Removal of entitlements and resulting overpayment
17. In 2015 Mr D was transferring ownership of some of his land. In April 2015, Mr D’s agent submitted the relevant form to transfer entitlements, in relation to land Mr D had sold, to a third party. At that point Mr D retained entitlements for the portion of land he still owned. Mr D told us he asked his agent to deal with his 2015 BPS application. Mr D told us this was a verbal agreement only.
18. The deadline for applying to the 2015 BPS was 15 May 2015. Neither Mr D, nor his agent on his behalf, applied for the 2015 BPS. Mr D thought his agent had applied.
19. In April 2016, Mr D applied for the 2016 BPS. In December the RPA paid him £2,041.69. In April 2017 Mr D applied for the 2017 BPS. In December the RPA paid him £2,186.47.
20. Mr D did not apply for the 2015 BPS. That meant his entitlements expired and the RPA should have removed Mr D’s entitlements from its system, in line with the rules for the BPS scheme (paragraph 10). It failed to do so. That was maladministration.
21. According to the BPS rules, Mr D was not entitled to payments in subsequent years because he no longer held any entitlements. But in 2016 and 2017 Mr D applied to the BPS and the RPA paid him over £4,000 in relation to those claims. That was also maladministration. The RPA’s maladministration, in not removing Mr D’s entitlements from its system (paragraph 20), led to further errors. It should not have paid him in 2016 and 2017 because he was not entitled to those payments.
Recovery of overpayments
22. EU rules for the recovery of overpayments said that where the RPA made an undue payment, the receiver should repay the amount in question. The repayment obligation did not apply where: a. payment was made by error of the competent authority – in this case the RPA b. the error could not reasonably have been detected by the beneficiary c. the decision to recover the payment was not communicated within 12 months of the payment.
23. Before going on to consider the RPA’s decision to recover the overpayment in Mr D’s individual case, we need to consider what it was doing more generally in response to the overpayment situation.
24. The maladministration in Mr D’s case was not an isolated error. Problems with the RPA’s systems meant it failed to remove expired entitlements relating to hundreds of landowners. That meant it also overpaid those landowners if they applied in subsequent years. A later RPA note to the Treasury said: ‘we have encountered issues arising from the non-surrender of BPS entitlements from 2016 onwards that have only been rectified in 2019. The issue has led to a number of overpayments whereby entitlements have expired but not been removed from the originating customer by the system, allowing the originator to continue claiming against them or to transfer them to new recipients. This has resulted in payments against these entitlements in years where these entitlements should have been expired’.
25. In the context of a more widespread problem, the RPA sought to develop an overall approach to dealing with those overpayments.
26. An undated internal RPA document considered remedy for those affected. It explained that while the RPA accepted it was at fault for the situation, this was balanced by the fact published guidance was clear and therefore entitlement holders should have been aware the relevant entitlements were no longer valid. The RPA decided it should pursue original entitlement holders for full recovery of any overpayments.
27. On 13 September 2019 the RPA considered the issue. It said those affected were largely unaware they may owe money from previous years. Mr D was aware by this point. The RPA was due to recover approximately £1.1million. It agreed to continue its approach to recover monies from the original entitlement holders and ensure all entitlements were surrendered.
28. On 6 December 2019, the RPA’s executive team agreed it remained appropriate to recover overpayments from original entitlement holders.
29. On 6 May 2020 a Department for Environment, Food and Rural Affairs (Defra) update to the Treasury said that in 2015 claimants were required to ‘match each entitlement to a hectare of land and not all customers did that for all the entitlements they held. Since these entitlements were not then cancelled by [the RPA], they were rolled over and claimants were not prompted to complete this step before claiming. They went on to make claims in 2017 and 2018 […] It is believed that in the first year the claimants would have known of the need to change their claim. As a result, only the amounts paid in the first year on the cancelled entitlements will be pursued for recovery’.
