ANNEX C
PRESS INFORMATION FROM BRITISH CONSULTANTS
BUREAU
BRITISH FIRMS
SUFFER CASH-FLOW
PROBLEMS THROUGH
BRUSSELS INEPTITUDE
Very substantial delays, some well over 120
days are occurring in the payment by Brussels of a large number
of outstanding invoices and this is threatening the health of
consulting companies. The British Consultants Bureau (BCB) whose
members operate in virtually every country of the World has complained
formally to the Government. Consultants and many other firms,
involved in the provision of Services and Goods to countries throughout
the former Soviet Union under the terms of the Tacis External
Development Programme, are waiting an unacceptably long time for
their money and as a result experiencing severe cash-flow problems.
BCB's Executive Director Colin Adams says "It
is ironic that at the same time as the Commission demonstrates
a woeful inability to pay its bills on time, MEPs in Strasbourg
should be insisting that Member States pay their debts within
60 days or face fines".
Since 15 May 1998 the Tacis Accounts Department
has apparently handled few of the new invoices which have been
presented for payment. Brussels regulations demand that payment
must be made to firms within 60 days but with a target of 30.
Moreover any invoices not paid within 60 days attract interest
of 6 per cent. This means that a large amount of British Taxpayers'
money, earmarked for development assistance, is now being wasted
on interest payments simply to cope with Brussels bureaucratic
inefficiency. Clearly a 6 per cent interest payment does not equate
to the cost of a company having to borrow money in this country.
One particular BCB member firm is owed well
over £180,000. Others have had various invoices delayed by
105, 114, 126, 198 and 209 days respectively. On one project for
which an advance had been agreed it was paid 168 days later—1½
months after the project was completed.
The Tacis Accounts Office has been described
as totally chaotic—with manning approaching the skeletal.
Filing cabinets were stuffed full of outstanding invoices. Following
the Commission's summer break, these are now in crates awaiting
an office move. Thus even further delays can be expected!
Another point of contention for BCB is that
all such invoices have to go through a process of 20 steps including
being verified by two other EU Departments—DGs XIX and XX.
DG XX insists on receiving invoices in batches of 50. Hard luck
on invoice number one waiting for another 49 to be processed.
Colin Adams feels that "working overseas
on projects which are often in difficult political and physical
environments requires a great deal of determination. The motivation
of British consultants, whose members in BCB alone achieve fee
earnings overseas of almost £2.6 billion annually, is severely
undermined when the EU adopts procedures that are unbelievable
bureaucratic to the point of being unfair".
There are other examples:
— One BCB member firm, a management
consultant, has had agreed staged payments of well over £80,000
during a project unacceptably delayed.
— Last year a sub-contractor of an
engineering consultant was forced into liquidation. the parent
consultant has now been put off totally from applying for new
Tacis work.
— Another BCB firm, has described this
part of the Brussels bureaucracy as being "oblivious to
commercial realities facing firms who are more often treated as
`the enemy' rather than as partners".
In fairness the Commission is trying to do something
to put its house in order by the creation of a central unit, known
as the "Service Commun Relex" a body which will oversee
the letting of contracts, verification and payment for all external
aid-funded projects. This new body will have its work cut out
to deal with this enormous backlog of invoices and institute a
system of timely payment.
Colin Adams concluded, "the British
Government, particularly the DFID would appear to be strongly
behind the protest that BCB is making and representation is already
being made to Brussels. It will be a great feather in Clare Short's
cap if something positive is done by the new SCR organisation
to resolve this bureaucratic nightmare of which Franz Kafka could
be justly proud!"
[Note on Tacis Programme]
The Tacis Programme is an EU initiative to help
newly independent States of the former Soviet Union move away
from centrally planned to market economies. It is the leading
aid programme (over EC ECU 500 million annually) to NIS States
(not Baltics) and Mongolia.
British Consultants Bureau
17 September 1998
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