European Scrutiny Committee Contents

6 Draft Budget 2011

(a) (31644) — SEC(10) 473 (b) (31998) 13644/10 SEC(10) 1064

Statement of estimates of the European Commission for the financial year 2011 (Preparation of the 2011 Draft Budget) Amending Letter No 1 to the draft General Budget 2011

Legal base	Article 314 TFEU; co-decision; QMV
Deposited in Parliament	(b) 6 October 2010
Department	HM Treasury
Basis of consideration	(a) Minister's letter of 16 September 2010 (b) EM of 30 September 2010
Previous Committee Report	(a) HC 428-i (2010-11), chapter 5 (8 September 2010) (b) None
Discussion in Council	15 July 2010
Committee's assessment	Politically important
Committee's decision	(a) For debate on the floor of the House (decision reported 8 September 2010, debate took place on 13 October 2010)[18] (b) Cleared

Background

6.1 The Commission's Draft Budget (DB) is the first stage in the annual process of establishing the EU's budget for the following year. The 2011 DB sets out the Commission's proposals for EU expenditure in 2011, together with bids for the other institutions, such as the European Parliament. It provides the basis for negotiations between the two arms of the Budgetary Authority (the Council and the European Parliament), which will result in the adoption of the General Budget by the end of 2010.

6.2 The 2011 Budget will be the first to be adopted according to a new procedure introduced by the Lisbon Treaty. The Council's first reading position on the DB was adopted on 12 August 2010 (the TFEU requires the Council to complete this stage by 1 October), which was then forwarded to the European Parliament. The European Parliament will in turn discuss and agree its first reading position by mid-October 2010 (the TFEU deadline is 42 days after the Council adopts its position). If it proposes further amendments to those made by the Council, a conciliation committee would be convened to meet over 21 days, largely in late October and early November, with the aim of reaching agreement on the 2011 Budget. This will be subject to separate approval by both the Council and the European Parliament, after which the EU's Budget for 2011 will be deemed to have been adopted. Between the Commission's presentation of the DB and its final adoption it issues a number of Amending Letters, most of which propose technical adjustments, often arising from updated financial data.

6.3 The context for the DB is determined by the multi-annual Financial Framework, which sets out annual ceilings for the five permanent and one temporary headings of budget expenditure: sustainable growth, preservation and management of natural resources, citizenship, freedom, security and justice, the EU as a global player, administration and compensation (temporary measures for Bulgaria and Romania in their first years of accession, which no longer apply). The DB for 2011 is the fifth of the 2007-2013 Financial Framework.

6.4 It is customary for the Government to supplement its Explanatory Memorandum on the DB with reports on the significant further stages of the negotiation of the Budget. Such reports cover any Amending Letters that have issued, unless they are sufficiently important to warrant separate deposit in Parliament for scrutiny.

6.5 We first considered the DB for 2011 on 8 September 2010, when we recommended it for debate on the Floor of the House.[19]

The Minister's letter

6.6 The Economic Secretary to the Treasury (Justine Greening) first emphasises the Government's over-riding priority for this annual budget negotiation. She says that:

• at a time of profound fiscal consolidation across the EU it is not acceptable for the EU budget to grow and especially not at the proposed rate of 6%;
• the budget cannot be immune to the economic and financial pressures acting on Member States across the EU;
• it must contribute to fiscal consolidation efforts; and so
• the Government has repeatedly called for the budget to be frozen at its 2010 level and for greater value for money within the budget.

6.7 The Minister then tells us that:

• the process for agreeing the Council's first reading position this year varied from the norm;
• a Budget ECOFIN Council was not held, after the position was agreed at official level in Council's Budget Committee and at COREPER;
• adoption of the first reading position was completed by written procedure on 12 August 2010, rather than at a Ministerial Council;
• this unusual process was necessary this year to ensure that national parliaments were allowed the due eight weeks to conduct scrutiny of the Commission's DB before the Council agreed its first reading position (the Commission formally deposited the DB in all parliaments only in late June 2010); and
• UK officials in Brussels pushed hard to ensure that this period was preserved, contrary to the institutions' original plans.

