Management failures at a Whitehall agency have forced it to take on extra staff when it had been expected to cut jobs as part of the government's efficiency drive, and added £387m to the cost of a new scheme for paying subsidies to farmers in England.

A report from the National Audit Office said the Rural Payments Agency, part of the Department for Environment, Food and Rural Affairs, had planned to cut 1,800 of its 3,950 staff, the lion's share of the 2,400 posts due to go at Defra following the Gershon Review.