18. STRUCTURAL FUNDS
| (23832)
12325/02
COM(02) 528
| Communication from the Commission to the Council and the European Parliament on the evolution of budget execution of the Structural Funds, in particular outstanding commitments (RAL).
|
| Legal base: | —
|
| |
| Document originated: | 20 September 2002
|
| Deposited in Parliament: | 8 October 2002
|
| Department: | Trade and Industry
|
| Basis of consideration: | EM of 25 October 2002
|
| Previous Committee Report: | None
|
| To be discussed in Council: | Not known
|
| Committee's assessment: | Politically important
|
| Committee's decision: | Cleared
|
The document
18.1
This Commission Communication describes the effects on the Structural
Funds payments budget of Member States' underspends, particularly
in the period 2000 to 2003, and examines why Member States' estimates
were unreliable. It describes an action plan, including simplification
of procedures, to help alleviate the problem.
18.2
Underspends on the 1994-99 programmes are estimated at up to i3.5
billion, and the relevant line in the 2003 Preliminary Draft Budget
assumes a total underspend of i2
billion. For the 2000-06 programmes the cumulative underspend
by the end of 2002 is estimated to be i2
billion.
18.3
As for the reasons for underspends, the document
says that during 2000-02 the closure of the 1994-99 programmes
and the start of the 2000-06 programmes overlapped. When forecasts
for 2000 and 2001 were requested it was assumed both that most
payments would be under the 1994-99 programmes and that the new
programmes would begin on time. But, because of new and more complex
procedures, closure of the 1994-99 programmes was slower than
expected. Approval of the 2000-06 programmes was delayed, hence
forecasting of expenditure was difficult. The Commission states
that it was possible to claim expenditure retrospectively under
the 2000-06 programmes, that is to make claims prior to programme
approval for work undertaken from 1 January 2000. However most
Member States did not adopt this practice.
18.4
In its action plan, which it hopes will help to make
the pattern of future payments more regular, the Commission is
proposing to:
— continue trying to simplify procedures;
— complete the major part of negotiations
on programmes for the candidate countries before their accession,
to facilitate timely start-ups and to put to good use the experience
of the present Member States;
— maintain the N+2 rule, which would de-commit
(cancel) any approved programme which does not give rise to a
payment claim within two years of the year of allocation, so that
the effectiveness of the rule in imposing discipline can be properly
judged;
— alert Member States about programmes
in danger of cancellation under the N+2 rule, and help Member
States find solutions to the obstacles encountered in implementing
programmes;
— promote best practice in forecasting
expenditure at programme level;
— examine the possibility of penalties
for submitting late and/or unrealistic forecasts;
— present to the Budgetary Authority each
autumn an analysis and appraisal of expenditure forecasts;
— close all outstanding pre-1994 programmes
and projects, except those suspended for judicial reasons, by
the end of 2002 and close most 1994-99 programmes by the end of
2003.
18.5
The document notes that the UK has been amongst those
Member States with a bad record on under-spending during the period
under review and at risk of losing funds.
The Government's view The Government's view
18.6
The Minister of State for Employment Relations, Industry
and Regions, Department of Trade and Industry (Alan Johnson) tells
us the Government finds this an informative document, with which
it agrees. It thinks the Commission's approach to the problem
reasonable.
18.7
The Minister also tells us that more recent monitoring
of the UK programmes shows a very low risk of any funding loss
in December 2002.
Conclusion Conclusion
18.8
This Communication is informative and helpful
on how to alleviate the problem of underspends and the consequent
risk of loss of the funding available to Member States through
Structural Funds programmes. We are content to clear the document.
| 
