Rural Payments Agency

4. Mr K entered an HLS agreement with Natural England (NE) from 2006 to 2016, which became the responsibility of the RPA in October 2018. He complains: • in 2005 he received advice from NE which led him to include ineligible parts of his land in the agreement and caused overpayments from the scheme to arise • in March 2015 RPA carried out a compliance inspection which was badly conducted and not supported by evidence, and • NE took two and a half years to release the report with the findings of the inspection, and further delays in reviewing the findings meant it was not until April 2021 that he was able to resolve issues that arose following the report.

5. Mr K says because he relied on NE’s advice in 2005 and because RPA conducted the inspection badly in 2015, he incurred avoidable costs and spent a significant amount of time preparing his appeal. He adds that the delays in dealing with matters meant he, along with his wife and son, spent more than five years worrying they would need to repay a significant sum that would be a financial threat to their business partnership.

6. Mr K wants financial compensation for the costs he incurred, the time he spent dealing with his appeal and the avoidable distress he, his wife and his son experienced. He seeks service improvements so these mistakes are not repeated.

7. Mr K and his wife and son entered into an HLS agreement (that encouraged landowners to manage their land in a way that benefited the environment in return for payments) with NE in 2006.

8. In April 2019 RPA told the family they would need to repay about £23,000.

9. In August 2020 RPA amended the amount it was seeking to recover to just over £11,000.

10. In 2021 Mr K and his family appealed successfully to the Independent Agricultural Appeals Panel (the Panel). The Panel found NE wrongly told them they were eligible for the payments. The Panel said the payment should be waived in accordance with regulations. However, the family said they incurred approximately £5,000 in legal costs to prepare for the appeal.

13. We find some of the organisations’ actions were inconsistent with relevant guidance and were therefore maladministration (fault).

Incorrect advice

14. Mr K complains he received incorrect advice from NE in 2005 which led him to include ineligible parts of his land in the agreement. This caused overpayments from the scheme to happen. Our ‘Principles of Good Administration’ say public bodies should give people information and advice that is clear, accurate, complete, relevant and timely. We find NE gave Mr K factually wrong advice. We have seen evidence NE told Mr K the part of his land that provided a visitor attraction farm was eligible. However, the Higher Steward Level Handbook said a visitor attraction was a ‘permanently ineligible feature’ because it was non-agricultural land. We find NE’s advice was a fault that led Mr K to include ineligible land in his agreement and caused overpayments to arise.

Inspection

15. Mr K complains RPA carried out a compliance inspection in March 2015 which was badly conducted and not supported by evidence. RPA’s response to the complaint said its actions were consistent with relevant guidance but it has not provided detailed evidence which supports its view.

16. Our Principles say organisations should be ‘open and accountable’ – that they should create and maintain usable records. Here, RPA/NE internal papers noted concerns about the usefulness of the inspection records. The Panel also said NE had not kept photographs from the inspection. We consider RPA’s failure to keep a clear audit trail of its decision was not ‘open and accountable’. It means we cannot reach a view on how the inspection was conducted and also means its decision is not supported by evidence. We find it was maladministration.

Delay

17. Mr K complains NE took two and a half years, until 2017, to release the report with the findings of the 2015 inspection. In addition, further delays in reviewing the findings meant it was not until April 2021 he was able to resolve issues that arose following the report. We consider that if RPA had not given Mr K incorrect advice, these events would not have happened.

Injustice

18. If the fault we identify had not happened, Mr K would not have received an overpayment from RPA. Nor would he have needed to defend himself at the Panel and thus incur legal costs. Had RPA retained clearer records and evidence, Mr K might have had confidence in the RPA inspection and understood the reasons behind RPA’s decision.

19. Mr K says through conversations and information from NE soon after the March 2015 inspection, the family knew there were concerns. They were worried about what would happen but did not know how much they might be asked to repay. He said NE had implied the family had ‘breached’ much of the agreement. Mr K thought that meant he could conceivably have been asked to repay every subsidy since 2005, as much as £250,000. He said the business would likely not have survived. Given the lack of any more detail from RPA between 2015 and 2019, this was an understandable and worrying concern.

