34 DRAFT BUDGET 2010
(30860)
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| Draft General Budget of the European Communities for the financial year 2010
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| Legal base | Article 272 EC; QMV; the special role of the European Parliament in relation to the adoption of the Budget is set out in Article 272
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| Department | HM Treasury
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| Basis of consideration |
Minister's letter of 24 July 2009 |
| Previous Committee Report |
None |
| Discussed in Council | 10 July 2009
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
34.1 The Commission's Preliminary Draft Budget (PDB) is the first
stage in the Community's annual budgetary procedure. We reported
on the 2010 PDB in June 2009[124]
and it was debated in European Committee on 6 July 2009.[125]
The second stage is the adoption by the Council of the Draft Budget
(DB). The 2010 DB was adopted on 10 July 2009. The 2010 PDB and
the 2010 DB form the basis of the 2010 Adopted Budget which is
expected to be agreed in mid-December 2009, after consideration
by the European Parliament in October 2009, further consideration
by the Council in November 2009 and subsequent negotiations between
the Council and the European Parliament.
The Draft Budget
34.2 The Economic Secretary to the Treasury (Ian Pearson) has
written in advance of publication of the DB (which will be later
in the Autumn) to tell us what the Council decided in relation
to the DB. The Minister encloses with his letter annexes, which
we reproduce, helpfully setting out the euro and sterling figures
for the five budget categories and the changes in these in relation
to the PDB.
SUMMARY OF THE FIGURES
34.3 The DB represents an overall reduction of €613 million
(£522 million), or 0.4%, in commitment appropriations[126]
compared to the PDB — to €137,944 million (£117,542
million), significantly increasing the margins under the Financial
Framework ceilings, and an overall reduction of €1,795 million
(£1,530 million), or 1.5%, in payment appropriation levels
compared to the PDB — to €120,521 million (£102,696
million), bringing the budget more into line with implementation
capacity and anticipated requirements.
THE INDIVIDUAL EXPENDITURE HEADINGS
Sub-Heading 1a: Competitiveness for growth and employment
34.4 The DB reduces commitment and payment appropriations by €100
million (£85 million) and €408 million (£348 million)
respectively, compared to the PDB. The margin under the Financial
Framework ceiling for commitment appropriations is increased to
€218 million (£186 million). The changes largely reflect
targeted reductions of:
- million (£72 million) in payment appropriations in four
research cooperation budget lines, covering health, nanosciences,
nanotechnologies, materials and new production technologies and
transport, including aeronautics and the Clean Sky Joint Undertaking;
- million (£63 million) in commitment and
payment appropriations for administrative management, management,
and staff costs;
- million (£34 million) in payment appropriations
in relation to "financial support for projects of common
interest in the trans-European energy network";
- a €30 million (£26 million) in payment
appropriations in the "Ideas" budget line; and
- and €11 million (£9 million) in commitment
appropriations for decentralised agencies.
Sub-heading 1b: Cohesion for growth and employment
34.5 The DB reduces payment appropriations by €293
million (£250 million) compared to the PDB. There are no
changes to commitment appropriations and the margin under the
Financial Framework ceiling for these appropriations remains €12
million (£10 million). Reductions in payment appropriations
are made largely through:
- a decrease of €138 million
(£118 million) for the European Regional Development Fund;
- a decrease of €97 million (£83 million)
for the European Social Fund; and
- a decrease of €58 million (£49 million)
for completion of 2000-2006 programmes.
Heading 2: Preservation and management of natural
resources
34.6 The DB reduces commitment and payment appropriations
by €363 million (£309 million) and €491 million
(£418 million) respectively, compared to the PDB. The margin
under the Financial Framework ceiling for commitment appropriations
is increased to €1,473 million (£1,255 million). These
changes reflect targeted reductions of:
- million (£196 million)
in commitment and payment appropriations in accounting clearance
of previous years' accounts with regard to shared management expenditure
under the European Agriculture Guidance and Guarantee Fund and
the European Agriculture Guarantee Fund;[127]
- million (£101 million) in commitment and
payment appropriations in relation to market interventions; and
- a €98 million (£84 million) in payment
appropriations for rural development on the basis of anticipated
implementation rates.
Sub-heading 3a: Freedom, Security and Justice
34.7 The DB reduces commitment and payment appropriations
by €6 million (£5 million) and €28 million (£24
million) respectively, compared to the PDB. The margin under the
Financial Framework ceiling for commitment appropriations is increased
to €51 million (£43 million). The reductions reflect
targeted changes to bring allocations more into line with anticipated
needs and implementation rates:
- a decrease of €4 million
(£3 million) in payment appropriations for the European Fund
for the Integration of Third Country Nationals;
- a decrease of €3 million (£3 million)
in commitments appropriations for decentralised agency subsidies;
- a decrease of €3 million (£3 million)
in payment appropriations for the External Borders Fund;
- a decrease of €3 million (£3 million)
in payment appropriations for "Prevention of and fight against
crime"; and
- a decrease of €2 million (£2 million)
in commitment and payment appropriations for the European Police
Office.
