongoing maintenance payments to organic farmers and enhanced rates of aid for converting top fruit orchards, were launched on 5 June. This implemented one of the commitments in the Action Plan to encourage organic food and farming in England, launched in 2002. The introduction of maintenance payments under OFS also emerged as a recommendation from the ERDP Mid-Term Evaluation, which suggested that they were required to help secure long-term environmental outputs and to enable the growth of the organic sector to be market-led. The 2003 changes represent an interim measure as from Spring 2005, support for organic farmers will be included in the new Environmental Stewardship Scheme.
85. The Government's support for organic farming is based on the environmental advantages it delivers. There is clear evidence that in a number of areas, including energy use, pollution to air and water, nitrate loss and production of controlled wastes, organic farming scores well. The ongoing maintenance payments are therefore justified within the terms of the Rural Development Regulation as compensation for income foregone (on the basis that market premiums do not fully compensate for production loss and increased cost) with an additional element to reflect environmental benefit.
86. In December 2003, a consultation on the future of Organic Conversion Aid was launched. A broad range of stakeholders were asked for their views on a number of issues relating to the structure and future delivery of conversion aid. Responses to the Consultation will be received during 2004 and will be considered as part of the development of the Organic Strand of Entry Level Stewardship.
Hill Farm Allowance
87. In April 2003, Defra launched a consultation to review the Hill Farm Allowance (HFA) in England. The review considered the effectiveness and future direction of Government incentives for maintaining extensive farming in the Less Favoured Areas (LFAs) in England. The review sought to identify any improvements that can be made to the current HFA, but also explored how the HFA best fits with other measures, including the Entry Level tier of the Environmental Stewardship Scheme and changes arising from CAP reform.
88. The ERDP Mid-Term Evaluation said that the low administrative costs of HFA were attractive and praised the simplicity of the scheme. It recommended that in order to ensure HFA remains a broad and shallow scheme, the enhancements should be either removed or incorporated into the minimum scheme eligibility requirements. The evaluators also suggested that if HFA is to continue to be an inclusive environmental management scheme, better integration with the ERDP agri-environment schemes would be desirable. In light of these recommendations and the changes brought about as a result of the introduction of the Single Farm Payment, Ministers have decided that existing rules should be retained until the end of the current ERDP programming period, except for the following changes:
- removal of the two enhancements for low stocking. Because data on animal numbers previously obtained through the Sheep Annual Premium Scheme and the Suckler Cow Premium Scheme will no longer be available to validate claims, thus necessitating the removal of these enhancements.
- removal of the organic farming enhancement. This is to remove the risk of 'double-counting' for organic hill farmers who are eligible for payments under the Organic Farming Scheme and the new Organic Entry Level Environmental Stewardship Scheme.
89. These proposed changes were notified to the European Commission in April 2004. Further minimal changes to HFA 2006 will be necessary as a result of the introduction of the Single Payment claim form which will replace the Integrated Administration and Control System (IACS) claim procedure. These changes will be notified to the Commission in 2005. The future of Less Favoured Area support after 2006 will be further reviewed in the context of the new Rural Development Regulation covering the period 2007-2013.
Farm Woodland Premium Scheme and Woodland Grant Scheme
90. The joint Forestry Commission and Defra response to the report of the Woodland Creation Review Steering Group was published in April 2003. Most of the Steering Group's 25 headline recommendations were accepted either in whole or in part. The group's key recommendations were to:
- support the creation of high quality woodlands that are designed and managed to deliver clear public benefits;
- provide for a more regionally based approach to woodland creation policy and delivery;
- raise the profile of the role of trees and woodlands in urban renaissance and land regeneration;
- bring the current Woodland Grant Scheme and Farm Woodland Premium Scheme together under one umbrella scheme administered by the Forestry Commission;
- improve the provision of advice and information.
91. In October 2003, Defra and the Forestry Commission launched a public consultation on proposals for a new English Woodland Grant Scheme (EWGS). This new scheme was developed in light of the recent reviews of woodland creation grants in England, the recommendations from the ERDP Mid-Term Evaluation and of the Forestry Commission's support for existing woodlands. Consultees were asked to feed in their comments on the national framework for EWGS, the introduction of regional flexibility within the scheme, and the details of the proposed grants. Responses to the consultation were then used to develop the final structure and detail of the scheme which was submitted to the European Commission in April 2004 for consideration and approval as a Programme modification.
Energy Crops Scheme
92. As noted in Section B of this report, the number of applications received under the Energy Crops Scheme has remained low. The scheme is heavily reliant on the wider renewable energy industry which has seen a number of developments in 2003 that augur well for the success of Energy Crops in the remaining years of the Programme:
- a) Energy White Paper
- The Energy White Paper 'Our energy future - creating a low carbon economy' was launched in February 2003 and set out government plans for future energy policy. The White Paper made it clear that energy efficiency is crucial, highly cost-effective and can deliver big carbon savings across the country. The Energy White Paper identified that biomass may become one of the largest contributors to the renewables generation mix aimed at meeting the aspirational target of 20 per cent of electricity produced from renewables by 2020. Fuels made from bio-mass represent an important potential route for achieving the goal of zero-carbon transport, but also create new opportunities for both UK and global agriculture.
