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By Andy McCue, 21 November 2003 16:20

NEWS Subsidies vital to Welsh farmers worth £50m were delayed in the last year because of "wide-ranging" problems with a new Welsh Assembly IT system, according to a report by the National Audit Office for Wales.

The delayed regular payments represent a quarter of the £149m of Common Agricultural Policy (CAP) and Tir Mynydd subsidies relied on by livestock farmers in Wales. In one four-month period almost 1,000 claims were not paid.

The Assembly introduced the £9m CAPIT system in 2002 to authorise payments as part of a 'risk-reward' partnership deal with Cap Gemini Ernst & Young.

But the need to divert key staff to assist with foot and mouth resulted in a delay of about six months to the CAPIT project, with the consequence that the development, testing, software release and training then coincided with the opening of the payment windows in 2002. Foot and mouth was also the reason that the Geographical Information System project - which linked with the CAPIT system - was delayed by a full 12 months.

Problems with the scanning technology and staff unfamiliarity with the new system was also compounded by the introduction of complex new EU legislation but the report reveals that CGEY contributed some resources for free to enable the project to continue.

In the meantime the Assembly was forced to develop a hybrid computer process using legacy systems to make payments and set up a call centre to deal exclusively with calls from affected farmers.

Sir John Bourn, auditor general for Wales, said in a National Audit Office report: "These grant and subsidy payments are critical to the business of farmers in Wales. However, in this instance, the Assembly did not provide the overall standard of service that farmers have a right to expect."

The report, Late payments to farmers in Wales, noted that the Assembly had made a better start to this year, making £74m – 50 per cent – of CAP payments in the first two days.