THE FUTURE OF THE EC DEVELOPMENT BUDGET
EXECUTIVE SUMMARY
1. This Report includes important new information
as to how the European Community directs the greater part of its
external action budget away from the poorest people of the world.
The external action priorities of Agenda 2000, a
document produced by the Commission outlining its proposals for
policy priorities over the next seven years, involve an unacceptable
neglect of the needs of the poorest countries of the world.
We do not consider it acceptable for the Community
to decide on the total amount to be spent on 'external action'
for the next seven years without any commitment as to how much
will go to the poorest. We recommend that the Financial Perspective
include for Category 4 (external action) a commitment to a proportion
being spent in low income countries. The current average for member
state aid, 62 per cent, should be the minimum percentage acceptable.
Thirty per cent of the budget of the Department for
International Development (DFID) is spent not by the Department
itself but by the European Community.[1]
In December 1998 the Department for International Development
published its Institutional Strategy Paper on the European Community.
Many of the criticisms made by DFID, both in its Institutional
Strategy Paper and in evidence, are also made by the Committee
in this Report.
During 1999 the Community will have agreed its Financial
Perspective, setting development expenditure for the next seven
years, from 2000-2006, as well as a number of multi-annual expenditure
envelopes for particular development programmes. Decisions taken
in the next few months will determine the character and effectiveness
of EC development policy for several years to come.
The excessive underspends in so many of the external
programmes reveal a Community unable to manage and disburse its
resources but unwilling for political reasons to take the necessary
budgetary action. In the light of such underspends, we agree with
the Government that there should be no increase in Category 4
funds in the new Financial Perspective. The Commission should
concentrate on managing its current level of funding and on distributing
those funds more generously to the poor.
We are concerned that the creation of the new Common
Service Directorate (SCR), and the separation of policy and implementation
which it involves, may further erode the already fragile link
between evaluations and future programme design. Evaluations should
not, however, only influence future programmes, but also future
budgets. We recommend that all future budgetary proposals for
development programmes include an account of past overspends and
underspends, and of all relevant evaluation reports with a detailed
justification of the funds proposed in the light of this information.
The only way to ensure that development priorities
receive due attention in future discussions surrounding budgetary
allocations is to create a separate Directorate-General for Development,
with exclusive responsibility for all official development assistance.
This Directorate-General should introduce all those tools of accountability
taken for granted in other organisations: a comprehensive and
detailed policy statement; an annual report; a transparent budget
and a European Commission document equivalent to 'British Aid
Statistics'.
Recent fraud allegations have undermined the reputation
of the EC. Now more than ever, public attention is focussing on
how much the EC spends, on what and why. This Report tells the
story of an external assistance budget unfocussed, uncoordinated,
ineffectively implemented, and, to use the words of the Secretary
of State, "skewed quite dreadfully against the poorest."
This too is a scandal and it has been accepted for far too long.
We have made recommendations in this Report which call for a fundamental
reform of the structure of this budget, its management and the
policies which underpin it. Political convenience and particular
interests can no longer be allowed to bring the EC development
budget into disrepute. The changes we propose will not only repair
the Community's damaged reputation in development but, more importantly,
give help to those who genuinely need it, the poor of the world.
A more detailed summary of our conclusions and recommendations
can be found at the end of this Report.[2]
1 Evidence p.2 Back
2 pp
xxxvi-li Back
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