Examination of Witness (Questions 94 -
99)
THURSDAY 6 JULY 2000
THE RT
HON CHRISTOPHER
PATTEN
Chairman
94. Good morning, Mr Patten. We are very grateful
to you for taking the time to come and talk to us.
(Mr Patten) Can I apologise first of all for the fact
that I am not able to spend longer with you. I am in between negotiating
telephone calls with the Egyptian Foreign Minister about whether
they will sign an association agreement with us. Patrick Child,
however, is much cleverer than I and knows this subject backwards.
I am very keen that you should have any written factual information
you require so at the end of the meeting if there are things you
have not got which you want, just say. Can I say two or three
things at the outset? I come to this issue with quite a lot of
interest and quite a few prejudices because, as Minister for Overseas
Development in the eighties, I begin by being interested in the
subject, but secondly, it touches on what I think is the biggest
issue for the Commission, not whether the Commission should do
more but whether it should do what it is already responsible for
doing much better. I think that in the reform of the Commission,
which Neil Kinnock is driving through with considerable energy
and e«lan, the reform of our delivery of external assistance
is absolutely crucial because as far as many people are concerned
it is a flagship and because it has more effect internationally
on the European Union's reputation than any of the important more
technical issues, like activity based budgeting, that affect what
happens here in Brussels. For me there is one big conceptual issue
and there is one big management issue. The conceptual issue is
this. People very often talk about our external assistance as
though it was all traditional ODA and that is not true. The proportion
of our external assistance which is traditional ODA has been declining.
It has been declining as we have found ourselves spending more
in Central and Eastern
Europe, as we have found ourselves spending more
in the Balkans for example.
95. Or the Mediterranean.
(Mr Patten) Or the Mediterranean, where some of it
is ODA and some of it has other purposes, for example in Egypt,
and this association agreement is germane to this. In Egypt we
have big health and education sector programmes both of which
are worth about 100 million euros. We have got a 250 million euros
industrial modernisation programme which you would not describe
as official ODA (at least I think you would have some difficulty
doing so) even though it might in due course have effects on economic
development and so on. The part of our programme which is really
developmental has to be more poverty orientated and that is something
to which we are totally committed. It is something we have put
out in a Commission communication, and I have no doubt at all
that that has to be the way we push things. There are some political
consequences of that, for example, if you are pressing for more
orientation on poverty alleviation, what does that say about your
programmes in Latin America where there is not an LDC? What does
that say about the balance between Asia and Latin America? I just
wanted to make that conceptual point at the moment. Even though
what we do in Kosovo may help poor people it is not ODA in the
sense of what we are doing through the EDF. The management point
is for me fairly clear. We have seen a trebling by and large of
our external assistance, that is, central and eastern Europe,
the Balkans, plus ODA and so on, over the last few years. A consequence
of that is that today we spend twice as much in Poland preparing
for accession as we spend in Latin America and Asia combined.
Maybe that is the right priority but maybe it is not the right
priority, but that is the situation which we inherited. While
external assistance has trebled there has been very little increase
in the number of people managing it, so Poul Nielson and I find
ourselves with about 2.9 people to manage every 10 million euros
of assistance, I think the latest figure is, in comparison with
the Department I know best in the official development world,
DFID, which has 6.45. The figure for the Member States runs between
four and nine. To some extent the Commission has got round that
problem in the past. Heads of government commit us to spend 250
million on Operation Mitch. We have not got any staff to deal
with it, so what do you do? You establish a bureau d'assistance
technique, a TAO.
96. Which is in fact a contractor, is it not?
(Mr Patten) Yes. There are 80 of those employing about
800 people at a cost of about 200 million euros. The system has
been rightly criticised for being largely outside proper budgetary
and political control. Therefore when I look at reorganising the
way we do things, that is quite central to my thinking. What is
also central to my thinking is that at present we have to run
an aid programme with Member States wanting to micro-manage every
national programme rather than agreeing a strategy and then letting
us manage, with all sorts of procedures regarding procurement
and contracts which were frankly I think often devised in order
to try to enable Member States to get a bigger share of the action
for their own companies. All those problems make it a wonder that
we manage anything at all. What do we want to do? First of all
we want to enhance the quality of our programming. We want to
focus on programming in the Commission in the political Directorates-General,
my Directorate-General and Poul's. We want to establish a quality
support group with the secretariat in Poul's DG which will ensure
that our programme is of the highest quality and ensures that
evaluation feeds back into our programming. We then want to have
all the implementation, once the programming is agreed, in a separate
organisation which we want to call Europe Aid but it could be
called anything—Royal Opera House. We have that organisation
based on our existing SCR and it does all the implementation,
programming with us, agreed jointly. At the same time we want
to wind up the technical assistance offices, pretty well all of
them over the course of the next year. But that leaves us the
problem of managing what they manage already. I am sufficiently
politically experienced to know that if I simply go to Member
States and say, "We want another n hundred people
permanently on our staff", they are going to tell us to get
lost. So what we are proposing is that we should use the operational
credits which are available in the budget to take on contracted
staff to work for Europe Aid. Does that just mean transferring
people from the technical assistance offices to Europe Aid? No,
because we think that we can actually deliver what the TAOs are
doing already with fewer people than they are doing it. I am having
to go and justify that as part of an exercise right across the
Commission which is looking at staff numbers. It does not involve
any breach in budgetary principle or concept since we already
use operational credits for employing people out in our delegations
for managing projects and we already use operational credits for
some people who are contracted to work for us. Having done that
(and we have started by making this proposition with MEDA) we
want to focus input from Member States on programming and country
programmes rather than on micro-management. With MEDA for example
we have said to the Member States, "Look; we will agree the
strategy for each country with you, but at the moment you insist
on dealing with every single project". What is the result?
