BSE, the cost of a crisis : thirty-fourth report, together with the proceedings of the Committee relating to the report, the minutes of evidence and appendices / Committee of Public Accounts.

  • Public Accounts Committee
Date:
1999
Catalogue details

Licence: Open Government Licence

Credit: BSE, the cost of a crisis : thirty-fourth report, together with the proceedings of the Committee relating to the report, the minutes of evidence and appendices / Committee of Public Accounts. Source: Wellcome Collection.

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    (iii) (iv) (v) (vi) THE COMMITTEE OF PUBLIC ACCOUNTS Vii cattle eligible for the scheme, and the limited number of rendering companies were in a dominant position. Fees to renderers ranged from £105 per tonne at the start of the scheme to an average of some £82 per tonne in January 1998 as a result of competitive tendering. As well as these fees, the renderers benefited from a temporary support scheme for the industry. In all these circumstances, the Board did not dispute the likelihood of some excess profits. The Board should seek to identify the extent of any overcompensation and to take this into account in any negotiations for future work (paragraph 24). The Over Thirty Month Scheme was unprecedented and involved a level and type of operation not previously undertaken. The Ministry and the Board therefore lacked basic information about issues such as the number of cattle likely to enter the scheme; or the appropriate prices to pay for slaughtering and rendering of cattle. In such circumstances, and with significant funds available for dealing with the crisis, the departments may have been at risk of exploitation. We expect the Ministry and the Board to ascertain the financial impact of the schemes on the various elements of the industry (paragraph 25). In estimating the likely speed with which a computer system could be introduced for the administration of the Over Thirty Month Scheme, the Board envisaged a much simpler scheme than in practice was developed. The absence of a comprehensive system until August 1997 affected the quality of information available for claimants and the European Union and so led to delay in recovery of advance payments and to doubts about the accuracy of payments made (paragraph 26). The Board was unable to link data on the cattle for which advance payments of £13 million were made in July 1996 with data on those eventually presented into the scheme. The Board was aware of that difficulty at the time advances were made. It is therefore unsatisfactory that the Board did not have in place better arrangements for recovery of these debts and that over two years later some £1 million was still outstanding. We expect the Board to complete its recovery as quickly as possible (paragraph 27). Equally unsatisfactory is the position with the Board’s comparison of amounts of compensation paid under the manual system with what would have paid had a computer system been available at the start. This comparison shows inconsistencies representing possible net overpayments of some £4.77 million, mostly via abattoirs. We expect the Board to have completed its investigations of these by its target date of 31 March 1999 and, where errors are confirmed, to seek immediate recovery or make supplementary payments (paragraph 28). (vii) (viii) We welcome the fact that the ban on export of beef and beef products from the United Kingdom is on the way to being lifted in certain cases. We expect the Ministry to ensure that its controls at slaughterhouses and operation of the new British Cattle Movement Service meet the requirements of the European Commission and make a full contribution to restoring and maintaining consumer confidence here and in other member states (paragraph 36). In view of the importance the European authorities attach to computerised traceability of cattle before exports can resume, it is surprising that the Ministry appeared to believe that the absence of such a system in Britain in March 1996 had a limited impact on the costs incurred. Apart from the potential for earlier lifting of the export ban and for increased consumer confidence, a cattle database might have provided better information and wider options for the United Kingdom in its responses at the start of the crisis (paragraph 37).