30. On 21 September 2020 an internal RPA email confirmed it would recover the 2016 overpayments but would write-off debts for 2017 and 2018. It also confirmed that ‘after discussion it has been accepted that [the RPA] acted late in removing the entitlements and in so doing prevented the original holders rectifying their claims for 2017 and 2018. As a result, the proposal here is for the payments made in these two years to not be clawed back’.
31. The fact the RPA’s problem affected many people did not change what it had to consider in deciding whether to recover any overpayments. Those requirements were set out in the rules to the BPS (paragraph 22) and applied no matter how many people were affected.
32. Two parts of that consideration were relatively straightforward. Were the payments made as a result of RPA error? – yes. Were landowners notified within 12 months of the overpayment? – in most instances probably not, and in any case that was easy to determine in each individual case. Less straightforward was whether those who had been overpaid could reasonably have spotted the overpayment.
33. The RPA does appear to have carefully considered that point. The deliberations we have described above are related to whether people could have reasonably spotted the overpayment in 2016 and subsequent years. Our understanding of the position the RPA reached is as follows.
34. The 2015 BPS handbook was clear that failure to apply in that year would lead to the expiration of any previously held entitlements. Therefore, landowners who mistakenly received BPS payments in 2016 ought to have known those payments were in error. They had not applied in 2015 and should have known from the BPS handbook that would result in expired entitlements and no future payments. So, 2016 overpayments were recoverable.
35. But the position in 2017 was different. Whether landowners could reasonably be expected to have spotted the 2017 overpayment was clouded by the fact the RPA had paid their 2016 claims. The fact of the 2016 payments cast additional doubt on whether 2017 payments were in error, meaning it was not reasonable for the landowners to spot the error.
36. In summary, the RPA decided to recover the 2016 overpayments on the basis landowners should have spotted the error, but to waive recovery of the 2017 overpayments on the basis that landowners could not have been expected to detect the mistake.
37. We found no maladministration in the overall approach taken by the RPA. Our Principles of Good Administration say that in their decision making, organisations should have regard to relevant legislation. They should take account of all relevant considerations, ignore irrelevant ones, and balance the evidence appropriately. The RPA did that in its overall approach to this issue. It considered the BPS rules as set out in EU law, took account of relevant factors about whether landowners could have spotted the error, and did not include anything that was not relevant.
38. In line with its general approach the RPA decided in May 2020 that it should recover the 2016 overpayment from Mr D. It confirmed that decision in January 2021 following Mr D’s appeal (paragraph 67).
39. Our Principles of Good Administration say people should be treated fairly and consistently, so that those in similar circumstances are dealt with in a similar way. Any difference in treatment should be justified by the individual circumstances of the case. As well as coming up with a general approach to the issue, to ensure consistency, the onus was still on the RPA to consider the individual circumstances of each case. We will consider whether it did that for Mr D.
40. In April 2016 Mr D telephoned the RPA. The RPA noted Mr D asked when he was going to get his 2015 claim statement. The RPA checked its system and could not find a claim from Mr D. It asked him to check with his agent to see if he had a receipt for submitting the claim. Mr D said he would check and call the RPA again.
41. Mr D agrees he telephoned the RPA in April 2016. His account of that call goes beyond what the RPA recorded in its note. Since making his complaint in May 2019 Mr D has consistently said that not only did the RPA tell him it had not received a 2015 application, and that therefore no payment was due, but that it also told him he still held the entitlements.
42. In May 2019 the RPA received a payment query from Mr D. He explained he had asked his agent to submit his 2015 BPS application, but the agent had not. He said they became aware of this when they did not receive a BPS payment from December 2015. Mr D said they understood this was an important year to get their application submitted. He said the fact the application had not been received was a mistake and an unintended consequence of their complicated situation at the time. He said: ‘crucially, on enquiring with the Rural Payments Agency about the lateness of our payment in 2015, I was told that no claim had been received and hence therefore no payment would be due but that we still held our entitlements’.
