EU report ‘underlines reform case’

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Published: Wednesday 5th November 2014 by The News Editor

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An official report which found that up to £7 billion of the European Union (EU) budget is mis-spent and criticised a focus on “getting funds spent” rather than securing results underlines the need for significant reforms in Brussels, Downing Street has said.

As the Government continues to fight a demand for an extra £1.7 billion contribution from the UK, the European Court of Auditors (ECA) issued another scathing assessment of the handling of the £117 billion budget.

It put the “error rate” – European taxpayers’ money wrongly spent via the EU – at between 3.5% and 5.9%, a total of somewhere between £4 billion and £7 billion.

The court complained that the entire 2007-13 budget process was “too focused on just getting funds spent and needs to place more emphasis on achieving results” – because of a “use it or lose it” approach.

Systems for choosing which projects to support ” focused first on disbursing the EU money available, secondly on complying with the rules, and only then – and to a limited extent – on results and impact”, it said.

“The European Commission and the member states must pay more attention to how they spend our taxpayers’ money,” ECA president Vítor Caldeira said as he presented findings that will intensify pressure to further cut EU spending.

Prime Minister David Cameron’s official spokesman said: “Is this further evidence of the importance of going further in reforms of the EU and EU budget accountability? Absolutely it is.

“It is one of the many reasons why the Prime Minister has sought to reduce the EU budget.”

Chancellor George Osborne will meet fellow EU finance ministers on Friday to discuss the initial results of discussions between national and EU officials over the shock demand for a huge additional sum.

He says he is “confident” of securing a cut after Mr Cameron declared the UK would not pay “anything like” the sum being demanded by the European Commission – which critics claim amounts to a tax on Britain’s economic success.

The ECA found there had been no progress since last year in tackling the vast sums being paid out in breach of the rules, with the worst affected areas being regional policy, energy and transport, rural development, environment, fisheries and health.

It welcomed Commission efforts to track down and deal with errors, suggesting the rate would have been almost a third higher without them, and noted that spending jointly controlled by member state was more error-prone than that overseen by the Commission alone.

Typical errors, it said, included subsidiaries of large firms wrongly claiming cash meant for small businesses or extending public contracts without any chance for other firms to bid for the work.

Published: Wednesday 5th November 2014 by The News Editor

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