6.8 Of the Council's first reading position itself the Minister says that:

• It was agreed by a qualified majority;
• the UK and six other Member States voted against it — all others supported it;
• those that joined the UK in opposing the position were Austria, the Czech Republic, Denmark, Finland, the Netherlands and Sweden.

6.9 She continues that the Government opposed the Council's first reading position because it did not sufficiently reflect the objectives of achieving a cash freeze in the 2011 Budget, greater value for money in EU expenditure and adequate margins below the Financial Framework ceilings.

6.10 The Minister explains that:

• the first reading position reduced payment appropriation levels by €3,609 million (£2,977 million), or 2.77%, from the Commission's DB;
• payment appropriation levels nevertheless remained €3,571 million (£2,945 million), or 2.91%, higher than in the 2010 Budget, at €126,527 million (£104,359 million);
• the first reading position also reduced commitment appropriation levels by €788 million (£650 million), or 0.55%, from the DB;
• this resulted in an overall commitment appropriation figure of €141,777 million (£116,938 million) — €285 million (£235 million), or 0.22%, higher than in the 2010 Budget;
• the Council reduced commitment and payment appropriation levels in some areas of spend that the Government assesses as poor value for money, including administration and agricultural market interventions under the Common Agricultural Policy;
• the Government's view was that the Council did not go far enough in targeting both these areas, as well as those where very large increases had been proposed without full justification and those where a poor implementation rate in the past meant that the budget proposed for 2011 seemed unrealistic; and
• at the same time, the Government's view was that Council went too far in reducing appropriations for some areas of high value for money spend within the budget, for which increases were duly justified and implementation is historically strong — this included, for example, some programmes under the competitiveness for growth and employment heading.

6.11 The Minister encloses with her letter tables summarising overall commitment and payment appropriation levels in the Council's first reading position, which we annex. She also gives us a heading-by-heading breakdown.

Sub-Heading 1a (Competitiveness for growth and employment)

6.12 On this Sub-Heading the Minister says that the Council's position reduces commitment and payment appropriations by €47 million (£39 million) and €891 million (£735 million) respectively, compared to the Commission's DB, that the margin under the Financial Framework ceiling for commitment appropriations was increased to €97m (£80m) and that the decreases reflect reductions in a number of areas, including:

• a €7.40 million (£6.10 million) reduction in commitment appropriations and a €217 million (£179 million) reduction in payment appropriations on the "Co-operation" budget lines of the 7th Research Framework Programme;
• other reductions in that programme — €67.20 million (£55.40 million) in payment appropriations on the "Capacities" budget lines, €100 million (£82 million) in payment appropriations on the "Ideas" budget line and €100 million (£82 million) in payments on the "People" budget line;
• a €100 million (£82 million) reduction in payment appropriations for financial support for projects of common interest in the Trans-European Transport Network;
• a €0.90 million (£0.70 million) reduction in commitment appropriations and a €85.90 million (£70.90 million) reduction in payment appropriations for the Competitiveness and Innovation Programme; and
• a €10.10 million (£8.30 million) reduction in payment and commitment appropriations for administrative management and staff costs.

Sub-Heading 1b (Cohesion for growth and employment)

6.13 The Minister says that the Council's position here reduces payment appropriations by €1,075 million (£887 million) compared to the DB and that there were no changes to commitment appropriations — the margin under the Financial Framework ceiling for commitment appropriations therefore remains €17 million (£14 million). She continues that reductions in payment appropriations were made largely through:

• a decrease of €551 million (£454 million) for the European Regional Development Fund, including a reduction of €165 million (£136 million) for completion of 2000-2006 programmes;
• a decrease of €249 million (£205 million) for the European Social Fund, including a reduction of €120 million (£99 million) for completion of 2000-2006 programmes; and
• reduction of €275 million (£227 million) for completion of pre-2007 projects under the Cohesion Fund.

Heading 2 (Preservation and management of natural resources)

6.14 Here the Minister tells us that the Council's position reduces commitment and payment appropriations by €475 million (£392 million) and €821 million (£677 million) respectively compared to the DB, that the margin under the Financial Framework ceiling for commitment appropriations was increased to €1,326 million (£1,094 million) and that these decreases largely reflect targeted reductions in the following areas:

• a €420 million (£346 million) decrease in payment and commitment appropriations for the 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;
• a decrease of €98 million (£81million) in payment appropriations in rural development programmes on the basis of anticipated implementation rates;
• a decrease of €95 million (£78 million) in payment appropriations for the convergence objective under the European Fisheries Fund;
• a decrease of €39 million (£32 million) in both payment and commitment appropriations in relation to market interventions; and
• a decrease of €38 million (£31 million) in payment appropriations for Life+ (financial instrument for the environment, 2007-2013).

