COSTS

 

Recent information which has come to light confirms that the scale of the costs of the epidemic are enormous, and that they are ongoing, and will continue long into the future. It is evident that the slaughter campaign was embarked upon using out of date cost-benefit analyses produced by the EU in the early 1990s. When the outbreak magnified, the costs were already out of hand, and on a scale never seen before in any previous FMD outbreak. So when the epidemiologists produced "seductive graphs" promising that cases would be down to zero in time for the Election day, the price must have seemed worth paying.

However, this entailed a massive culling policy of contiguous and 3 km farms. "Between 4th and 12 May alone, 889 farms had been slaughtered out, at an average of 125 farms a day. The daily average of animals killed in that week had been 32,000, almost three times the average for the previous week." (Not the FMD report, Private Eye, North and Booker). The true scale of the slaughter was hidden from the public by the changes in the way the statistics were presented, with hundreds of cases, which would normally have been included in MAFF’s daily "headline figure", being reclassified under such headings as SOS or DCs. Thus the costs escalated.

The Election came and went, but the slaughter had not stopped. In fact it was proceeding with vigour, and in the week after the Election 80,000 animals were killed. The following week the total was 93,000. The slaughter continued throughout the summer, and although the last confirmed case of FMD was apparently on 30th September, DEFRA have admitted to slaughtering thousands since then. They have actually added over 200,000 to their slaughter totals since 30th September, although they stress there was readjustment of figures.

However, it was not long after the beginning of the crisis that additional problems (and with them extra costs) started to emerge e.g. the pollution from the pyres and burial pits, which necessitated a hasty programme of digging up of ash and carcasses, further incineration, and reburial.

It is evident that the public have no idea of the true scale of the costs: many costs just have not been itemised in government figures available to the public. Some information seems to appear only in Parliamentary Answers. Some costs have yet to be calculated, and some are clearly understated e.g. in the Chancellor’s Pre-Budget Report in November 2001 he does not make clear that over 10,000 premises have been slaughtered out due to FMD, and therefore have had to be recompensed. Instead he prefers to confine his remarks to the so-called Infected Premises: "The impact of the Foot and Mouth outbreak has been severe in many rural areas. Over 2000 farms have been infected in the UK since the first case was confirmed at the end of February 2001.." For anyone who did not know any better, the impression is given that only 2000 farms were affected in the crisis.

I have listed below some problem areas I have come across which I feel are worthy of investigation, from which many lessons can be learned. They highlight how easy it has been for a crisis to get completely out of control, and for the associated costs to spiral. The mass cull advocated by Anderson in order to attain zero cases by the Election required a huge logistical effort with correspondingly large costs. However, instead of the mass cull resulting in a rapid solution to the FMD epidemic, the reverse has happened, with the epidemic grinding on and consequently costs growing all the time. The refusal of the epidemiologists and the government to admit that their policy was a disaster, possibly because they wanted to save face, has resulted in the country being dragged through months of misery and hardship, each day clocking up even bigger debts. In a period when the government is less popular, and is being severely criticised for failing to deliver on Public Services, the massive outlay associated with FMD is highly embarrassing.

If there had been adequate contingency planning for disease control of the kind stipulated in the EU Contingency Plan, with adequate planning and provision for vaccination, then the knee-jerk response to the handling of the disease would not have happened, and the enormous costs would have been avoided. There would have been no side-lining of Nick Brown and Jim Scudamore by Prof. King and his team, a narrow "in-house" group of scientists, for which Dr David Shannon reserved particularly scathing criticism. If only the team had been drawn up in an independent manner, with experts drawn from Europe and the USA, as Anderson claimed, the disease control policy would have been very different. It is worth looking at what Prof Anderson said to the EFRA Select Committee on 7th November when he was asked about the formation of the Science Group. (Source: Hansard, 16th Jan).

