Analysis: Missed warnings and panic spending - how foot-and-mouth overwhelmed officials

National Audit Office reveals the true scale of a crisis that drove the Government to breaking point and cost the nation £8bn

The most far-reaching report into last year's foot-and-mouth epidemic has revealed the logistics and huge cost of responding to the crisis that devastated the livestock and tourism industries.

The investigation by the National Audit Office, published today, shows ministers ignored important parts of an internal report warning of the potential spread of the disease just two years before the huge outbreak.

As well as the missed warnings, it paints a picture of a Government driven to breaking point, and vast and inflated costs during a crisis that cost the taxpayer £3bn and lost the economy £5bn.

The NAO said ministers ignored warnings as recently as 1999 that given "the speed at which foot-and-mouth disease might spread, the State Veterinary Service's resources could quickly become overwhelmed, particularly if a number of separate outbreaks occurred in separate locations at the same time".

The 133-page report also provides astonishing evidence of the vast cost of the outbreak and calls for a fundamental review of the way plans for emergencies are drawn up. Forensic accountants have already investigated invoices worth £474m submitted by 107 contractors while payments worth £42m are still being withheld.

Auditors found that officials abandoned normal controls over spending – often paying many times the normal market rate for services and equipment – as they scrambled to deal with the outbreak.

Edward Leigh, chairman of the Commons Public Accounts Committee, condemned the Government's planning for its "complacency and lack of foresight". He said: "It is hardly surprising that when the Government tried to tackle the outbreak they were initially overwhelmed by the task. They were painfully slow in taking what turned out to be much needed measures."

Sir John Bourn, the comptroller and auditor general, said there were "lessons to be learned for the whole of government from the foot-and-mouth crisis".

Despite warnings inside the department in 1999 about the potential for a foot-and-mouth outbreak to spread, a review by Jim Scudamore, the Chief Veterinary Officer, in July 2000 found that "key issues had not been resolved".

The NAO said: "The department had not had time to address fully the slaughter and disposal of carcasses, training of staff in preparedness for an outbreak, the updating of existing contingency plans and epidemiological capacity to deal with investigations about the spread of the disease if there were an outbreak."

The report revealed that at least 57 farms had already been infected by the time foot-and-mouth disease was confirmed at an abattoir near Brentwood, Essex, on 20 February. But ministers waited three days before imposing a national ban on animal movements, something which academics estimated could have reduced the outbreak by up to half.

The Government's contingency plans envisaged no more than 10 cases. The impact on tourism and other non-farming businesses was not considered and the logistics of dealing with a worst-case foot-and-mouth outbreak were not known.

The scale of the task faced by the Ministry of Agriculture, Fisheries and Food, as it was known then, was "monumental". Normal financial and accounting rules were abandoned. Contracts worth millions that would normally take weeks or months to negotiate were concluded in hours.

The report said: "The Department's overriding priority was to eradicate the disease. Ministers issued instructions that any obstacles to achieving this objective must be removed. Speed was paramount and cost was of secondary importance. Ministers believed that best value for money would be achieved by eradicating the disease as quickly as possible."

Railway sleepers bought for up to £20 each were worth as little as £1 after the outbreak. Surplus coal, bought for £130 a ton, was worth just £15 a ton after the crisis was over. The cost of cleaning and disinfecting varied wildly across the country, with some contractors charging up to £27.50 an hour.

Generous compensation payments to farmers inflated costs, while standard rates for animals, introduced to speed up claims, simply inflated prices still further by introducing minimum valuations. Welfare compensation payments were pitched above market rates.

But the NAO report praises the veterinary service for stamping out the disease within two months, at least in some areas of the country. Maff officials worked with "application and commitment" to defeat the disease and "did well" to contain the outbreak and prevent it spreading to pig-breeding areas such as East Anglia.

But an analysis of Maff's efforts to cull infected animals in the early days of the outbreak point to severe problems with the battle to contain the disease.

A crucial turning point in the crisis was the decision – based on advice from a working group of leading academic epidemiologists, to cull infected animals within 24 hours of diagnosis and remove neighbouring herds within 48 hours.

Before 27 March, when the target was imposed, only 14 per cent of premises were cleared within the deadline. After 27 March that figure leap to 51 per cent. The figures tell the same story about the huge "contiguous" cull at farms adjoining infected premises. Before 27 March only 5 per cent of herds were slaughtered by the two-day deadline. Afterwards, the figure rose to 34 per cent.

In total, 1.2 million animals were killed on farms neighbouring confirmed cases of foot-and-mouth. That huge cull was defended by scientists and vets as essential to prevent the rapid and uncontrollable spread of the disease from field to field and farm to farm. But figures from the NAO confirm that about 800,000 animals died in vain – an estimated 70 per cent of those killed in the contiguous cull were disease-free.

The human cost for those carrying out and administering the operation was huge. Officials suffered exhaustion, nightmares, anger and frustration.

Maff is criticised for its failure to bring in the Army at an early stage. It was the military commanders who helped to "turn the tide".

Timeline

19 FEBRUARY 2001: Routine inspection at abattoir in Essex finds signs of foot-and-mouth in 27 pigs

20 FEBRUARY: Maff confirms the outbreak. Exclusion zones imposed around abattoir and two farms that supplied the pigs. Virus found at Essex farm

21 FEBRUARY: All exports from Britain of live animals, meat and dairy products are banned

22 FEBRUARY: Cattle farm in Essex produces third case

24 FEBRUARY: First mass slaughterat eight farms

25 FEBRUARY: Outbreak reaches Devon. Countryside Alliance postpones its protest march. Sporting events postponed

2 MARCH: First outbreaks in Northern Ireland and Scotlandtake number of cases to 40. Army called in to organise the cull

3 APRIL: Tony Blair delays local and general elections

10 AUGUST: Three separate inquiries announced

19 AUGUST: Number of slaughtered animals reaches 3,750,222. Lost trade estimated at £250m.

3 SEPTEMBER: Number of confirmed cases reaches 2,000

30 SEPTEMBER: Last recorded case in Britain at Appleby, Cumbria

14 JANUARY 2002: No outbreak for three months. UK declared disease-free