Sub-Heading 3a (Freedom, security and justice)

6.15 In relation to this Sub-Heading the Minister tells us that the Council's position reduces commitment and payment appropriations by €10.90 million (£9 million) and €49.60 million (£40.90 million) respectively, compared to the DB, that the margin under the Financial Framework ceiling for commitment appropriations was increased to €81.70 million (£67.40 million) and that the decreases largely reflect targeted reductions in the following areas, in some cases decreasing substantial proposed increases so as to bring appropriations levels more into line with likely implementation:

• a reduction of €9.50 million (£7.80 million) in payment appropriations for the European Fund for the Integration of Third Country Nationals;
• a reduction of €9.10 million (£7.50 million) in payment appropriations for the European Return Fund;
• a reduction of €8.40 million (£6.90 million) in payments for the External Borders Fund;
• a reduction of €4.30 million (£3.50 million) for the "prevention and fight against crime" programme; and
• a reduction of €4 million (£3.30 million) for criminal and civil justice budget lines.

Sub-Heading 3b (Citizenship)

6.16 In this connection the Minister says that the Council's position increases commitment appropriations by €0.16 million (£0.13 million), that this is due to inclusion of €4 million (£3.30 million) in commitment appropriations and €1 million (£0.80 million) in payment appropriations for preparatory action for preservation of commemorative sites in Europe, intended to cover costs related to long-term conservation works of sites such as the Auschwitz-Birkenau concentration camp, which is currently facing serious deterioration due to climatic conditions and its age, that this increase is offset by a reduction in commitment appropriations of €1.49 million (£1.22 million) for the decentralised agencies under this Sub-Heading, that the position reduces payment appropriations by €19.30 million (£15.90 million), compared to the DB, that the margin under the Financial Framework ceiling for commitment appropriations was decreased to €15 million (£12 million) and that the decreases comprise reductions in the following areas, aligning appropriations levels more closely with anticipated needs and implementation rates:

• a decrease of €8.10 million (£6.7 million) in payment appropriations for EU action in the field of health;
• a decrease of €3.90 million (£3.20 million) in payment appropriations for the Culture Programme 2007-2013; and
• a decrease of €2 million (£1.60 million) in commitment appropriations and €6 million (£4.90 million) in payment appropriations for civil protection within the EU.

Heading 4 (EU as a global player)

6.17 On this Heading the Minister says that the Council's position reduces commitment and payment appropriations by €93.70 million (£77.30 million) and €590.90 million (£487.40 million) respectively, that the margin under the Financial Framework ceiling for commitment appropriations was increased to €164.10 million (£135.30 million) and that the decrease in payment appropriations is partly due to removal of €203 million (£167 million) for the Emergency Aid Reserve. On the last point she comments that the commitment appropriations level of the Reserve every year is set in the Inter-Institutional Agreement, that appropriate payment appropriations are made available for it throughout the year, as needed to respond to emergency needs and that, therefore, the Council considers that payment appropriations do not need to be presented in its first reading position. The Minister continues that the remaining reductions largely reflect targeted decreases in the following areas, often bringing appropriations levels closer into line with implementation rates:

• a reduction of €52 million (£43 million) in commitment appropriations and €191.20 million (£157.70 million) in payment appropriations for the Instrument for Pre-Accession;
• a reduction of €44 million (£36 million) in payment appropriations for the Instrument for Stability;
• a reduction of €45 million (£37 million) in payment appropriations for the Development and Cooperation Instrument, including €40 million (£33 million) on the budget line "environment and sustainable management of natural resources, including energy";
• a reduction of €30 million (£25 million) in payment appropriations for the European Instrument for Democracy and Human Rights; and
• a reduction of €24.70 million (£20.40 million) in both commitment and payment appropriations for expenditure on administrative management.

