18. BUDGET 2003
Letter of Amendment No. 2 to the 2003 Preliminary Draft Budget.
|Legal base:||Article 272 EC; the special role of the European Parliament as set out in the Article; qualified majority voting
|Document originated:||18 September 2002
|Deposited in Parliament:||7 October 2002
|Basis of consideration:||EM of 22 October 2002
|Previous Committee Report:||None; but see (23621) : HC 152-xxxvi (2001-02), paragraph 2 (10 July 2002) and (23676) 11056/02, (23717) 11287/02 and (23844) : HC-xxxviii (2001-02), paragraph 10 (16 October 2002)
|Committee's assessment:||Politically important
18.1 The Commission's Letter of Amendment No 2 to its
Preliminary Draft Budget (PDB) for 2003 sets out three changes
to Section III of the Community Budget.
18.2 The first change establishes a new budgetary structure
to accommodate three Commission administrative offices: a Paymaster
Office, an Infrastructure & Logistics Office in Brussels and
a Infrastructure & Logistics Office in Luxembourg. In order
to fulfil Article 172 of the new Financial Regulation, these new
offices will be delegated separate administrative budgets.
18.3 The Commission proposed this change as part of its
wider aim of establishing a balance between its tasks and its
resources. In this case, the Directorate General for Personnel
& Administration considered delegating administrative and
implementing tasks to specialised public/private-sector bodies
and decided it should focus on core activities (personnel policy,
health and safety, information and communication technology) whilst
day-to-day management should be delegated to these new autonomous
18.4 The second change is the insertion of two new budget
lines which, if required, would accommodate appropriations for
the proposed European Solidarity Fund for disaster relief. The
budget lines would carry token entries and would be endowed by
means of an amending budget, in the event that the fund was mobilised.
We scrutinised and cleared the proposal for the European Solidarity
Fund last month.
18.5 The third change involves a restructuring of revenue
and expenditure lines to reflect the requirements of the new Financial
Regulation, which we cleared last April.
It reduces the number of cases where there can be virement. This
accords with the principle of "universality"(i.e. not
spending more than previously authorised) and will increase transparency
in the Budget.
The Government's view
18.6 The Financial Secretary to the Treasury (Ruth Kelly)
tells us that the Government supports these changes to the Budget
structure and that there are no implications for UK public expenditure.
She says also:
"There are no financial implications from this proposal.
The first change (creation of new administrative offices) is budget-neutral
and in the medium/ longer-term, should create budgetary savings
(through the use of new contract agents and inter-institutional
co-operation). The second change (creation of new budget-lines)
will only require appropriations in the event that the proposed
EU Solidarity Fund is mobilised. The third change (replacement
of 're-use' with 'assigned' revenue) is budget-neutral and improves
the transparency of the budget framework. There are no implications
for UK public expenditure."
18.7 We note the Government's support for these changes
and the Minister's assurance that they have no implications for
UK expenditure. We are content to clear the document.
(23780) 11685/02, (23786) - SEC(02)960 and (23787) - COM(02)514;
see HC 152-xxxviii (2001-02), paragraph 29 (16 October 2002). Back
(23151) 5017/02; see HC 152-xxiii (2001-02), paragraph 13 (10
April 2002). Back