233. Who first asked you, and when, to construct this model of the outbreak?

Professor Anderson "…In the last week of February, I had a phone call from Sir John Krebs at the Food Standards Agency, who said, "Are you looking at this privately?" and I said, yes, we had; he said, "Would it be helpful to organise a meeting to ensure that you had prompt access to the data?" and we discussed membership of that committee, who were the best people, not only in Britain but more broadly, in Europe and the United States. That committee was organised by Sir John Krebs. Subsequent to that, we did some more work, very quickly, because it was quite clear the epidemic was not under control , and at a subsequent meeting of the FSA, which John Krebs organised, he invited David King. At that meeting, David King formally took a detailed interest in the problem and constituted the Science Group, and then for the following month we were asked questions almost daily, particularly at one stage, about, if you did this what impact would it have."

 

 

The IOD has estimated the cost of FMD epidemic to the UK to be about £20 billion, and the cost to tourism between £3-5 billion. The Chancellor refers to costs of £2.6 billion to the economy. The breakdown of these costs is referred to in "Cost of the FMD epidemic"(Veterinary Record, 8th December, 2001).

"The Chancellor said in his pre-budget speech on November 27 that the FMD outbreaks had cost the government £2.7 billion so far.

According to Government figures, £1.25 billion of this was given in compensation to farmers for slaughtered animals and £701 million was spent on disease eradication measures, such as disinfecting farms, slaughtermen, hauliers, and so on. The amount paid to farmers under the livestock welfare scheme was £471 million, and approximately £156 million was spent on agrimonetary compensation to allow for differences in exchange rates where support payments were made in euros. Grants made under the business recovery fund accounted for £354 million. £20 million was spent on farmers’ rate relief, and £15 million on advice and marketing support for farmers. A further £18 million was spent on tourism promotion and £4million on reopening rights of way. £13 million was spent on matched funding for charitable donations. Further costs, such as deferring farmers’ tax payments, have not yet been taken into account.

In its pre-budget report, the Treasury notes that the government had asked HM Customs and Excise and the Inland Revenue to make ‘special arrangements’ for FMD-affected businesses. It notes that these revenue departments have provided help to over 22,000 businesses by allowing them to defer over £191million in tax and NI contributions. It also points out that the Government has waived interest that is normally charged on such deferred payments.

The pre-budget report comments that, ‘Although the final overall macro-economic impact of the FMD epidemic still cannot be determined, the broad magnitudes involved are now clearer.’ It notes that ‘ the agricultural sector carries a weight of less than 2 per cent of real GDP, of which a third is livestock production’…..Discussing the economic effects of FMD on tourism the pre-budget report points out that this sector accounts for the equivalent of approximately 5 % of GDP in the UK, and suggests that, before September 11, approximately 50% of the fall in overseas visitors during 2001 had been the result of FMD…

Overall, the effect of FMD on GDP is estimated by the Treasury to be 0.2 %. It recognises, however, that the economic impact on the most severely affected regions has been much greater…."

 

This still leaves a lot of questions unanswered. Christopher Booker and Richard North in the "Not the FMD Report" Private Eye, stated that the total cost for each infected farm, including compensation, cleaning up etc was at least £250,000. On this basis, the cost to the taxpayer of the 9500 farms culled by the end of September was nearing £2.5 billion. This almost reaches Gordon Brown’s figures, and yet what about all the other costs that Brown is including in his £2.6 billion e.g. £471 million for the LWD scheme, £156 million for agrimonetary compensation, £354 million for the Business Recovery Fund? Booker and North estimate that the cost to the Exchequer is much nearer £8 billion. This may well be the case if one considers the following:

Why is there no mention of the cost of TVIs? The cost is considerable, with 2575 TVIs being paid over £33 million. This does not include the costs of the 286 full-time equivalents in the SVS, mentioned in PQ 22104, 17th December?

 

Mr. Drew: To ask the Secretary of State for Environment, Food and Rural Affairs how many vets work for the State Veterinary Service; and how many were employed at the outbreak of the current foot and mouth epidemic. [22104]

17 Dec 2001 : Column: 147W

Mr. Morley [holding answer 11 December 2001]: The number of vets that work for the State Veterinary Service is 286 (full-time equivalents, as at January 2001). All of these veterinarians have assisted in the eradication of foot and mouth disease in some capacity.

