Farmers are still receiving incorrect subsidy payments despite major IT investment to rectify the fault, says a Public Accounts Committee (PAC) report this week.

The single payment scheme was set up by the Rural Payments Agency in 2005 to efficiently distribute EU subsidies, but IT faults resulted in farmers receiving an extra £20m in 2005 and £17.4m in 2006.

The faults added £50m to the £250m cost of the agency’s business change project through which the scheme was implemented.

Farmers are frustrated because government timetables for repayments of overpaid subsidies are unclear.

“Restoring farmers’ confidence will depend on improving business processes and IT systems so it can process claims efficiently and tell farmers when they will be paid,” said PAC chairman Edward Leigh MP. The failings could lead to hundreds of millions of pounds of fines from the European Commission.

The agency remains unable to offer adequate advice to farmers on the progress of their claims, said the report.