Heading 5 (Administration)

6.18 Here the Minister says that the Council's position reduces commitment and payment appropriations by €162.20 million (£133.80 million) compared to the DB, that the margin for commitment appropriations under the Financial Framework ceiling is increased to €322.80 million (£266.20 million) and that the reduction in the Heading was established by:

• limiting the increase in administrative expenditure of the institutions, apart from the European Parliament, by setting budgets based on each institution's specificities and real and justified needs;
• making targeted reductions on certain budget lines for the institutions, taking into account actual spend in 2009 and real needs;
• accepting only part of the appropriations requested in relation to Croatia's accession, on the basis of accession in 2012;
• not accepting the institutions' budgeting for an additional 1.85% salary increase relating to the 2009-2010 budget period, pending a decision on this issue by the European Court of Justice;
• increasing the standard flat rate abatement on salaries for most of the institutions, taking into account their current vacancy rate;
• not accepting any new posts requested by the institutions, with the exception of 11 posts for the European Council, because it is a new institution; and
• reducing the levels of budgets for the decentralised agencies, with the aim of bringing budgets closer into line with real needs — the approach was to limit budget increases for agencies at "cruising speed" to a maximum of 1.5%; and to a maximum of 3% for agencies with new tasks to perform, allowing for half of the new posts requested by the agencies to be established.

6.19 The Minister adds that the proposed budgets of new agencies were left unchanged by the Council, with the exception of the agency for operational management of large-scale IT systems under Sub-Heading 3a — for this new agency appropriations for six months were granted and the staff posts proposed were accepted.

6.20 The Minister says that the Council's first reading position was accompanied by two draft declarations:

• the first, as is customary, calls on the Commission to submit draft amending budgets throughout next year if the appropriations entered in the 2011 Budget prove insufficient to meet needs under Headings 1, 2 and 4; and
• the second deals more specifically with Sub-Heading 1b, urging the Commission to present latest figures and estimates by the end of September 2011, as well as a draft amending budget, if required.

6.21 Finally the Minister tells us that:

• the European Parliament is considering the DB and the Council's amendments and will form its own position on the 2011 Budget;
• the Council and European Parliament will then meet in a three-week conciliation committee from the end of October 2011, to agree the final budget;
• the Government's objectives during this process will remain consistent with its approach so far; and
• it will be working very hard with other Member States and with the European Parliament to secure the best possible outcome for British taxpayers.

The new document

6.22 The Commission's Amending Letter No 1, document (b), proposes amendments to its DB for 2011, specifically to the establishment plans and budgets of three institutions in Heading 5 (Administration) — the Commission, the Council and the European External Action Service (EEAS) — to reflect the latter's establishment this year. It was not possible to include these figures in the Commission's original DB, as the Council Decision establishing the EEAS was not adopted until 26 July 2010.

6.23 In the Amending Letter the Commission:

• says that an effective EEAS is important to allow the EU to strengthen its role on the world stage, giving it more profile and increasing its capacity to communicate its interests and values more efficiently;
• continues that it can add value through combining the financing instruments available and bringing together expertise from the Commission, the Council and Member States' diplomatic services;
• summarises the financing requested for the EEAS in 2010, as set out in Draft Amending Budget No 6 for the 2010 EU Budget;[20]
• requests the budgetary resources needed to allow a viable and efficient start-up for the EEAS in 2011;
• says that the service's establishment must be guided by the principles of cost efficiency, budget neutrality and sound and efficient management and must bear in mind the impact of the current economic crisis on national public finances and the necessary fiscal consolidation efforts in Member States;
• says the EEAS will be built up gradually and through transitional arrangements — unnecessary duplication of tasks, functions and resources with other structures must be avoided and all opportunities for rationalisation and streamlining used;
• explains that departments and functions of the Council and Commission will be transferred to the EEAS, as detailed in the Annex to the July 2010 Decision and each official transferring will be allocated to a post in the function group corresponding to their grade;
• says that the 2011 draft budgets and the establishment plans of the Commission and Council are reduced accordingly; and
• says that service level agreements (for example for IT services or translation) will be concluded between the EEAS and the Commission and Council Secretariat, to be reviewed and adjusted if needed once the EEAS is fully up and running.