 

Mr. Drew: To ask the Secretary of State for Environment, Food and Rural Affairs what the total cost of employing temporary veterinary inspectors during the foot and mouth outbreak was. [22107]

Mr. Morley [holding answer 11 December 2001]: The total cost of payment to those temporary veterinary inspectors (TVIs) appointed for foot and mouth disease, (as of November 2001) is £33,183,049. This comprises fees plus travel and subsistence expenses.

 

Mr. Drew: To ask the Secretary of State for Environment, Food and Rural Affairs how many temporary veterinary inspectors, by area, were taken on during the foot and mouth epidemic. [22105]

Mr. Morley [holding answer 11 December 2001]: It is not possible to provide the number of temporary veterinary inspectors (TVIs) employed by area during the foot and mouth epidemic. We appointed 2,575 TVIs during the foot and mouth crisis and they moved around the country where they were most needed. TVIs were not necessarily assigned to one area.

 

In view of the above, why did DEFRA inform the journalist, Ann Treneman ("The new haves and have-nots", by Ann Treneman, Times 2, 31st Jan., 2002) that the veterinary costs were only £15 million? When she queried this, they insisted on £15 million, saying these were "direct" veterinary costs. Is this another attempt to cover up the true scale of costs? The cost of the vets, will obviously include board and lodging, and that has to be accounted for somewhere. What about the costs of flights over to this country for all those foreign vets (approx. 1800 of them)?

 

What is the cost of the massive blood and tissue testing programme? There is a reference in Hansard (Margaret Beckett) to the greatly increased testing capacity, with facilities being increased dramatically to handle over 200,000 tests per week. It was well known that testing facilities were used at other labs besides Pirbright, and that contracts for some staff have been renewed at least until early summer. Ann Winterton has tabled a question on my behalf, on this matter, but there has been no reply as yet (42372). (Partial unsatisfactory reply received. D. Lidington tabling another).

 

What are the costs of the Army?

 

What are the costs of the Police?

 

What are the total Civil Service costs? They must be very considerable, yet apparently no mention is made of them in the Chancellor’s estimates. On 22nd Jan. no answer was forthcoming to Mr Flynn from Elliot Morley.

Paul Flynn: To ask the Secretary of State for Environment, Food and Rural Affairs what was the total expenditure on (a) compensation, (b) Civil Service costs, (c) decontamination, (d) additional rural aid and (e) payments to vets, slaughterers and valuers arising from the foot and mouth disease epidemic. [26024]

Mr. Morley: The total estimated expenditure arising out of foot and mouth disease is as follows:

(a) compensation for animals slaughtered and for seized and destroyed items is £1,114,200,000;

(b) total Civil Service costs are not yet available;

(c) costs for cleansing and disinfection are £280,000,000;

(d) additional rural payments are not yet available; and

(e) total costs for vets, slaughterers and valuers is £72,100,000.

 

 

What was the cost of the 2 million lambs slaughtered under the "Light Lamb Disposal Scheme", and also the incentives given to supermarkets to sell some of this meat?

 

If the cost to tourism is estimated at between £3 and £5 billion, what is the cost to ancillary industries. To quote just two examples out of thousands: the outdoor equipment industry alone reported sales down by £40million. (Not the FMD Report Private Eye). Even the BTCV lost £250,000 out of its £23 million turnover. (PQ 22104 17th Dec. 2001).

 

What has been the true cost of all the burial and incineration sites, and what are the estimated risk assessment, maintenance and monitoring costs for the future? How many of these sites are there?

 

What has been the cost of digging up of carcasses and ash and reburial to date, and what are the estimates of this for the future? Peter Hetherington, in an article "Reburial of cattle ashes sparks fear of BSE pollution in water", (The Guardian, 9th February, 2002), refers to the

"scores of foot and mouth disposal sites around England, where animals were burned and buried,…being dug up after almost a year amid fears that water supplies could be contaminated. The government acknowledged yesterday that ash had so far been removed from 160 locations, at a cost of almost £30 million, and dumped at landfill quarries in Buckinghamshire and West Cumbria…..

It was revealed that 80 wagons had been involved in one operation in Northumberland for the past four weeks, and that the task was nowhere near finished. Operations at another farm are said to have cost £1.6 million. A letter this week from the DEFRA to an estate manager in Northumberland said it had asked the environment agency for a risk assessment.."