Sub-heading 3b: Citizenship
34.8 The DB reduces commitment and payment appropriations
by €15 million (£13 million) and €26 million (£22
million) respectively, compared to the PDB. The margin under the
Financial Framework ceiling for commitment appropriations is increased
to €34 million (£29 million). The changes largely reflect
targeted reductions, to bring allocations more into line with
anticipated needs and implementation rates, of:
- million (£8 million) and
€5 million (£4 million) respectively from commitment
and payment appropriations for multimedia actions;
- million (£5 million) from payment appropriations
for "Community action in the field of health";
- million (£3 million) from commitment appropriations
for subsidies to decentralised agencies;
- million (£3 million) from payment appropriations
for Europe for Citizens programmes; and
- million (£3 million) from payment appropriations
for the European Centre for Disease Prevention and Control.
Heading 4: The European Union as a global partner
34.9 The DB reduces commitment and payment appropriations
by €89 million (£76 million) and €508 million and
£433 million. The margin under the Financial Framework ceiling
for commitment appropriations is increased to €310 million
(£264 million). The decrease in payment appropriations is
partly due to removing €249 million (£212 million) for
the Emergency Aid Reserve from the DB. The commitment appropriations
level of the Reserve each year is set in the Inter-Institutional
Agreement governing budgetary matters. Appropriate payment appropriations
are made available for it as and when required to respond to emergency
needs and therefore the Council considers that payment appropriations
do not need to be presented in the DB.
34.10 The remaining reductions largely reflect targeted
decreases of:
- million (£43 million)
in commitment appropriations and €166 million (£141
million) in payment appropriations for the Instrument for Pre-Accession;
- million (£25 million) in payment appropriations
for the European Instrument for Democracy and Human Rights; and
- million (£7 million) in commitment appropriations
and €21 million (£18 million) in payment appropriations
for macro-financial assistance.
Heading 5: Administration
34.11 The DB reduces both commitment and payment
appropriations by €40 million (£34 million), compared
to the PDB. The margin under the Financial Framework ceiling for
commitment appropriations is increased to €276 million (£235
million). The reduction in this heading is enabled by:
- establishing the increase across-the-board
of Community administrative expenditure at a level near the inflation
rate;
- setting the administrative budget of each institution
at a level that takes into account their specificities as well
as real and justified needs;
- carrying out targeted reductions under certain
budgetary lines for all the institutions, taking into account
the budget outturn in 2008 and real needs; and
- increasing the standard flat rate abatement on
salaries for most of the institutions, taking into account their
current vacancy rate.
The Government's view
34.12 The Minister tells us that during the conciliation
meeting, attended by the Commission, that followed the Council's
adoption of the DB first reading, a Joint Statement was agreed
on the importance of full recruitment in relation to the 2004
and 2007 enlargements posts and that the Government supports this
statement, which calls for quicker progress in ensuring agreed
posts are filled.
34.13 The Minister reminds us that the Government's
key priorities for negotiations on the 2010 DB are to ensure:
- payment appropriation levels
that better reflect implementation capacity, so as to avoid budgetary
surpluses;
- sufficient margins under the Financial Framework
ceilings, not least to contribute to the financing of the remaining
€2.40 billion (£2.05 billion) outstanding for the European
Economic Recovery Plan; and
- enhanced value for money, including questioning
of increases for agriculture and administration.
He says that the DB and the statements agreed alongside
it go a considerable way to achieving these objectives and that
the Government will continue to pursue these objectives in subsequent
stages of the 2010 budget process, building on the well-balanced
compromise achieved in the DB.
34.14 Finally, the Minister reminds us that in July
2009, during the debate on the PDB, he undertook to update the
European Committee on the Commission's scoping of possible activities
in Afghanistan. In his letter the Minister also gives us that
information, saying that:
- within the overarching priorities,
as identified by the Commission, of stabilising the country and
dealing with the narcotics trade, there are specific objectives
to raise domestic revenues as a proportion of GDP, to improve
political performance in accountability and the control of corruption,
and to increase the number of opium-free provinces;
- in its PDB the Commission outlines that progress
on each of these is being made;
- in addition, the Budget is supporting health
care policy and management (including hospital reform and disability
and mental health services), rule of law projects through the
Law and Order Trust Fund and economic and trade development through
supporting Afghan customs policy; and
- further financial resources for Afghanistan have
been released by the Commission in 2009 and may be proposed for
the 2010 Budget.
The Minister comments that the Government supports
a strong Community contribution to international efforts to promote
security and stability and says that he will keep us updated on
any further spending proposals as they emerge.
Conclusion
34.15 We are grateful to the Minister for his
report on progress in setting the 2010 Budget. We note that the
Government appears to be achieving some successes in reining in
expenditure and look forward to hearing that these gains are retained
in the later stages of the process. Meanwhile we clear the document.
124 (30692): See HC 19-xx (2008-09) chapter 2 (17 June
2009). Back
125
Stg Co Deb, European Committee, 6 July 2009, cols. 3-38. Back
126
Commitment appropriations are the cost of legal obligations that
can be entered into during the current financial year for payments
in the current and future years. Payment appropriations are the
amounts available to be spent in the current financial year on
commitments made in the current or past years. In exceptional
circumstances unused payment appropriations may be carried forward
into the following year. Back
127
This represents Community budget resources accruing from allocations
returned from Member States as a result of accounting clearance
decisions by the Commission on the extent to which Member States
have complied with payment and control conditions. Back
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