43. Mr D went on to say that in subsequent years they had received payment, so they did not understand why they had now been told their entitlements had been removed. He said there had been errors on the part of the RPA, which was why this was only becoming apparent now. He said he had received no official notification of the removal of his entitlements, and asked the RPA to give reconsideration to reinstating them.
44. In September 2019 Mr D submitted a complaint to the RPA. He gave more detail about his recollection of the call to the RPA in April 2016. He said he would have tried to sort the problem out with the agent but: ‘because RPA said that we still had our entitlements, we did not pursue this further, knowing that we would be able to claim in the future as indicated by RPA and put 2015 down to a mistake’.
45. Mr D also told us that he applied for the 2016 BPS precisely because the RPA had told him he still held entitlements to claim against, and would not have done so otherwise. We also note that at the time of the call the RPA’s system did incorrectly show Mr D still held the entitlements. That incorrect information is what would have been available to the RPA’s call handler.
46. We recognise the RPA’s decision to recover the 2016 overpayment involved an element of discretion in determining whether Mr D could reasonably have detected the overpayment. In line with its general approach to the issue, the RPA placed significant responsibility on Mr D to have read the BPS guidance and to therefore know his entitlements should have expired. That is a relevant consideration given he had not applied in 2015.
47. However, the RPA did not go beyond its general approach to consider the other factors relevant to Mr D’s case. It did not do this in its original overpayment recovery decision, nor in its decision following the appeal. It gave no consideration to what Mr D said about the telephone call in April 2016. It did not consider his account that the RPA had told him his entitlements had not expired. It did not consider that at the time its own system incorrectly showed Mr D still held entitlements, or what actions Mr D took after that call. In deciding to recover Mr D’s 2016 overpayment, the RPA failed to take account of all relevant considerations and in doing so failed to ‘get it right’ in line with our Principles (paragraph 37). That was maladministration.
Complaint handling
48. In February 2019 Mr D telephoned the RPA to query the status of his 2018 payments. The RPA told Mr D he had no entitlements and therefore he would not receive payment. It arranged to call him again to speak further about the matter. On 1 March the RPA telephoned Mr D. It told him his entitlements had expired because he did not apply for the 2015 BPS. It said this had only recently come to light because of a system problem which had now been fixed.
49. In May 2019 the RPA received a payment query form Mr D (paragraphs 42 and 43). In July 2019 Mr D telephoned to enquire after his payment query. The RPA told him his query would be dealt with as soon as possible.
50. In September 2019 Mr D telephoned the RPA to chase a response to his payment query. The RPA advised his query was on its system but there were no updates at that time. It said his query would be worked on in due course and if there was an error it would be rectified.
51. On 9 September 2019 the RPA wrote to Mr D. It said that following his failure to apply for the 2015 BPS his entitlements were surrendered to the national reserve. It said he was therefore not entitled to receive a BPS payment. The RPA said nothing about why it had paid Mr D in 2016 and 2017. It signposted Mr D to its complaints process.
52. On 10 September 2019 Mr D spoke to the RPA again. The RPA said any entitlements not claimed in 2015 were lost to the national reserve, and that this had been clearly outlined in the BPS scheme rules and guidance. Mr D asked why the RPA had paid him in 2016 and 2017 if the entitlements had been taken off them. The RPA said it would look into matters and that he needed to put his query in writing with supporting evidence.
53. On 18 September 2019 Mrs D emailed their MP about their complaint. On 23 September their MP wrote to the RPA Chief Executive. He asked the Chief Executive to review Mr D’s case to ensure his claim had been correctly assessed.
54. On 30 September 2019 Mr D submitted a complaint to the RPA. He gave more detail about his recollection of the call to the RPA in December 2015 (paragraph 44).
55. On 17 October 2019 the RPA wrote to Mr and Mrs D’s MP. It explained Mr and Mrs D’s entitlements had expired because it did not receive a 2015 claim form. It said an error in its payments system meant it paid them for 2016 and 2017. It said it was obliged to recover those overpayments. It said the technical error had affected a small number of other claimants and it needed to take a wider view on the impact of this error.