6.24 The Amending Letter shows total administrative expenditure for the EEAS in 2011 as €475.80 million (£392.4 million), including €184.90 million (£152.50 million) in Brussels and €290.90 million (£239.90 million) in delegations around the world. The breakdown of this expenditure follows.

Establishment plan and related remuneration cost

6.25 The total number of staff in the EEAS establishment plan is 1,643, with total remuneration expenditure estimated at €211.90 million (£174.80 million). This includes 1,114 posts transferred from the Commission and 411 from the Council. 675 Commission and 386 Council posts are transferring from headquarters in Brussels, with an associated cost of €74 million (£61 million) and €37 million (£30.50 million) respectively. 439 Commission and 25 Council posts are transferring from delegations, with associated costs of €78.40 million (£64.70 million) and €3.90 million (£3.20 million) respectively.

6.26 In addition, the EEAS establishment plan includes new posts. 100 new posts were requested in 2010, 20 for headquarters and 80 in delegations, with a full-year cost in 2011 of €17.40 million (£14.40 million). The Commission also requests an additional ten Administrator posts for nine months and eight Assistant posts for six months, with a cost in 2011 of €1.20 million (£0.99 million), saying that these additional posts will handle the increased workload derived from the EEAS taking on tasks previously carried out by the rotating Presidency and flowing from the Lisbon Treaty and strengthen the EEAS' capacity to function autonomously.

Other human resources

6.27 The Commission says that that the EEAS will also have an estimated 2,077 full-time equivalent (FTE) human resources, including seconded national experts, contract agents, agency staff and local agents in delegations. The associated spend is €70.40 million (£58.10 million), of which €58.30 million (£48.10 million) is transferred from the Commission budget and €9.60 million (£7.90 million) from the Council. These resources cover an estimated 80 FTE in Commission headquarters and 1,664 in delegations. As foreseen in the EEAS agreement, none of the Commission delegation staff working on development cooperation will transfer into the EEAS. From the Council side, staff working on Common Foreign and Security Policy and European Security and Defence Policy are covered — an estimated 260 FTE — and an estimated three FTE working in the liaison offices in New York and Geneva. The Draft Amending Budget No 6 for 2010 requested an additional ten contract agents in headquarters and 60 local agents in delegations, with an associated cost in 2011 of €2.50 million (£2.10 million).

Other administrative expenditure

6.28 A total of €193.5 million (£159.6 million) in other administrative expenditure, comprising €148.50 million (£122.50 million) from the Commission budget, €31.60 million (£26.10 million) from the Council's, €9.40 million (£7.80 million) resulting from Draft Amending Budget No 6 to the 2010 budget and €4.00 million (£3.30 million) entirely new expenditure in 2011, is requested:

• €36.20 million (£29.90 million) for other staff-related expenditure, including training, medical services and travel — of this, €29.60 million (£24.40 million) is transferred from the Commission budget and €5.00 million (£4.10 million) from the Council;
• €1.30 million (£1.10 million) to cover needs arising from recruitment of additional staff in 2010 and €0.30 million (£0.20 million) to cover needs related to the 18 additional posts requested for 2011;
• €157.30 million (£129.70 million) for buildings, equipment and other operating expenditure, including IT;
• buildings and related expenditure in the EEAS budget for 2011 amounts to €112.70 million (£93.00 million) — the High Representative is expected to take a decision on the EEAS premises by the end of October 2010, which will have an impact on current estimates and may lead to a request for further appropriations next year;
• the Commission budget transfers €91.2 million (£75.20 million) to the EEAS — €12.30 million (£10.10 million) for headquarters and €78.90 million (£65.10 million) for delegations and the Council budget transfers €12.10 million (£10.00 million) to the EEAS — €6.90 million (£5.70 million) at headquarters and €5.20 million (£4.30 million) for the liaison offices). In addition, €6.00 million (£4.90 million) is to cover needs for buildings related to additional posts created in 2010 — €0.40 million (£0.30 million) at headquarters and €5.60 million (£4.60 million) in delegations) and €0.10 million (£0.08 million) to cover corresponding needs for the additional 18 posts requested for 2011 and €3.30 million (£2.70 million) to cover urgent needs for upgrading the security in some premises; and
• €44.60 million (£36.80 million) for IT, equipment and other operating expenditure. €27.70 million (£22.80 million) of this is transferred from the Commission budget, — €5.80 million (£4.80 million) for headquarters and €21.90 million (£18.10 million) for delegations and €14.50 million (£12.00 million) is transferred from the Council budget — €14.30 million (£11.80 million) at headquarters and €21.90 million (£18.10 million) for delegations. €2.10 million (£1.70 million) is to cover needs related to the additional posts created in 2010 — €0.20 million (£0.16 million) at headquarters and €1.90 million (£1.60 million) for staff in delegations and €0.30 million (£0.20 million) is to cover needs associated with the additional 18 posts proposed for 2011.

