£260m foot-and-mouth probe goes onFeb 2 2005
Investigations are still under way into invoices submitted by 57 contractors employed by the Government during the 2001 foot-and-mouth epidemic, a report has revealed.
The Department of Environment, Food and Rural Affairs challenged bills totalling £700 million submitted by 130 contractors after the outbreak, complaining of irregularities including excessive charges for plant and labour, use of sub-standard materials and shredding of vital documents.
Settlements have been reached with 73 contractors, with savings to Defra totalling £40 million.
But the remaining bills - together worth £260million - are still under investigation, with a number of contractors facing court action and Defra hopeful of clawing back a further £17 million at least, according to the report by Whitehall spending watchdog the National Audit Office.
The foot-and-mouth outbreak cost the UK a total of more than £3billion, and the Government came under fire for providing excessive compensation to farmers for the culling of six million animals.
The European Commission last year rejected a Defra claim for £960 million compensation for the cull, agreeing to pay only £350 million because it believed that farmers had been given payouts worth two to three times the true value of their slaughtered livestock.
Defra is currently considering the introduction of a levy to ensure that industry shoulders a proportion of the cost of any future animal disease epidemic.
But the proposal has been delayed because ministers wanted to make it part of a wider programme of changes for farming, including reform of the EU's Common Agricultural Policy.
Today's NAO report looks at the progress made by the Government in implementing changes recommended following the 2001 epidemic.
It applauds action taken to reduce the chance of infected food getting into animal feed, to restrict routine movements of livestock, to beef up security at ports and to improve reporting of suspect cases.
Doubts persist on foot and mouthDavid Hencke, Westminster correspondent
Wednesday February 2, 2005
Britain is still not prepared for any new foot and mouth epidemic, four years after the disaster that led to a cull of 6m animals and postponement of the last general election, the National Audit Office reveals today.
While auditors agree that progress has been made to reduce the chances of a repeat disaster, a promised new government computer system to tackle exotic diseases is not in place, and even more illegal meat fed to animals - said to have been the reason for the outbreak - is being smuggled into the country.
The European Commission has refused to meet 60% of the government's £960m claim for costs and compensation because it says Britain paid two to three times the market value for slaughtered animals and was overcharged by contractors culling them. Taxpayers paid £3bn in compensation and to control the outbreak.
The 2001 epidemic led to a dispute between Tony Blair and Nick Brown, then agriculture minister, whose ministry was accused of incompetence.
Downing Street, fearful of a backlash during the run-up to the last general election, took the lead in fighting the disease and Mr Blair prevailed in awarding more generous compensation to farmers. The auditor's reports cites a series of cases where farmers overclaimed cash, including one payment of £240,715 -since recovered - for animals which had never been slaughtered.
Contractors were found to have inflated bills by marking up material prices, overcharging for labour time, and incorrectly recording labour hours.
The report says the ministry now has one of the best contingency plans for dealing with foot and mouth, but fears it will not work smoothly because co-ordination between Whitehall and local government and farmers has not been properly organised.
It warns that the dispute which bedevilled the last outbreak, whether to vaccinate or cull animals, would arise again because no decision on how to handle this had been made.
The report also warns that the five large burial sites where tens of thousands of carcasses were still buried will need to be monitored for the next 10 years. Some £37m has had to be spent on moving 150,000 tonnes of ash from 200 farm burial sites.
The Department of Environment, Food and Rural Affairs said yesterday that it felt it had effectively tackled the problem.
New foot and mouth action urgedA senior Tory MP has criticised agriculture department Defra's "lackadaisical" approach to planning for a future foot and mouth outbreak.
Public accounts committee chairman Edward Leigh was giving his reaction to a report by a government watchdog on lessons to be learnt from the crisis.
The National Audit Office said Defra had improved its capacity to deal with future livestock disease outbreaks.
But Mr Leigh said the department was "dragging its heels".
That comment referred to the setting up of a scheme to share any future compensation costs with industry.
He also said Defra had been "dreadfully slow" in paying some of its bills dating from the foot and mouth crisis.
The outbreak, which began in 2001, led to the slaughter of 6.5 million animals, devastated many farms and rural businesses, and is estimated to have cost the UK up to £8bn.
"Four years after the outbreak, Defra is yet to begin its planned review of some of its contractors' costs, and £40m of invoices remain unpaid," Mr Leigh said.
Mr Leigh also pointed out that the introduction of an IT system to help control future outbreaks had been delayed.
In November it emerged European Commission compensation amounted to just over a third of the money the UK government had hoped to get as reimbursement for the billions lost through the foot and mouth crisis.
New compensation scheme
Ministers had hoped to get £900m from the European Union Vet Fund to help with animal slaughter and other costs but in the end was granted £349m.
That was because the UK had valued the culled animals at between "two and three times" the commission's assessment of their likely market value.
National Audit Office chief Sir John Bourn said a new compensation scheme was now being looked at.
On the issue of the unpaid invoices, Sir John said Defra had paid 97% of the £1.3bn submitted by contractors since 2001, "but has not agreed a final settlement with 57 contractors pending the results of its investigations".
A number of cases were awaiting legal action and one was the subject of an ongoing police probe.
The ONS said that Defra's contingency plan for dealing with future disease outbreaks was one of the best but more work was needed to engage with local authorities as new proposals were "relevant mainly to central government".
Mr Leigh said being "better prepared" would also help avoid the need for "mass funeral pyres which provided an unsettling images of the 2001 outbreak".