 

What has been the cost of discharging of the effluent from the Great Orton site, equivalent in the early days to the entire sewage disposal for Carlisle, and now apparently equivalent to the effluent from a small village?

 

What are the true costs of the huge Ash Moor pit near Petrockstowe? John Burnett, (Torridge and West Devon), estimated the total cost of purchase and preparing the site to be in the order of £10 million. The weekly cost of monitoring and keeping the site is £20,000. What would be the costs of restoration? Details of this, and the wider costs of the whole FMD disaster to Devon are described below in this extract from a Parliamentary Debate, 18th December.

18 Dec 2001 : Column 62WH

 

Foot and Mouth (Devon)

 

1.30pm

Mr. John Burnett (Torridge and West Devon): I am grateful to have been given this opportunity to raise the impact of foot and mouth in Devon. I am grateful to Devon county council, Torridge district council, West Devon borough council, Dartmoor national park, South West Tourism, the National Farmers' Union, and numerous other farmers and businessmen in my constituency, for the help that they have given me in preparing for today's debate. I should also put on record that I farmed for more than 20 years in my constituency and I still own farmland there, which is rented out.

I believe that it would help the Chamber if I gave some stark statistics about this years' outbreak of foot and mouth in so far as it has impacted on Devon, and particularly on my constituency, which was the most severely hit of all the Devon constituencies that suffered with foot and mouth. We had by far the largest incidence of the disease. The constituency of my hon. Friend the Member for North Devon (Nick Harvey), had the second largest incidence of the disease in the county.

In Devon, we had 173 confirmed cases of foot and mouth and 4,500 farms were placed under D form notices and movement restrictions. Taken together, nearly half the farms in Devon were directly affected. A total of 386,203 animals were slaughtered in the county and 3,000 miles of footpaths were closed when the disease was at its height. I hasten to add that they are virtually all now open. We lost 2.6 per cent. of the county's gross domestic product, which meant that about £316 million went out of Devon's economy as a result of foot and mouth. In West Devon borough, of which my constituency envelopes the bulk, 89 per cent. of firms reported a downturn in business as a result of foot and mouth.

It should be borne in mind that in Devon, 32 per cent. of our population earn below the EU average. Devon county council has estimated that over a 12-month period, job losses have reached nearly 8,000, of which slightly more than 1,500 are in agriculture. Nearly 3,000 are in ancillary industries, and some 3,332 jobs were lost in tourism.

I am anxious to highlight some real problems in Devon and in my constituency, but nevertheless, I shall point to some positive signs. The people of Devon will never lie down in supine despair in the face of any catastrophe. They have the courage, foresight, imagination and energy to recover. I intend to stress the steps that we are taking to recover towards the end of my speech.

The Minister will know that on a number of occasions I have raised the problems of Ash moor, which is in my constituency. It is in the parish of Petrockstowe. At the height of the foot and mouth crisis, there was real confusion in Devon. We kept being told that some half a million carcases had not been disposed of, but that was the justification for constructing and purchasing Ash moor. As it happens, that was a gross overestimate of the number of carcases that had not been disposed of. In any event, Ash moor was just about the most unsuitable site for a carcase burial site that one could find. Carcase burial is about the worst method of disposing of animal

18 Dec 2001 : Column 63WH

carcases. Far from being impervious, the land below the site at Ash moor is extremely porous. There was no environmental assessment and no microbiological study. Worst of all, the Under-Secretary of State for Environment, Food and Rural Affairs told me in reply to a parliamentary question that the water table is between 1.3 m and 3.5 m below ground level. The burrows are more than 20 m deep, so if the site were ever brought into use and however many pumps were available, one flash flood would cause thousands of gallons of pernicious effluent to flood the valley and poison the water supplies of many thousands of people.

In response to the same series of questions, the Under-Secretary told me that the cost of the work at Ash moor at the beginning of November this year was around £5.6 million. However, he qualified that figure because it is subject to confirmation following negotiations that are taking place with, I believe, the main contractor. That figure also excludes the cost of purchase of the site. I estimate that the cost of the site--a white elephant--is currently in the region of £10 million. In addition, the weekly cost of monitoring and keeping the site is £20,000 a week, or more than £1 million a year just for upkeep.

