Background and context

The Accounting Officer test was completed to support Phase 2 of the Future Farming and Countryside program (FFCP) business case which was submitted to Her Majesty’s Treasury in September 2021. The aim is to secure funding during the 2021 Comprehensive Expenditure Review for the next three years, from fiscal year 2022 and 2023 to the 2024 and 2025, and covers:

  • direct payments
  • environmental and animal welfare results
  • improve agricultural prosperity
  • program support

This case seeks funding of £8.25 billion for Phase 2 (Financial Years 2022 and 2023 to Financial Years 2024 and 2025) of the Future Farming and Countryside Programme, as well as approval of the updated program strategy and plans for phase 3.

The program will bring about the most significant changes in agriculture since the 1940s, phasing out the Common Agricultural Policy and designing and implementing a new set of national arrangements to:

  • contribute to the increase of sustainable productivity in the agricultural industry
  • contribute significantly to the achievement of the objectives defined in the 25-year environmental plan
  • help achieve net zero
  • protect and improve the health and welfare of livestock: help livestock keepers move to higher welfare systems by co-funding investments in equipment, technology and infrastructure and by incentivizing good welfare practices. be higher to improve health and well-being outcomes

The program’s investment during the agricultural transition (financial years 2021 and 2022 to financial year 2028 to 2029) will generate a social net present value of £28.7 billion, with an estimated overall benefit-cost ratio of 2.5. The programs and services introduced under the program will be the primary means for Defra to achieve its goals set out in the 25-year environmental plan, the net zero plans in the agriculture sector and the biodiversity outcomes outlined in the Dasgupta review.

This assessment was carried out in July 2021 by Tamara Finkelstein, Permanent Secretary of the Ministry for Environment, Food and Rural Affairs.

Regularity

The Future Farming and Countryside program has specific legislation in place to meet the current needs of the program and provides for future regulatory instruments as the program expands.

Section 1 of the Farm Act 2020 (“the Act”) provides the Secretary of State with the power to grant financial assistance for and in connection with certain purposes, including the granting of financial assistance under environmental land management programs. The law also includes the power to issue regulations relating to the monitoring, verification and enforcement of the financial assistance granted. These powers were used to craft the Farming (Financial Assistance) Regulations 2021 (SI 2021/405) and further regulations are likely to be required in the future.

The powers of the act also provide for regulations to ensure the continuity and reduction of direct payments, the introduction of de-linked and lump sum payments and to simplify conditionality and rural development, in England, in line with the agricultural transition plan. Statutory texts have been created using these powers and more are expected.

Additional powers under the Science and Technology Act 1965 will allow the Secretary of State to provide financial support for new innovation, research and development programmes.

Overall Assessment – Achieved

Convenience

Procurement activity is conducted in accordance with the Government Procurement Regulations (PCR) 2015 and as set out in the Government Trade Function Procurement Manuals.

Contract management is deployed in accordance with Defra and government contract management standards.

Overall Assessment – Achieved

Value for money

The Future Farming program will end the existing low-value subsidy regime and redirect that public money towards incremental structural change that will deliver environmental, climate and economic results over a transition period of seven years and beyond.

Program investment during the transition period (fiscal years 2021 and 2022 to fiscal year 2028 to 2029) is expected to provide an overall benefit/cost ratio (RBC) of 2.5, with a range of 1.6 to 3.5. All RBC is reduced due to the poor value for money of Direct Payments (which we are phasing out) and Animal Welfare (AW), a large program for which we have not been able to monetize benefits. The cost-benefit analysis carried out for the Future Farming scheme suggests that it represents good value for money for the Treasury and UK society as a whole compared to other alternative courses of action. It is recognized that given the early stage of the program there are uncertainties around some of the quantitative assessment figures but, even taking these into account, the analysis indicates that the program is a rational use of public funds.

Overall Assessment – Achieved

Feasibility

This program is part of the Government’s Major Projects Portfolio (GMPP) and operates as a major program in accordance with best practice standards set by the Infrastructure and Project Manager (APIs) and their gateway processes.

The program has its feasibility for delivery assessed and ensured by an established governance model, including an internal program board and Defra’s investment committee.

In addition to these internal measures, the program is reviewed for its feasibility and control by the Infrastructure and Projects Department (APIs) and the Government Internal Audit Agency (GIAA).

Confidence of delivery during the last walkway review, conducted by the APIs, in August 2021, remained orange, with appreciation for the progress made within the program over the past 12 months. All APIs recommendations are implemented.

The program has reached its critical path milestones in phase 1 and is moving into phase 2 which is a period of testing, piloting, monitoring, evaluation, learning and co-designing with end users, to ensure that policy proposals are feasible and achievable. The program is moving to an agile way of working to manage uncertainty. While there are inevitably, with a program developing and testing new and innovative ways to support the agriculture industry and improve the environment, implementation and transition issues that will require careful and continued attention, the successful delivery by 2024 of phase 2 is considered feasible.

One of the main risks is the preparedness of companies and the willingness of farmers and landowners to participate in the program. We plan to mitigate this risk by monitoring the financial health of the sector, engaging with farmers, and responding in an agile way to adapt the pace and design of programs as needed.

Overall Assessment – Achieved

Affordability

I undertook an affordability assessment with specific reference to two cost elements; plan costs and administrative fees.

Scheme costs relate to payments made to beneficiaries, such as farmers and land managers. These are covered by the manifesto commitment to guarantee the current annual budget to farmers each year from this Parliament and amount to £2.4 billion each year over the period from financial years 2022 and 2023 to financial years 2024 and 2025.

Administrative costs relate to the delivery of our programs and the implementation of our new policies and systems. Although there is no committed funding for administrative costs in the same way as plan costs, the purpose of this business case is to obtain cost approval for the period from fiscal year 2022 and 2023 to fiscal year 2024 and 2025.

Overall Assessment – Achieved

Conclusion

As accounting agent for all money spent in the Defra group. I have reviewed this Agriculture and Landscape Futures Program Assessment and endorsed it on September 13, 2021.

I have prepared this summary to outline the key points that informed my decision. If any of these factors change materially during the life of this project, I undertake to prepare a revised summary, setting out my assessment of them.

This summary will be published on GOV.UK. Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Accounts Officer.

Tamara Finkelstein

September 13, 2021


Source link

Previous

The Business Case for Women in Leadership

Next

Sumitomo Chemical Launches New Business Plan for Fiscal Years 2022-2024, Realizing Green Transformation-led Growth, Investing 1.3 Trillion Yen Over Three Years

Check Also