Spelman denies conflict over business links

DEFRA secretary Caroline Spelman has denied a conflict of interest after it emerged that her husband helps run the company in charge of the £350m-computer system at the Rural Payments Agency.

Mark Spelman is a managing director at Accenture, the firm that developed the much-criticised system that delivers Single Farm Payments.

Initially a seven-year contract worth £35m in 2003, the cost of the IT system has since spiralled to £350m.

The agreement – made while the Tories were in opposition – is due to expire this year. But Mrs Spelman now finds herself in charge of the government department that will ultimately decide whether Accenture’s contract should be renewed.

Speaking this week to Farmers Weekly, Mrs Spelman insisted she had nothing to hide. “My husband works for a very large company and I want to make sure that my interests are dealt with absolutely in the correct way,” she said.

Mrs Spelman said she had informed DEFRA permanent secretary Helen Ghosh about her business interests.

“I will make absolutely sure that the way I handle all of them is completely in line with the ministerial code. There is no conflict of interest.”

In one of its most damning reports ever, the government’s public spending watchdog last year called for the RPA computer system to be scrapped.

“The IT system does not meet the scheme’s needs,” said a National Audit Office report last autumn.

But ditching it could be easier said than done. “Without any alternative system to fall back upon, the agency appears to have little choice but to continue with the existing IT systems in the short term,” said the NAO report.

More than 100 Accenture contractors were employed at the RPA on salaries of more than £200,000 each during 2008/09. This spring, then DEFRA secretary Hilary Benn ordered the agency to slash costs and improve the service it gave to farmers.

Targets included reducing administration costs by 10%, paying more subsidies on time and reducing the cost to the taxpayer for each application. The RPA business plan for 2010/11 states that the agency will review and change its processes.

The revelation came just after questions were raised over Mrs Spelman’s past involvement with Spelman, Cormack & Associates – a biotech lobbying firm she set up in 1989 with her husband.

Less than a year ago, she transferred her shares in the firm to her husband before resigning her directorship. Mrs Spelman has again denied a conflict of interest, although the firm continues to trade under her maiden name, Cormack.