Farmers' CAP payments £178m IT system slammed for 'multiple failures', including a conflict of interests

The IT system designed to deliver important EU payments to farmers experienced “multiple failures” including running vastly over budget and a “significant conflict of interests” with a contractor, Audit Scotland has reported.

The project was hit by weak governance and “a lack of trust and blame culture”  among workers, the report from the national spending watchdog said.

The delays have had a damaging impact on farmers already struggling with severe flooding and low milk prices, the auditor warned.

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The five-year IT scheme began in 2012 but has been hit with multiple delays and rising costs. Originally estimated to cost £102million, it now has a final budget of £178million and a reduced scope.

Audit Scotland warned the delays in payments to farmers could lead to a fine of up to £125m from the EU if the fund runs out before it meets its requirements by the 30 June.

An investigation by the BBC in March revealed former delivery director Dominic Prabhu had delivered contract to his own company for the work.

Audit Scotland confirmed "there was an opportunity for the delivery director to benefit financially from the programme recruiting from his company".

The Scottish Government set up a resources group in 2015 to make recruitment decisions, but Prabhu was on it.

"The delivery director should not have been on the resources group and allowed a direct involvement in recruitment decisions," the report said.

Caroline Gardner, Auditor General for Scotland, said: “The CAP Futures programme has been beset with difficulties from the start. These problems, and the way they have been dealt with by the Scottish Government, are a serious concern, particularly as the programme continues to face major obstacles and is unlikely to deliver value for money.

“The scale of the challenge ahead should not be underestimated. It's vital that the Scottish Government take steps now to ensure the IT system is fit for purpose, and fully assess the potential financial impact if it's unable to meet the Commission's regulations within the programme's remaining budget.”

Conservative North-East Scotland MSP Alex Johnstone said the government had “taken their eye off the ball and failed farmers and our rural communities”, while Scottish Labour have called for an urgent statement in parliament.

Mark Ruskell, Environment and Rural Affairs spokesperson for the Scottish Greens said the report’s findings were “inexcusable”