56. An undated telephone note shows the RPA telephoned Mr D and left a message. It confirmed it had received his complaint and said it would provide a full resolution or further update before 11 November 2019.
57. A further undated telephone note shows an RPA’s complaints case worker telephoned Mr D to introduce themselves. They said they would contact him again as soon as they were able to provide him with an update.
58. In January 2020 Mr and Mrs D’s MP emailed the RPA. He said it had been nearly three months since his previous contact and asked for an update. On 14 January the RPA replied to the MP. It said it was looking at the cases affected by the system error to take account of the individual circumstances surrounding each case. It said that due to the potential impact on the small number of claimants affected, its management team wanted to make sure they had looked at what was possible under the relevant regulations.
59. In March 2020 Mr and Mrs D’s MP chased progress again. On 27 March the RPA apologised for how long the matter was taking to resolve. It said work was ongoing on the small number of cases affected and that senior management were deciding on the best course of action for each case affected.
60. In April 2020 the RPA made a decision about Mr and Mrs D’s complaint. On 7 April the RPA emailed Mr and Mrs D’s MP. It said it hoped to send the outcome to them within the next two weeks.
61. In May 2020 the RPA wrote to Mr D to explain its decision. It said it had not automatically removed his entitlements from its system before the 2016 BPS application window. It said it did not complete this until November 2018. It apologised for making 2016 and 2017 BPS payments and said this was its own administration error. The RPA said it was obliged to recover the overpayments. It apologised for the length of time it had taken to resolve Mr D’s complaint, and offered a consolatory payment of £200, to be offset against the overpayment.
62. On 11 May 2020 the RPA also wrote to Mr and Mrs D’s MP. It said it was unable to change the decision to recover the 2016 and 2017 payments made to them. It said its senior managers had looked at each case to see if there was any flexibility within the rules to allow it to ‘write off’ the debt, but it had not been able to do this. It said Mr and Mrs D could appeal the decision to an independent panel. It said this would cost £250, which would be refunded if the appeal was successful.
63. On 20 May 2020 the RPA wrote to Mr D. It said it had further considered its recovery of the overpayments, and that it would only recover the 2016 overpayment. It said this was because the 2015 BPS guidance was clear that excess entitlements would be lost. It said that beyond 2016 it would not have been clear that affected entitlements were no longer eligible for use. For that reason, it would not recover the 2017 overpayment. This was in line with the general approach the RPA took to these cases (paragraphs 24 to 30).
64. In June 2020 Mr and Mrs D submitted an appeal against the recovery of the overpayments.
65. In August 2020 the RPA appeals panel considered Mr and Mrs D’s appeal. The panel recommended the RPA should not recover the 2016 overpayment from Mr D. The RPA subsequently submitted that panel’s recommendation to the Minister for Farming, Fisheries and Food (the Minister).
66. In October 2020 the RPA wrote to Mr and Mrs D’s MP. It said COVID-19 restrictions had interrupted the appeal process flow. It said it next scheduled appeals meeting with the Minister was later next month.
67. An internal RPA email in late November 2020 set out the RPA’s position. It said, among other things, that the RPA had rescinded the 2017 overpayment, in accordance with the national concession guidelines not to recover the 2017 overpayment. It said the Minister agreed with the RPA’s recommendation to dismiss Mr and Mrs D’s appeal on the grounds that a remedy approach had been agreed and their approach was consistent with the treatment of other similar claims. The RPA told Mr D its decision on 12 January 2021.
68. Our Principles of Good Complaint Handling say organisations should deal with complaints promptly. They should also keep people regularly informed about progress and about any delays. Organisations should also give full explanations when things have gone wrong.
69. We have not limited ourselves to considering the RPA’s complaints process in the very strictest sense. It is clear to us that when Mr and Mrs D talk about the length of time to resolve their complaint, they mean from when they first contacted the RPA about the problem to when the RPA gave its final response. That encompasses the RPA’s payment query process, its complaints process, and its appeal process.
