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Defra pays £580m fine for payment chaos

The bill to taxpayers in Brussels' fines for the Government's mishandling of EU financial help for farmers is likely to top £580 million, a public spending watchdog said.

More than £400m has already been handed over to the European Commission, another £89m is due and allowance has been made for a further £84m, Department for Environment, Food and Rural Affairs (Defra) accounts show.

But the National Audit Office (NAO) said the cost to the public purse was likely to exceed that sum by the time the accounts for the current phase of the Common Agricultural Policy (CAP) - from 2005 to 2015 - were finalised in 2019/20.

The Rural Payments Agency (RPA) was beset with problems running the system of subsidies brought in 2005, which paid farmers based on the amount of land they have rather than how much they produce.

The NAO pointed to "weaknesses in data quality and cross checks" as the major cause of the huge fines and called on Defra to ensure lessons were learned to counter the "significant risks" of similar problems resulting from a more complex CAP regime which will be rolled out in 2015.

A Defra spokeswoman said it was determined to implement the changes in a simple and affordable way.

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