6.29 In the context of a gradual build up the Commission recalls the senior management structure set out in the Decision of July 2010 — an Executive Secretary General, two Deputy Secretaries General and a very senior official responsible for budget and administration and there will also be senior posts responsible for thematic and geographical areas. It says that:

• ultimately the senior management structure will cover the full range of the High Representative's responsibilities;
• while some of the additional resource demands of the EEAS (stemming, for example, from taking over the rotating Presidency tasks) will be absorbed by efficiency gains of merging existing Commission and Council units, there may be further resource demands in future;
• the EEAS has a target of 10% efficiency savings in headquarters spending, by eliminating duplication, exploiting synergies and modernising working methods —this will help to achieve budget neutrality once the initial start-up phase, with associated costs, has been completed;
• in order to achieve the target of one third of EEAS posts filled by Member States' diplomats by 2013, it might be necessary to convert some of the existing seconded national experts, and Assistant posts, into Administrator posts;
• over time the functions of the EU Special Representatives, currently funded under the Common Foreign and Security Policy, will be integrated into the EEAS;
• the High Representative will work up a detailed EEAS organisational structure with the senior management team, once appointed, on the basis of these principles;
• once the initial transition of units and new posts into the EEAS has been completed, there may be possible additional requests for funding in the course of 2011.

6.30 The Commission also sets out in detailed tables the changes to the establishment plans of the three institutions concerned and, in an annex, the line-by-line changes to the institutions' budgets to reflect the transfers of costs concerned.

The Government's view of the new document

6.31 On the Amending Letter, document (b) the Minister says that:

• the Government wants to ensure that the EEAS is able to deliver its objectives and work effectively for the Member States;
• it acknowledges that some additional funding is required in the EEAS' first full year, as the necessary rationalisation and streamlining will not happen immediately — in practical terms some new staff posts must be created to handle new tasks and there are physical moving costs as units from the existing institutions merge;
• at a time, however, when governments throughout the EU are taking difficult decisions to reduce their public spending, including on their own national administrations, the Government believes it is essential that the EEAS demonstrates value for money, budget discipline in its funding bids and a firm commitment to real and substantial cost efficiencies right from the start;
• the additional resources requested for the EEAS make up €34.50 million (£28.50 million), or 7.3%, of its total budget;
• the Government will be questioning closely the rationale given for these additional funds, to ensure they are properly justified in every case;
• more broadly it will push for cost and efficiency savings throughout the EEAS, both in the 2011 Budget and in the years immediately following;
• rather than highlighting the possible need for further additional funds next year, the Government believes the Amending Letter should be accompanied by a clear cost savings plan, beginning from 2011, that demonstrates the means through which the long-term budget neutrality referred to in the Decision of 26 July 2010 will be reached;
• the Government will push both for immediate savings on the 2011 Budget and for this long-term reassurance of savings in the future in the course of negotiations on the EEAS budget for next year;
• it will continue to highlight that policy objectives leading to additional resource requirements by the EEAS must be clearly elaborated and will recall throughout that these must respect the role of national diplomatic services; and
• given that the Government is pushing for the 2011 EU Budget to be maintained at a cash level equivalent to 2010, it believes that additional funding for the EEAS should be accommodated through reductions elsewhere in the 2011 DB — in line with its push to ensure cost savings and reduce low value for money expenditure throughout the EU Budget.