70. Mr D first raised a payment query on 23 May 2019. The RPA did not respond to that query until 9 September. Its response said he was not entitled to payments in 2016 and 2017. It said nothing about why it had paid him in those years.
71. There were no published standards for how quickly the RPA should respond to payment queries. However, given the limited information the RPA provided in its answer to Mr D’s payment query, we cannot see any good reason why it took so long to respond to him. Three and a half months was not dealing with Mr D’s issue promptly. Neither did the response contain a full explanation. The RPA told him little more than it had already told him in February and March 2019, that the payments were wrong because his entitlements had expired. It did not explain what had happened to cause the overpayments.
72. At that time the RPA did know what had happened. It knew from at least February 2019 that it had an issue with the non-surrender of entitlements. We accept that in September it was still working through the full implications of what had happened, but it did know what had happened and why. At this point the RPA should have explained to Mr and Mrs D what had happened. It did not.
73. Mr D made his formal complaint at the end of September 2019. In October the RPA told Mr D’s MP a system error had caused the issues. By 6 December the RPA’s executive team had decided it would continue to recover monies from those who had been overpaid. Despite that, the RPA did not send a response to Mr D’s complaint until 7 May 2020, five months later.
74. In that response the RPA said the time it had taken to respond was because of the circumstances of the query and ensuring BPS claims across all scheme years had been processed correctly, in line with EU regulations. In itself that seems a good reason for a delay. But the RPA had reached a decision about that in December 2019. We accept there will be some lag between an executive team decision and frontline complaints staff having the right information to use in its responses. But we have seen no good reason why it took a further five months to respond to Mr D. It failed to respond promptly.
75. Having waited so long, the RPA then failed to take account of a changing situation. By the time it finally responded to Mr D’s complaint, on 7 May 2020, it was about to take a different approach. The day before its response to Mr D, a Defra update to the Treasury sought approval for a different approach which meant it would not recover 2017 overpayments. I have seen nothing to suggest Defra thought it would not get Treasury approval, or that there would be any significant delay. Yet it went ahead and told Mr D it would recover the 2016 and 2017 overpayments, only to tell him something different on 20 May.
76. Mr and Mrs D were also concerned the RPA had not fully explained what had happened and how it would put things right. We note the RPA told Mr D on 1 March 2019 that a system problem had caused the overpayments. On 17 October it described a technical error in its payments system as the cause of the problem.
77. We find the RPA did explain the cause of the problem – a technical error with its systems. We do not think there was very much to be gained by the RPA going into more detail about the exact nature or underlying cause of the technical issue. That said, the RPA gave us some more information that Mr and Mrs D might find useful. It told us its computer program to return unused entitlements to the national reserve failed to run if no application was received at all. That meant the entitlements were left on people’s records. It might have been better if the RPA had given a slightly fuller explanation, but we think not doing so was not so serious as to be maladministration.
78. Our Principles of Good Complaint Handling also say organisations should tell complainants about any changes they make to prevent problems recurring. We find the RPA failed to do that. It did not tell Mr and Mrs D what it had done to prevent the problem happening again for other people. That was maladministration. Again, the RPA has given us some further information which Mr and Mrs D might find helpful. It appears the problem was a one-off related to the first year of the BPS. To fix that single problem the RPA told us it performed a manual operation to identify all cases affected by the issue and to remove the entitlements from the system.
79. Turning finally to the appeal stage of the process. The appeals panel considered Mr D’s case in late August 2020. According to the RPA’s letter to Mr and Mrs D’s MP, matters were then delayed by COVID-19 restrictions. Given what was happening at that time, we see no reason not to accept that explanation at face value. But by 27 November, according to the RPA’s emails, the Minister had decided to dismiss the appeal. The RPA delayed communicating that decision to Mr D until 12 January 2021, more than six weeks later. We find that further delay was also maladministration.