The result is that they deal with 60 projects a year and 80 per
cent of them in the last three months, so it may not surprise
you to know that if we continued at the present striking rate
with MEDA without making any changes it would take us eight and
a half years to get through the backlog of commitments in the
Mediterranean. It is madness. Overall, when I started to dig into
this, we discovered that our overhang of commitments—that
is not money swilling around; that is commitments we have made
but which have to be paid for in each financial year and it is
because of the rather French way in which the Commission budgets,
in that you have both commitments and payments and they are treated
separately—of 21 billion euros in external assistance—it
is called the reste a« liquide«—which would
take us four and a half years to get through. There are some areas
where it is worse than that: eight and a half years for the Mediterranean,
seven years for Asia, six and a half years for Latin America.
One of my earliest visitors was a foreign minister from the Magreb
who pointed out how often my predecessors had been to see him.
I said I was not going to come so much because I was responsible
for the whole world and there were quite a lot of diary obligations,
and he said, "Don't worry. We will quite understand it if
there are longer gaps between visits by commissioners, but what
we would like is if there could be shorter gaps between what was
promised when commissioners came and what was actually delivered."
That is by and large what my/our political objective is. I do
not blame our staff in the office who work incredibly hard with
awful procedures in insufficient numbers, but what we have to
focus on is the procedures and the number of people who can manage
the programmes. There is another thing on which we have to focus,
which is the relationship between how much we spend and what our
political priorities are. I made a presentation to foreign ministers
in the General Affairs Council on our budget six weeks ago, and
it was the first time that there had ever been a discussion on
the budget in the General Affairs Council.
97. Extraordinary.
(Mr Patten) There may be perfectly good reasons why
we spend twice as much in Egypt as we do in Russia. There may
be very good reasons for that but I am not sure that Ministers
have ever made the judgment. There may be very good reasons why
we spend significantly more in Central America than we do in the
Caucasus and the Central Asian Republics combined. There may be
extremely good reasons for that but I am not sure that Ministers
have ever sat down with the Commission and actually reached that
conclusion. What we are trying to do now—and this is a Commission
proposal—is to build into the agenda of the foreign affairs
ministers every year in the spring a discussion about budget priorities
so that we can then go away and prepare a budget accordingly.
At the moment what happens, as you can imagine, is that every
proposal one makes for a cut here in order to allow an increase
there is resisted by a different group of countries or a different
group of MEPs.
98. Thank you very much indeed for that overview.
That is very useful indeed to us. As you know, this Committee
has taken a fairly jaundiced view on the evidence that we have
collected in a recent report, now 18 months old, of the governance
here.
(Mr Patten) I read it when I was briefing myself for
this job.
99. Now, because you have begun to make a move,
we need to see what changes are possible and desirable. This is
why we wanted to come today to talk to you in greater detail.
One of the things that you have been putting forward in your communication
was that you thought you ought to do less and do it better. What
that implies is that we should scale back some of the assistance
programmes. I wondered whether you had that in mind. Secondly,
the micro-management question: it is quite clear that decisions
are being taken in Brussels by Member States which should actually
be delegated to your offices on the ground in the field, and that
implies either employing extra people locally or employing people
from Brussels and seconding them out there. How are we going to
manage that? It seems to me that you have to get to a position
where you have got the general thrust, the programme set out,
agreed by the Commission and the Member States, and then let the
people on the ground do it but make certain of course that it
is good quality that they are producing. How are we going to get
into that position?
(Mr Patten) Let me clarify exactly what I said. I
said this: "If you want us to spend this sort of money and
spend it well, then we need the resources to do it. But if you
do not give us the resources then I am going to come back to you
and say we will have to do a lot less, because what I cannot do
is to guarantee higher quality and faster delivered programmes
with exactly the same resources as we have at the moment."
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