20. Mr K said RPA’s actions had a detrimental impact on him and his family.

• At the time of the 2015 inspection, his son, who was in his early twenties, had recently become a partner in the business, with no warning of the issue about to arise. He said there had been an impact on his son’s mental health for which he had needed counselling, and Mr K was sure the issues with RPA had contributed to that.

• His wife had also needed counselling. She had been responsible for the business’s accounts at the time and so had seen most clearly the risk to the business. He said she had been unable to attend the Panel hearing because she was too upset.

• Mr K had been affected to a lesser extent than his wife and won, but he had been constantly aware of how serious the outcome might be, which resulted in many sleepless nights and severely affected his family life.

21. In light of the evidence above, we accept the prospect of repaying a potentially large sum of money would likely have had an ongoing negative impact on the family’s mental and emotional state.

22. We consider RPA’s actions had an impact which meets level three of our financial remedy scale - it caused a single traumatic experience and significant distress to Mr K and his family which impacted their ability to live a normal life to some degree. Mr K said their uncertainty ended in April 2019, four years after the 2015 inspection, when RPA said it was seeking about £23,000. He said repaying that smaller amount would have been difficult but achievable. So we identify four years of ongoing concern, uncertainty and distress.

23. We accept the weight of this worry did not prevent Mr K and his family from continuing with their business but it would have likely cast a shadow over their planning. We consider the worry and distress would have reduced in 2019 and 2021 when they realised the amount RPA was seeking would not force their business to close. However, the appeals process and Panel hearing would have caused them, and Mrs K in particular, frustration and upset. The appeals process also meant the family was put to the trouble and inconvenience of resolving the matter with RPA.

24. Mr K says he incurred avoidable costs. Our general approach is to try to put people back in the position they would have been in had the fault(s) in their complaint not happened. Had the overpayments caused by incorrect advice not happened, Mr K would not have included ineligible land in his claim. Had he not done that, RPA would not have sought to recover overpayments that were not recoverable because they were the product of incorrect advice, and Mr K and his family would not have incurred legal costs challenging that. They also would not have incurred £103.50 mileage costs going to meetings and other appointments necessary to resolve the issues in the complaint. We find the family’s £5,651 legal and £103.50 mileage costs were an injustice caused by the incorrect advice and the fault we identify.

25. Mr K asked for compensation for the time he and his family spent dealing with the issues in the complaint. He provided a time log that came to 64 hours over four years. He sought compensation at £45 per hour. Mr K said £45 per hour was roughly what they earned working on their business. Bearing in mind the 64 hours were over four years between three people, we do not think it’s unreasonable to say the issues in the complaint could have been pursued in the family’s spare time. Also, the family did use professionals and RPA has agreed to repay them for that. We do not agree the compensation for the family’s time is an actual loss RPA needs to put right to restore the family to the position they would have been in but for the fault.

26. We recognise RPA’s actions caused Mr K inconvenience and put him to the trouble of resolving matters. Below we set out a recommendation about compensating the family for the non-financial impact of the events.

1. The Parliamentary and Health Service Ombudsman has found the Rural Payments Agency’s (RPA) actions and advice about Mr K’s Higher Level Stewardship (HLS) agreement were inconsistent with relevant guidance. We consider RPA’s actions led to Mr K incorrectly receiving an overpayment. We find this caused issues that were not put right. We therefore uphold the complaint.

2. We recommend RPA, within one month of our final report: • write to Mr K and his family to apologise for the impact of the failings we identified • repay the legal costs they incurred • repay the mileage costs of £103.50 they incurred • pay them £950 to compensate for the non-financial impact of their actions, and • say how it will seek to prevent the same fault happening again (in particular, how it will consider what to do about overpayments that arise from incorrect advice).

3. The events in Mr K’s complaint had a significant impact on him and his family. The RPA’s failing caused the family stress (as they were pursued for overpayments) and they incurred the costs of professional representation. We hope our report will help them with this.