Tuesday, 11 November 2008

How many years is too many?

As trailed in September, the EU Court of Auditors (ECA) has for yet another year seriously criticised the 'legality and regularity' of the EU's accounts.

The ECA's latest report into the EU's 2007 spending marks the 14th year in a row that auditors have revealed major failures in how the EU manages the huge sums of public money for which it is currently responsible.

Every year Britain stuffs an average £10.2bn of public money into the EU's leaky pot. That's money otherwise denied to schools, hospitals, fighting crime or poverty, or which could make a real difference to people's lives in many other areas.

Like funding tax cuts, without hiking borrowing even further.

Despite this long EU record of lax spending controls, earlier this year a majority of MPs - mainly Labour helped by the SNP and Plaid Cymru - approved an unjustifiable 63% increase in our payments into the EU's budget, giving up £7bn of Britain's rebate in the process.

Even without the subsequent worsening of the credit crisis, this was monumental irresponsibility with public money on the part of our 'representatives'.

Failing policies

According to Open Europe, the EU budget is dominated by two failing policies: the Common Agricultural Policy, and the so-called Structural Funds.

In the area of agriculture spending, out of 196 transactions of subsidies auditors examined, 61 were affected by error, with 40 of those errors (two thirds) classified as 'serious'.

In the Structural Funds budget, which was worth £37bn (€45.5bn) in 2007, 54% of the funded projects were found to contain "errors".

As the former Commission chief accountant Marta Andreasen - sacked by Neil Kinnock for revealing financial mismanagement at the heart of the European Commission - writes in The Times; "What the auditors have been saying for years is that most of the payments made by the Commission from its £70 billion-a- year budget cannot be deemed legal or regular. That is, that they cannot confirm those payments have been made to the correct person for the correct purpose and for the correct amount."

Waste and fraud

Andreasen goes on to say, quite rightly: "It stretches credulity to insist, as the Europhiles do, that this does not mean that there is fraud."

Of course, the evidence is all around us. Almost every week there is a new example of EU waste or fraud, and to illustrate the point Open Europe have published (pdf file) '100 examples'.

One of the worst recent examples was the news that, despite governments across the world tightening their financial belts and re-focussing their budgets on measures to support their economies, the EU next year wants to splash £6.3bn (€7.8 billion) promoting itself as a “global player”.

The Times tells us that £243m (€300m) of this will be spent on EU "embassies" and a near £11.3m (€14m) on an “information” budget to help "sell Europe’s new role as a global heavyweight."

For the EU to be considering spending such huge sums on propaganda and institutional self-aggrandisement while Europe heads into recession exhibits a neo-feudal arrogance that is the inevitable result of a body having access to huge funds with such little accountability.

Media whisper

Yet despite this gross waste of money going on right under our noses - and in the context of government borrowing going through the roof and cuts to public services threatened - where's the outcry in the national media?

Can the shameful routine of the EU's audit have caused them to lose their perspective over this issue and, in their apparent boredom, let the public down?

Now is certainly not the time to let serious financial waste go unpunished.

As for MPs, how many years of the EU failing its audit and billions going to waste is too many for them to tolerate? Fifteen years? Twenty?

Labour MPs have made clear where they stand. Most (by no means all) are quite happy to hand over more and more of your money to the EU regardless of the annual routine of auditors being unable to explain how the majority of that money is being spent.

Most also remain unable to grasp the simple concept that excessive spending in one area will cause cuts in other, perhaps more important, areas. Too many MPs seem to operate on the fantasy basis that public funds are unlimited, allowing them to splash what they like on the EU without consequence for public services.

However, come the next election, when they have to justify their choices to the rest of us in the real world who know how finite budgets work, they will not be able to avoid personal responsibility for the local public service shortfalls or cuts caused by their irresponsible spending on the EU.

But perhaps more importantly these days, what would the Conservatives do about it?

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