80. In summary, we find the RPA delayed in responding to Mr and Mrs D’s complaint. It delayed for around two months in responding to the initial payment query, and caused a further five month delay responding to their formal complaint. It delayed another seven weeks in letting them know the outcome of their appeal. We find the RPA also failed to fully explain what had happened at the earliest opportunity, and confused matters by giving answers it knew were about to change. It also failed to explain what it had done to put the problem right.
Injustice
81. Whatever the errors the RPA made at various points in dealing with Mr and Mrs D’s case, it is important to remember Mr D was not entitled to BPS payments in 2016 and 2017. It is a matter of fact that he did not apply for the 2015 BPS, and that therefore his entitlements for 2015 and future BPS years expired.
82. The RPA’s failure to remove Mr D’s entitlements from its system did not cause a financial injustice to him at the time. In fact, Mr D received over £4,000 (in 2016 and 2017) to which he was not entitled. The RPA’s failings did not cause him a financial injustice in that regard, but Mr and Mrs D have not claimed they were entitled to the money. The injustice to them goes beyond that factual point.
83. If it was not for the RPA ’s maladministration it would not have paid Mr D in 2016 and 2017. It would have rejected his applications on the basis he no longer held entitlements. Mr D now faces the prospect of the 2016 money being recovered from him. BPS rules mean the RPA should recover overpayments unless certain conditions are met (paragraph 22). As we have explained, the RPA did not consider all relevant considerations when making its decision to recover the 2016 payment from Mr D. That the RPA has not properly considered whether to recover the overpayment, and that therefore Mr D has been subject to a decision taken with maladministration, is an injustice to Mr D in itself.
84. The RPA’s maladministration also meant Mr D undertook an appeal against a decision the RPA had not taken properly, and he paid £250. Mr D should not have had to do this. That is an injustice to Mr D.
85. The RPA apologised to Mr and Mrs D for its errors and the fact that meant it paid them money to which they were not entitled. It also said it would pay them £200 for the time it had taken to resolve matters, but it would offset that against the money Mr D owed the RPA.
86. We find the RPA’s errors in paying Mr D and then deciding to recover the overpayment, and the subsequent failings in its handling of Mr and Mrs D’s complaint, caused them unnecessary and prolonged distress and worry. Mr D told us that during this period he was diagnosed with lymphoma and had to have chemotherapy. He said it had been a real struggle and that he would worry each time he had to correspond with the RPA. Mrs D said that with Mr D’s health issues, she had had to take on much of the burden of dealing with the RPA. Of course, the RPA is not responsible for Mr D’s health problems. But its failings caused unnecessary additional distress at a time when Mr and Mrs D were already dealing with very difficult life events. The RPA’s failings in considering whether to recover the 2016 BPS overpayment means the issue is still unresolved, almost three years after the issue came to light. They should not have had to take on that additional burden.
87. We were pleased to see the RPA had apologised to Mr and Mrs D, but we do not think its actions go far enough. We find the £200 payment offered by the RPA is insufficient to remedy the emotional impact its failings had on Mr and Mrs D. Neither do we accept the RPA’s approach to conflating the compensation payment it decided was due to Mr and Mrs D, and the money they owe from the 2016 BPS payment. Those are entirely separate things.
88. Our Principles for Remedy say that where maladministration has led to injustice or hardship, public bodies should try to offer a remedy that returns the complainant to the position they would have been in otherwise. If that is not possible, the remedy should compensate them appropriately. In effect, the RPA’s offer of £200 was because it cannot go back and undo the distress and inconvenience caused by its mistakes. It was a remedy for a non-financial injustice. Neither that injustice, nor the remedy for it, are connected to the actual financial situation of the overpaid monies. That is a separate matter for the RPA to deal with. The RPA automatically offsetting the £200 payment against the BPS overpayment negates the purpose of the payment in the first place. Mr D may, of course, choose to use the £200 payment to repay some of the BPS overpayment. But that is a choice for him, not the RPA. In proposing to offset in the payment to Mr D, we do not think the RPA has yet done enough to put things right.