29 Environmental projects in the candidate
countries
| (24623)
Special Report No. 5/2003
| European Court of Auditors' Special Report No.5/2003 (pursuant to Article 248(4), second subparagraph, EC) concerning PHARE and ISPA Funding of Environmental Projects in the Candidate Countries together with the Commission's replies.
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| Legal base | — |
| Department | International Development
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| Basis of consideration | Minister's letter of 20 September 2003
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| Previous Committee Report | HC 63-xxx (2002-03), paragraph 4 (16 July 2003)
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared, but further information requested
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Background
29.1 The objective of the audit which is the subject of this Special
Report from the European Court of Auditors (ECA) was to assess
the effectiveness of assistance given under the PHARE[60]
and ISPA[61] programmes
to the environment sector in the ten candidate countries of Central
and Eastern Europe[62]
between 1995 and 2000.
29.2 When we considered the document on 16 July 2003,
we asked the Minister to provide a short summary of the Commission's
replies to the European Court of Auditors and to comment on them.
We also asked her to comment on whether any of the lessons to
which the ECA drew attention had already been learnt by the Commission,
whether the Court's recommendations were being acted upon and
whether the lessons learnt had wider relevance. We asked if the
Minister was content that steps had been taken to improve any
structural deficiencies within the Commission or to review any
constraints within which it operated.
The Minister's letter
29.3 The then Secretary of State (Baroness Amos)
replied as follows:
"The Court's recommendations fell into three
broad categories: the need for more institution building, the
need to have more effective targeting of grant financing and the
need to improve the absorption capacity of the candidate countries.
"The Commission pointed out that the report
concerns only the first year of ISPA programming and PHARE under
its new guidelines introduced in 2000. As such many of the concerns
raised by the report have already been addressed or are being
addressed and the lessons to which the report draws attention
are being learned. In addition wider structural problems within
the Commission are being addressed, in line with the Commission's
general move towards reform of their external assistance programmes.
Examples of these reforms are deconcentration to local delegations,[63]
moves towards multi-annual programming and more linkages to recipient-government
owned strategies.
"The Commission has already begun to address
the need for more institution building. They have introduced
the Transition Facility, to begin in 2004, to provide further
assistance for institution building in the post-accession period.
As institution building in the candidate countries has been a
priority for DFID, we welcome the introduction of this facility
and will continue to work to ensure that the funds allocated are
used in the most effective way possible.
"The report recommendations raise the question
of effective targeting [of] grants in ISPA. The Commission felt
that there was little room for reducing grant levels in ISPA.
This was due to a number of factors, including the income levels
of the candidate countries (far below that of the current EU15)
and access to co-financing with International Financial Institutions,
such as the European Investment Bank (EIB). DFID agree with the
Commission that care would need to be taken in reducing the ISPA
grant levels particularly if the financial burden that this would
cause would fall disproportionately on those with the lowest incomes.
"The report recommends that the need to
strengthen the absorption capacity of the candidate countries
has to be addressed in a more significant way. The Commission
agrees that absorption capacity is an issue and has made it a
priority in the lead up to accession. They have provided technical
assistance through the ISPA programme to strengthen project preparation
and tendering procedures. The PHARE programme has also invested
considerable funds in improving absorption capacity, particularly
in the preparation for EDIS (Extended Decentralised Implementation
System) whereby the PHARE programme will be fully decentralised
to the country level. Absorption capacity has been a priority
for DFID and of great concern to us in the entire pre-accession
period. We approve of the move to EDIS as a preparation for the
Structural Funds, as well as a vehicle to aid in the absorption
of PHARE funds. Furthermore, our experience is that the measures
taken by the Commission to strengthen administrative capacity
in ISPA have had an appreciable impact.
"It is the case that many of the lessons
learnt from the pre-accession assistance programmes have wider
relevance, particularly to the CARDS[64]
and TACIS[65] programmes.
Many of the lessons regarding institution building and absorption
capacity are already being fed through to these programmes and
DFID continues to work with the Commission in identifying further
lessons to be learnt. We have, for example, recently requested
that the Commission holds a seminar on evaluation of the PHARE
programme, to identify lessons from the PHARE programme that would
be of use to other assistance programmes and in the development
of the New Neighbourhood Initiative, which will encompass aid
in the Wider Europe area."
Conclusion
29.4 As indicated above, the UK recently asked
the Commission to hold a seminar on evaluation of the PHARE programme.
We ask the present Secretary of State to let us know when this
seminar is to take place, as we may wish to ask him to give evidence
to us after that event on the Commission's arrangements for monitoring
and evaluation, as well as its performance in drawing up its programmes.
29.5 We now clear this document.
60 Named, initially, the Poland and Hungary Assistance
for Reconstruction programme, PHARE was later extended to all
the countries of Central and Eastern Europe. Back
61
Instrument for Structural Policies for Pre-Accession. Back
62
Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania,
Poland, Romania, Slovakia and Slovenia. Of these, eight are now
referred to as the Accession States. Back
63
Devolution of the planning and management of programmes to the
EC's staff in the country concerned. Back
64
CARDS is the EU programme of assistance for Albania, Bosnia and
Herzegovina, Croatia, the Federal Republic of Yugoslavia and the
former Yugoslav Republic of Macedonia. Back
65
TACIS is the EC's programme of technical assistance to the Commonwealth
of Independent States and Mongolia. Back
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