EXTRACTS from Channel Four News on Sunday 10th November 2002

http://www.channel4.com/news/home/z/stories/20021110/c4n.ram

When Foot and Mouth struck, it became a national emergency. Contractors were quickly engaged to dispose of the thousands of animals that were being slaughtered every day. But a year on, many companies still haven't been paid - with one firm is still owed four million pounds and say they are facing bankruptcy and they are now on the verge of taking legal action against the government

Our North of England correspondent Justin Rowlatt reports:

" ..at the peak a hundred thousand animals were being slaughtered every day and thousands of companies and people were drafted in to help dispose of them. Cumbria County Council's waste disposal company was one of them. It worked around the clock to dispose of half a million animal carcases. A year since the end of Foot and Mouth and the company claims it is still owed four million pounds by DEFRA. Now it's threatening to sue, and Cumbria County Council could find itself in the extraordinary position of taking the government to court over a bad debt.

CCC said it did not want to be interviewed by Channel Four News for fear of prejudicing any future legal action. The Council leader says that the sums under challenge here run into millions of pounds under a fundamental challenge to the contract agreement...CCC are not alone in believing that DEFRA are trying to renegotiate contracts. According to the government's own figures the 100 biggest contractors are still owed more than 70 million pounds..Many say they are facing bankruptcy and are also considering legal action.

"...DEFRA was saying to contractors, 'Come in and pressure-wash. We'll pay you £15 pounds as hour. Bring your family out to help..get your wife and kids out! They were desperate to solve the problem. All these people did the job they were asked to do - Now DEFRA are saying "Sorry. £15 an hour was too much. We're not going to pay out that money. DEFRA are simply trying to change the contract terms to weasel out of paying the money they promised at the time at the height of the emergency.

DEFRA declined to be interviewed but it accepted in a statement that " in some cases it has retained monies. It says that this has helped the Department with what it called the "urgent pursuit of those cases where we believe we were overcharged for goods and services. Irregularities in contractors' claims, Defra says, are being investigated and ill be resolved as quickly as possible."

Many contractors did do well out of foot and mouth. One haulage company has been paid almost 40 million pounds and DEFRA is duty bound to ensure that it is not defrauded or overcharged for services

But many contractors now believe that DEFRA's actions go beyond simple financial prudence. The Northumberland and Durham machinery ring is one of those most fashionable businesses in agriculture a cooperative. Some 300 members, mostly farmers club together to share specialist equipment and thereby spread the cost. It's just the sort of thing that DEFRA is trying to encourage at the moment - but this cooperative says that DEFRA has brought it to the brink of bankruptcy. Members of the ring were responsible for helping to disp[ose of carcasses on more than 300 farms in Northumberland. It claims it is owed more than a million pounds and says it has the documentation to prove it. Like many contractors still owed money, it says DEFRA has a deliberate policy of stringing out its inquiries to avoid payment and like CCC the Ring was worried by the consequences of being interviewed by Channel Four News. But, in a news letter to members, the Ring's manager says that DEFRA's demands for documentation have now gone far beyond normal commercial requirements. "Why?" he asks. "To reduce the costs of Foot and Mouth to suit a political purpose? Or maybe it is to reduce the actual costs so that the Treasury gains and we all lose."

DEFRA denies any such intent. It says its goal is to achieve value for money and says its overriding objective is to protect the taxpayer interest. As well as companies, hundreds of individuals claim that they are owed money for clean-up work. (Interview with farmer who says he is owed thousands of pounds by DEFRA but a year on doubts whether he'll ever see the money. "When you think it's the government that do not honour the debt....all they've done in the last few months is back-track on the contracts we were offered....we signed contracts with DEFRA on the rates we should be paid...but they alter the rules to suit themselves.")

The Government has been criticised for the huge costs of Foot and Mouth - 3 billion pounds and counting...but in its attempts to ensure the taxpayer value for money DEFRA appears to be in danger of alienating a large section of the farming community. The danger is that if there is another emergency like Foot and Mouth, many contractors and farmers simply won't be willing to help the government out again.