- b) Bio-energy Capital Grants Scheme
- In April 2003, the environment and rural communities received a major boost with the announcement of nearly £19 million in grant awards to help build five green power plants in England. The funding was released from the Government's Bio-energy Capital Grants Scheme which represents an essential component in establishing power generation plants fuelled by energy crops, wood and agricultural by-products. The projects in Staffordshire, Devon, Wiltshire and Somerset have been offered a total of £18. 7 million to help build bio-mass power plants that will produce enough heat and electricity to meet the needs of over 90,000 homes - equivalent to a city the size of Southampton.
- c) The Renewables Obligation
- Introduced in April 2002, the Renewables Obligation requires all licensed electricity suppliers in England and Wales to supply a specified and growing proportion of their electricity sales from a choice of eligible renewable sources - including bio-mass. A public consultation on the Renewables Obligation was launched on 29 August 2003 proposing a number of technical and other amendments to the Obligation; 111 responses were received. As a result of the consultation, in December 2003 it was proposed that co-firing of biomass with fossil fuel under the Renewable Obligation would be extended to allow longer for an energy crop market to develop through establishing biomass operations at co-fired stations.
93. The ERDP Mid-Term Evaluation acknowledged that the problems encountered by the Energy Crops Scheme to date have resulted from market failure rather than publicity issues, noting that the basic mechanisms of the Scheme were sound.
Rural Enterprise Scheme
94. Following concerns about the proportionality of the assessment process for small-scale, low-value project proposals under the Rural Enterprise Scheme, Defra decided to implement a fast-track, risk-based appraisal system which was piloted in 2 RDS regions (East and North West) over a three month period early in 2003. The main parameter for including applications in the pilot was a maximum grant ceiling of £15,000 (irrespective of the rate of grant). The fast-track approach involved a simplified technical assessment report, coupled with decisions being made on a case-by-case basis by the Regional Manager, rather than being considered in batches by the Regional Appraisal Panel. Data was also collected from two control regions (West Midlands and Yorkshire and the Humber) for comparison purposes.
95. Once the three-month pilot had been completed an evaluation of the fast tracking mechanism was carried out. The results of this evaluation indicated that the pilot approach had achieved its primary objective of reducing processing times in terms of both: (i) the overall time between receipt of application and Defra's decision; and (ii) the amount of RDS input required. The figures showed that, whilst some cases can be dealt with quickly under the normal arrangements, overall the processing period was reduced by almost half for the fast-track cases. It was decided to make this fast track system a formal part of the ERDP so it was included as a notification in the 2003 ERDP modification. The fast-track mechanism will be implemented nationally during 2004.
96. As highlighted in Chart 3 and Section B of this report, uptake to the three social measures of RES (basic services for the rural economy and population, renovation and development of villages, protection of the environment), has been considerably lower than uptake to the more economically focused measures of the scheme. In order to improve this situation, RDS regional staff have engaged with community-focused organisations such as Action with Communities in Rural England (ACRE), Rural Community Councils (RCCs) and local authorities during 2003. For example, in the South East region, Defra staff have: held a number of meetings with key contacts; organised a 'training day' to take community group representatives through the RES grant process; introduced a concept note and simple business plan pro-forma for use with community focused projects; and allocated 60 per cent of an adviser's time to working with community bodies.
97. Through the Planning Consultancy Advice (PCA) scheme, farmers who were interested in pursuing viable Rural Enterprise Scheme diversification projects have been able to claim back the costs, up to a limit, for a planning feasibility study undertaken by a suitably qualified consultant. This scheme, which is wholly funded by Defra, fulfils the commitment in the Action Plan for Farming and the Rural White Paper to provide free planning advice for farmers pursuing diversification projects. During 2003, over 1,150 farmers benefited from planning advice at a cost of over £965,500. An independent evaluation of the scheme was initiated during 2003 which will feed into policy decisions on the future of the scheme. Details on whether the scheme achieved its planned objectives were part of the evaluation criteria, as well as information on other available advice to farmers on planning issues. The evaluation is to be presented and analysed in 2004.
Vocational Training Scheme
98. A fast-track appraisal process has also been piloted for the Vocational Training Scheme in order to reduce the time and administrative costs of dealing with small-value applications. The fast-tracking arrangements will allow applications from individual trainees to pass from technical assessment to an immediate funding decision. This means that small-scale applications are dealt with more quickly. The scheme literature has been redrafted, based on customer feedback and experience of operating the scheme, in order to stimulate scheme demand, guide applicants through the application process more effectively and maximise their chance of having their project approved. Defra has also launched an on-line Training Needs Assessment tool which allows interested parties to see how others have been helped by VTS; helps explain the scheme rules; helps applicants calculate costs and set achievable targets; and provides contact details for further queries.