6.32 As for the financial implications of the Amending Letter the Minister, noting that of the total budget of the EEAS in 2011 of €475.80 million (£392.40 million), that €34.50 million (£28.50 million) is additional expenditure and €441.30 million (£364 million) is the cost of Commission and Council units transferring into the EEAS and that these costs are in both commitment and payment appropriations, says that:

• Member States contribute to the EU Budget as a whole, and not to single initiatives or institutions within it;
• the UK contribution to the EU Budget in 2011 will therefore play a part in financing the EEAS, determined according to the UK's GNI share next year;
• as an indicative guide only, the UK's GNI share contribution to the 2010 budget is currently assessed at 13.8%; and
• applying this to the EEAS budget would indicate UK contributions pre-abatement of around €65.66 million (£54.20 million) to the total EEAS budget, of which €60.90 million (£50.20 million) would be to the existing costs of the Commission and Council and €4.76 million (£3.93 million) to the additional EEAS costs.

Conclusion

6.33 We are grateful to the Minister for her account of the Council's first consideration of the Draft Budget for 2011. We applaud the Government's intentions in relation to limiting budget increases and seeking value for money. We look forward to hearing the outcome of the European Parliament's first reading of the Draft Budget.

6.34 We note the Commission's Amending Letter No 1, document (b), and the Government's robust view of it. As it will be subsumed in the continuing discussions of the overall budget, whilst drawing it to the attention of the House, we clear it from scrutiny.

Annex

Draft Budget 2011 (€ million)

Heading	FF Ceiling1	Commission's Draft Budget 2011		Council's first reading position		Difference between draft budget 2011 - Council's first reading
		CA2	PA3	CA	PA	CA	PA
1a. Competitiveness for Growth and Employment Margin4 1b. Cohesion for Growth and Employment Margin	12,987 - 50,987 -	13,437 50 50,970 17	12,110 - 42,541 -	13,390 97 50,970 17	11,219 - 41,466 -	-47 - 0 -	-891 - -1,075 -
2. Preservation and Management of Natural Resources Margin	60,338 -	59,486 852	58,136 -	59,011 1,326	57,315 -	-475 -	-821
3a. Freedom, Security and Justice Margin 3b. Citizenship Margin	1,206 - 683 -	1,135 71 668 15	853 - 639 -	1,124 82 668 15	803 - 620 -	-11 - 0.2 -	-50 - -19 -
4. European Union as a Global Player Margin5	8,430 -	8,614 70	7,602 -	8,520 164	7,011 -	-94 -	-591 -
5. Administration Margin6	8,334 -	8,255 161	8,256 -	8,093 323	8,094 -	-162 -	-162 -
TOTAL (1)	142,965	142,565	130,136	141,777	126,527	-788	-3,609

Due to rounding, figures in difference column may not equal column differences, and sum of rows may not equal total.

Draft Budget 2011 (£ million)

Heading	FF Ceiling1	Commission's Draft Budget 2011		Council's first reading position		Difference between draft budget 2011 - Council's first reading
		CA2	PA3	CA	PA	CA	PA
1a. Competitiveness for Growth and Employment Margin4 1b. Cohesion for Growth and Employment Margin	10,712 - 42,054 -	11,083 41 42,040 14	9,988 - 35,088 -	11,044 80 42,040 14	9,253 - 34,201 -	-39 - 0 -	-735 - -887 -
2. Preservation and Management of Natural Resources Margin	49,767 -	49,064 703	47,951 -	48,672 1,094	47,273 -	-392 -	-677 -
3a. Freedom, Security and Justice Margin 3b. Citizenship Margin	995 - 563 -	936 59 551 12	704 - 527 -	927 67 551 12	662 - 511 -	-9 - 0.13 -	-41 - -16 -
4. European Union as a Global Player Margin5	6,953 -	7,105 58	6,270 -	7,027 135	5,783 -	-77 -	-487 -
5. Administration Margin6	6,874 -	6,809 133	6,810 -	6,675 266	6,676 -	-134 -	-134 -
TOTAL	117,918	117,588	107,336	116,938	104,359	-650	-2,977

Due to rounding, figures in difference column may not equal column differences, and sum of rows may not equal total.

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18   HC Deb, 13 October 2010, cols 409-59. Back

19   See headnote. Back

20   (31728) 11251/10: see HC 428-i (2010-11), chapter 17 (8 September 2010). Back

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Prepared 26 October 2010