Documents considered by the Committee on 7 November - European Scrutiny Committee Contents


5 European Court of Auditors' recommendations on EU staff reforms

(a)

(34056)

11964/12


(b)

(34198)

13270/12


Opinion No. 5/2012 of the European Court of Auditors on the draft Regulation amending the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Union

Special Report No.10/2012 of the European Court of Auditors: The effectiveness of staff development in the European Commission

Legal base(a)Article 287(4) TFEU;—

(b)—

Documents originated(a)— ; (b)—
Deposited in Parliament(a) 2 July 2012; (b) 4 September 2012
Department(a)HM Treasury;

(b)Foreign and Commonwealth Office

Basis of consideration(a) EM of 12 July 2012; (b) EM of 21 September 2012
Previous Committee ReportNone
Discussion in CouncilNot applicable
Committee's assessment(a) and (b) Politically important
Committee's decision(a) and (b) For debate in European Committee B

Document (a) - changes to the Staff Regulations

BACKGROUND

5.1 The Commission published its formal proposal for amendments to the EU Staff Regulations on 13 December 2011. It proposes a 5% reduction of staff in each of the European Union institutions and agencies between 2013 and 2018. To manage the effect of this reduction and to address other staff related issues, it proposes a number of changes to the Staff Regulations namely:

  • an increase in the weekly working time to a minimum of 40 hours;
  • a rise in the normal retirement age from 63 to 65 years and for early retirement age from 55 to 58 years;
  • a review of the procedures for the annual adjustment of remuneration and pensions and the annual adjustment of the pension contribution rate;
  • a change from the current special levy to a solidarity levy of 6%;
  • a redesign of the career of the assistants' function group adding a new function group for secretaries and clerical staff (AST/SC); and
  • a limited number of other modifications which are related to the organisation and management of staff.

5.2 The Commission's proposal estimates the financial impact of its savings for the period 2013-2020. This consists of:

  • €1,041 million saved under Heading V of the Multiannual Financial Framework (the MFF);
  • €258 million saved outside Heading V of the MFF;
  • €30 million increase in revenue from the special levy;
  • €277 million decrease in revenue from pension contributions; and
  • €165 million decrease in revenue from tax.

5.3 In addition, savings with regard to expenditure on pensions are expected to be in the order of €1,000 million per annum in the long term.

5.4 The Council and the European Parliament asked for the Court of Auditors' opinion on these proposals on, respectively, 30 January and 5 March 2012.

THE COURT OF AUDITORS' OBSERVATIONS ON THE COMMISSION'S PROPOSAL

5.5 The Court makes the following general observations:

  • the impact of the proposal should be measured by the Commission in terms of achieving the overall forecasted financial objective, not just by solely implementing the reforms;
  • the 5% staff reduction will result in maximum savings only if each institution achieves a 5% reduction, rather than just a 5% reduction overall; and
  • the institutions need to consider the impact of the staff reduction on their work, and that the proposal should consider training, performance appraisal, promotion and grading as ways to improve productivity of the workforce despite the cuts.

5.6 The report then makes the following observations on specific aspects of the proposal:

  • the 5% staff reduction does not in itself mean financial savings; for example, using third party service providers would reduce staff but not costs. The Court therefore recommends that institutions report annually both on steps taken to achieve the reduction, and how far they have met the objective of reducing costs;
  • the proposal for a new method for adjusting salaries and pensions may be a faster and less complex way to calculate the adjustment, but there needs to be consideration of the possible financial impact of the change. The Court also notes that the proposal increases the time-lag between Member State civil service pay evolution, and the corresponding evolution in EU staff salaries, and that this is not ideal;
  • the proposal on flexible working-time arrangements be extended to apply to managers, so as to make best possible use of institutions' staff;
  • the proposal for the Court of Justice to set up a register of institutions' implementing rules is very welcome, and the Commission should report on these rules every three years. The Court of Auditors also recommends that the Commission establish a procedure for prior consultation to ensure equal treatment of staff;
  • any changes to address geographical imbalances should respect the principle of equality of EU citizens and that no post should be reserved for nationals of a specific Member State; and
  • the new category of temporary staff for agencies created in the proposal use selection processes in accordance with the same principles, rigour and standards as for officials.

5.7 The report makes the following additional observations:

  • OLAF investigations must not infringe the fundamental rights of institutions' staff, and current legal provisions must be clarified to avoid confusion about OLAF's role on cases of serious misconduct where the EU's financial interests are not at stake;
  • the Staff Regulations should reflect recent clarifications in the rules on the selection process as organised by The European Personnel Selection Office;
  • the Commission should carry out a consultation with other institutions with the aim of simplifying the Staff Regulations. This study should also examine the pay and benefits of staff at other international organisations; and
  • the Commission should improve the relationship between citizens and the European administration through considering the adoption of provisions for an open, efficient and independent administration as set out in Article 298 TFEU.

THE GOVERNMENT'S VIEW

5.8 In an Explanatory Memorandum dated 12 July 2012, the then Financial Secretary at the Treasury (Mr Mark Hoban) says that the Government welcomes the opinion of the Court of Auditors as a useful contribution to ongoing discussions about how to ensure amendments to the Staff Regulations have beneficial impact.