The Minister informed me that if Ash moor were ever brought into use further costs would be more than £1.5 million and that odour control, long-term maintenance, monitoring and testing would cost, in addition, approximately £400,000. Ash moor has been and continues to be a vast waste of public money. I hope that the Minister for Rural Affairs will confirm today that the site will be dismantled and restored to its former use as a peaceful wildlife habitat.

I have never understood why during the foot and mouth crisis the then Ministry of Agriculture, Fisheries and Food did not liaise with local authorities and other local bodies. If it had done so, it would never have made plans for four or five huge pyres within half a mile of Holsworthy hospital. The weather in Devon is far from predictable. Fortunately, after a series of negotiations and demonstrations, we had to suffer only one smaller pyre at Holsworthy, but it is time for Arscott farm to be restored to its former use as a farm.

The events at Ash moor and Holsworthy demonstrate two reasons why we need a public inquiry into what happened during the foot and mouth crisis. West Devon borough council, with the full support of the three political groups represented on the council, wrote to the Secretary of State for Environment, Food and Rural Affairs requesting a full statutory inquiry into the causes, course and handling of the outbreak with the purpose of promoting understanding and an improved response to any further recurrence.

 

What are the costs associated with the Epynt burial and incineration site: cost of purchase, preparation of site, burning and burial of carcasses, supplies of coal, sleepers, and fuel, transport costs, weekly maintenance, digging up and transporting the ash, reburial of ash, long term monitoring of the environmental pollution, cost of repairing damage to the environment, cost of eventual restoration. Some idea of the scale of the FMD disaster and the devastating effects of Epynt can be gained by visiting the website www.epynt-disaster.co.uk it is extremely puzzling that 40,000 carcasses, of which only 7000 were cattle, produced 20,000 tons of ash. Locals knew that many more animals had been brought onto the site than MAFF was admitting to, simply by the volume of lorry traffic which they monitored. The scale of the killing must have been phenomenal in order to have kept this size of pit "in business" for so long, and it certainly did not tie in with the impressions that the government was giving that the epidemic was all but over, and that slaughter was on a small scale. Some idea of the scale of the whole operation can be gained from the lorry operation which began on 30th July and lasted 8 weeks, 7 days a week, 24hours a day, to remove the ash from the site to secure landfill sites elsewhere e.g. Bucks. Ann Winterton has again tabled some Parliamentary questions on my behalf about the costs associated with Epynt (42373, 42374), but again we are still waiting for a reply.

 

What is the cost of the Inquiries that have been set up by the government to investigate the FMD epidemic?

 

What is the cost of court action by the government to date?

 

Why does DEFRA need 16 Press Officers, at a cost of £693,410 from 1st April to beginning of November? (PQ 10608 {holding answer 26th October} Peter Ainsworth, November 2001).

 

Are the following all included in Gordon Brown’s estimates: the cost of Meacher’s Rural Task Force; the cost of the Economic Impact Assessment Group referred to in PQ 19985 by Duncan and Liddell; the increased security and publicity (what little there was) at airports referred to in Annex 1 of EFRA Select Committee, 6th November?

 

 

The sheer scale of costs is difficult to imagine, and how it has been allowed to escalate is quite incredible. In a time when our public services are appalling and are desperately needing large injections of capital, it seems incomprehensible that our government embarked on such an insane mass slaughter policy, which had never been tried and tested, and which had never had any cost benefit analysis carried out. When one looks at the financial costs above, and then adds to that the costs in terms of human and animal suffering, the cost in terms of animal life, the huge damage to farming and the rural community (some of it permanent), then it seems criminal that the EU Strategy for Emergency Vaccination was not implemented. One may ask why was it drawn up, if not to be used?

"At 50p a shot, with a further £4.50 for administration, the cost of vaccinating even 40 million of Britain’s 60 million farm animals would have been £200 million." (Booker and North).

The cost of vaccination pales into insignificance compared with the minimum cost for the current disease control policy of £20 billion to the UK. All this to save an export trade worth at most £560 million.