Examination of witnesses (Questions 640
-649)
THURSDAY 12 FEBRUARY 1998
MR DOUG
HENDERSON, MP,
MR EMYR
JONES PARRY
and MS CATRIONA
LAING
640. My sympathies are with the recipient
countries, because imagine negotiating with all these people.
What else do they do the rest of the time?
(Mr Jones Parry) There are also donor groups in
specific cases. There is the DAC arrangement in Paris within the
OECD. Within the Treaty of Maastricht and the provision brought
in for development there is a requirement on the Member States
and the Union to tend to align and co-ordinate their policies.
That is taken forward by discussions within the Union. So the
process is moving forward, but I wonder if this Committee would
really want to see us ending up with a situation where there was
one disbursement of aid on behalf of all the Member States and
the Union, and which was branded as such and did not take account
of national bilateral programmes, national bilateral historical
relations with particular countries. I think we are better edging
towards the situation where there is better co-ordination, where
there is not destructive competition, but where we can get credit
for what each is doing according to individual expertise and tradition.
641. Yes, that is fine providing, of course,
you have not got several member countries' and the European Union's
own programme overlapping and thus destroying or possibly not
enhancing the objective that we are aiming at.
(Mr Henderson) I think also one has to remember
that there are private sector initiatives or non-government-organisation
sector initiatives that are also contributing. It seems to me
to make management sense to try to minimise administration costs
and maximise the effectiveness of the aid. Where there can be
co-operation among all of those who are involved, then providing
co-operation itself does not lead to more costs, I think that
is highly desirable and it should be an aim both of the United
Kingdom and of the European Union.
642. I am sure the Committee would want
to see exactly those objectives enhanced, if not fully achieved.
(Ms Laing) Chairman, could I add two very quick
points on that. The Committee may be interested to know that the
Government working group in Brussels is actually working on operational
guidelines to improve co-ordination amongst the Community as a
whole—that is, Member States and the Commission. Secondly,
I think the trend towards sector programmes is going to go a long
way to helping to improve co-ordination.
643. What does that mean to say?
(Ms Laing) It means that instead of Member States'
bilateral programmes and the Commission looking at individual
projects, trying to encourage the donors to look across a sector
as a whole—for example, the education sector—to do
a full analysis of the sector, and then within that to decide
who can best contribute, for example, to the primary sector within
the Government's agreed objectives for that sector, so that if
you move from a project level up to a sector level, co-ordination
is much, much easier.
Chairman: That is
interesting.
Mr Rowe
644. A central element, of course, of the
effectiveness of aid is the effective auditing of where the aid
actually goes. I think a number of members of this Committee are
deeply concerned about the ineffectiveness of audit procedures
in many aid programmes. I wondered whether this is any part of
the Foreign Office's concern, or whether this is simply a matter
for DFID?
(Mr Henderson) No, we are concerned about that.
Generally towards European Union matters we want to see improved
auditing. Where there is a suggestion that European Union public
expenditure has not been spent on what it is intended to be spent
on, that it has been spent inefficiently or ineffectively, then
there should be some system of redress. That is a general position
we have taken, indeed, in relation to the Treaty of Amsterdam
and other matters, and we would extend that also to aid programmes.
The more money that is effectively spent and is not wasted means
the more money that is available, and I think we would all want
to see that.
645. When you say "redress", redress
to whom? Are you saying that the Member States can claim the money
back from the EU?
(Mr Henderson) In the Treaty of Amsterdam negotiations
we argued that there should be clauses in the Treaty that required
a Member State to pay back. We did not get that agreement from
our other member partners in the negotiations, but we sought that
in the negotiations in the six weeks that we had to conclude the
Amsterdam Treaty. It is a long-term objective that where a nation
state has a responsibility, and for some reason or other it is
not fulfilled, then it has an obligation to compensate. That is
something that we will pursue in the future, but in the meantime
we will be pursuing every avenue we can to improve audit procedures,
including this.
646. So to take the example I work to death
in this Committee, but it was a very striking example, where the
European Union put in an enormous sum of money to produce chickens
in Bihar, all the money disappeared and not a single chicken appeared
on the ground in Bihar, how would redress work in that situation?
(Mr Henderson) I do not know the particular circumstances,
but theoretically one could say why was money authorised that
was wasted or was stolen, or whatever happened to it, and there
was no result of this programme, and that can we improve our structures
to make sure that that does not happen again, before the money
is spent. One way would be staged payments, for instance. That
is a way of making sure that if there is a loss then it is a small
loss, because one only pays as one sees a development of a particular
project. That kind of approach would seem to be one that might
help to redress that situation and prevent a recurrence.
Chairman
647. The Foreign Office has got quite a
lot to learn in this field itself, has it not, judging by the
evidence given to the Public Accounts Committee yesterday by the
Permanent Secretary?
(Mr Henderson) We have probably a lot to learn
in many fields.
648. It does mean a very serious approach
to this matter—that is, to set objectives at the beginning,
before you actually release the money, and establish accounting
practices so that we can actually add up the amount that is being
spent and allocate it to the head of expenditure which you are
dealing with and thereby, of course, be able to assess not just
how much money you have spent, but how far you have achieved the
objective you set out with. Unless that is done, you will not
get control, as you will not in your Jordan Embassy for the same
reasons.
(Mr Henderson) I think there is a need for those
kinds of financial procedures. One should always be trying to
improve the effectiveness of resources, especially where the public
resources are ultimately provided by the taxpayers or whatever.
One should be getting value for money. It is a core point of our
whole approach to public expenditure that that is the case, and
that is including European Union money and including aid programmes.
I would want to see a constant review of how better we can do
these things.
649. I think that is a very good note to
finish on, if we may. Mr Henderson, the Committee is very grateful
to you for spending the time with us this morning and for the
preparation which went into coming to give evidence this morning.
May I thank you and your team very much indeed. You have helped
me also in the Chair by keeping your answers short and correct.
Thank you very much. We look forward to observing and perhaps
commenting on the process that you are going to go through to
get this negotiating mandate, I hope, in very good order before
the end of our Presidency.
(Mr Henderson) Thank you very much, Mr Chairman,
for the chance to be before you. Thank you also for allowing me
to have my two colleagues with me. You will appreciate that my
remit is pretty wide ranging, and I very much rely on their help
and expertise in some of the detail on this.
Chairman: Yes, of
course. Thank you very much.
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