Processing and Marketing Grant
99. The scheme literature for the Processing and Marketing Grant (PMG) was revised in 2003 in order to make it more customer friendly and to stimulate interest and uptake in the scheme. The final report of the economic evaluation of PMG that began in December 2002 was received at the end of last year and the recommendations made were similar to those from the Mid-Term Evaluation of the ERDP. Principally that Defra should reconsider the objectives of PMG and try to simplify and clarify them but also to make the application assessment process more open and transparent. The Mid-Term Evaluation did note that PMG is highly valued by successful applicants and has a significant impact on the scale and nature of proposed investments. However, it suggested that the grant enables rather than stimulates investment meaning that any additionality is likely to be modest. An action plan to respond to these recommendations will be drawn up but initial considerations suggest that most of the recommendations will need to be addressed when drawing up the next Rural Development Programme.
ERDP Governance
100. The ERDP Ministerial Board, originally established in December 2002, met 8 times during 2003. This forum brings together the Minister of State for Rural Affairs, the Minister of State for Environment and the Defra Parliamentary Secretaries for the House of Commons and House of Lords. Each of these four Ministers has a direct interest in the ERDP as a result of their individual portfolio responsibilities. The ERDP Ministerial Board provides the opportunity for Ministers and senior officials to coordinate ERDP delivery, elaborate a strategic overview, and ensure a joined up approach to policy and delivery. This helps maintain the ERDP's position at the heart of Defra's rural policy objectives.
Financial Controls: Cross-checks and Inspections
101. Early in 2003, the European Commission were informed that cross-checks against the IACS database had been undertaken on all agri-environment agreements and claims that were outstanding as a result of the 2001 backdata exercise. It was also confirmed that all new applications, renewals, agreement amendments and claims for agri-environment schemes received had been automatically cross-checked against the IACS database and that the UK had complied fully with the requirements of Commission Regulations 2078/ 92 and 1257/ 99. Automatic cross-checking continued during 2003 and 2,215 potential anomalies had been identified and referred to the Rural Payments Agency for follow-up action. As at the end of December, approximately 90% of these referrals had been resolved, a significant improvement on previous years.
102. Rural Development Service and Rural Payments Agency staff carried out a joint 'lessons learned' exercise during 2003, in order to improve the way cross-checks were carried out. A number of operational and procedural changes, such as enhanced guidance notes for staff, have been introduced. Consequently, the turn-around time for handling cross-checks and any investigative action required had improved markedly, resulting in efficiency savings and better customer service.
103. During 2003, excellent progress had been made in completing the on-the-spot inspections required by Commission regulations 445/ 2002 and 2419/ 2001. By Christmas, 98 per cent of the 2003 inspections required for the agri-environment and forestry schemes had been completed. Procedures are in place to ensure that staff involved in compliance monitoring of projects should not have been involved in the assessment or approval of that project. Any follow-up action required after the completion of the inspection is recorded, monitored and used to inform potential changes or enhancements to the scheme rules and procedures.
erdpIT Programme and RDS Change Programme
104. The erdpIT programme aims to transform the way the ERDP schemes are delivered to customers in support of sustainable rural development. The IT system which is being developed as part of the Programme is also essential to the delivery of the new Environmental Stewardship scheme, which is due to be launched in 2005, it will:
- improve services to customers by providing electronic facilities for on-line applications, claims and queries on the status of agreements;
- improve and simplify business processes;
- provide powerful and accurate management information for effective running of the business and evidence-based policy making;
- use programme management best practice;
- provide an IT system which can help to enable current and future organisational change;
- provide the platform for future developments like mobile computing to enable more flexible and efficient ways of working.
105. Implementation of the system and the new ways of working will be supported by training, which will help staff to adapt to the changes and develop the new skills required. In particular the Programme will enable the Rural Development Service to improve its capacity to deliver by allowing staff to concentrate on providing support to customers and partners and achieve a better outcome for the countryside and rural economy.
106. Coupled with the work to develop the new ERDP IT system, the Rural Development Service have introduced a programme of change designed to help improve ERDP scheme delivery and customer service. In particular it will result in:
- fully integrated delivery teams with a strong customer focus embodied in the role of 'Rural Development Advisers' with prime responsibility for servicing specific customers' needs;
- multi-skilled staff able to advise across the full range of schemes;
- the adoption of account management principles in dealings with customers and partners;
- full implementation of GENESIS, with the electronic record becoming the master record and the operation of 'workflow' to facilitate efficient allocation and progress of scheme related work;
- flatter structures and removal of unnecessary hierarchy;
- significant improvement in the quality, accessibility and use of up-to-date management information.
Page last modified:
17 August, 2005
Page published: 9 July, 2004