5.9 He says the Government has been clear throughout negotiations that it wants to see significant financial savings result from the Staff Regulations review. It is therefore particularly valuable to see an EU institution calling for greater focus on the financial impact of the Commission's proposal. This analysis could lend weight to calls from Member States for a thorough financial impact assessment from the Commission.

5.10 The Government shares the Court's opinion that the Commission's new proposed method would make the salary adjustment process even less responsive to the economic situation in the Union, and that this is therefore an unacceptable amendment to the Staff Regulations.

5.11 The Minister concludes by saying that the UK finds the Court's opinion to be very much in line with its own, and hopes that the Commission will heed and respond to the advice contained in the report.

Document (b) - staff development

BACKGROUND

5.12 This document presents the findings of an audit by the Court which sought to evaluate staff development measures such as formal training, informal learning and job moves in the Commission. The report is accompanied by the Court's recommendations and the replies of the Commission, which was notified of the preliminary findings on 7 March 2012.

5.13 The audit investigated the staff development opportunities provided by the Commission in order to evaluate how well these align with organisational objectives and assess the impact of the Commission's staff development measures on staff and organisational performance.

5.14 The audit was based on Commission staff interviews, opinion surveys, data from the Human Resources and Security Directorate-General and previous Commission staff development evaluations.

THE COURT OF AUDITORS' OBSERVATIONS ON STAFF DEVELOPMENT IN THE COMMISSION

5.15 The Court defines the premise for the report in the following way: the Commission depends upon its 33,000 staff in order to achieve its objectives; to perform effectively, staff need to acquire and maintain up-to-date skills through training, informal learning and job moves; this is particularly important in the Commission because of the long career and low turnover of its permanent staff.

5.16 In order to examine how effectively the Commission enables its staff to develop the Court's audit addressed the following four questions:

(a) Does the Commission align staff development with organisational needs?

(b) Does the Commission provide opportunities for staff to develop?

(c) Does the learning environment motivate staff to develop their skills and to apply them in the workplace?

(d) Does the Commission evaluate the effectiveness of the actions taken to develop staff?

5.17 The Court concludes that the Commission does not have sufficient consolidated information on the existing skills of its staff or the skills which they need. The introduction of a new appraisal system in 2012 and further development of the electronic curriculum vitae (e-CV) aim to improve the information available on staff skills. The Commission's strategy for developing staff does not convincingly demonstrate how development actions will contribute to achieving the objectives of the organisation. Likewise, individual training maps were not sharply focused on them. Some skills gaps are not sufficiently addressed and managers consider that some development actions, such as some language courses and job moves, do not result in greater workplace effectiveness.

5.18 The Commission provides a wide range of opportunities for staff to develop through training, informal learning and job moves. In 2010, staff attended an average of 6.9 days' formal training and spent an estimated four days on informal learning. Each year between 2005 and 2010 on average 6% of staff moved to another Directorate-General (DG). Staff also have considerable opportunities to change jobs within the same DG. Nonetheless, for the following reasons the Court concludes that the Commission has not created a sufficiently strong learning environment to capitalise on the extensive learning offer:

  • Commission systems do not closely monitor whether staff participate in planned development actions. In 2010, staff attended only 35% of the courses planned in their training maps;
  • although Commission staff participated in an average of 6.9 days' training in 2010, 30% of staff participated in less than two days' training. Older staff on higher grades generally participate in less training;
  • there are high absence and dropout rates from language courses;
  • the Commission's own staff and managers deliver some training courses (16% of general and IT training) but not enough to demonstrate that the organisation attaches a high value to staff development;
  • there is only limited support to apply new skills in the workplace.
  • the appraisal and promotion system in place until 2011 did not sufficiently distinguish between good performers who develop their skills and poor performers who do not. The new system introduced in 2012 aims to make a clearer distinction and not to promote those whose performance is below average.

5.19 The Commission measures the satisfaction of staff with development actions. However, it does not assess whether staff have attended necessary training. Nor does it assess whether they have acquired new skills (with the exception of language and certification training). There are some attempts to evaluate the utility of development actions in the workplace. However, these are mainly based on the opinions of staff. Managers are rarely asked for their opinion on the effectiveness of training undertaken by their staff and there is little use of objective indicators. The Commission does not evaluate the impact of development actions on organisational results. Consequently, it does not have the information necessary to demonstrate the contribution of development actions to achieving organisational objectives or to inform decisions on where to target learning and development resources.

5.20 On the basis of these observations the Court's main recommendations are that the Commission should:

  • ensure it has sufficient consolidated information on existing staff skills and on those needed to meet future challenges and prepare a strategy which convincingly demonstrates how learning and development will contribute to the achievement of organisational goals;
  • support this process through improvements to the systems for planning training and job moves;
  • develop its systems for monitoring participation in development actions;
  • address the issue of underperformance and encourage greater participation in the wide range of development opportunities available while recognising staff who develop their skills and those of others;
  • test and certify the acquisition of new skills where practicable, and support their application in the workplace by providing follow-up activities; and
  • evaluate how effectively development actions provide staff with new skills which they are able to apply in the workplace.

THE GOVERNMENT'S VIEW

5.21 In a brief Explanatory Memorandum dated 21 September 2012 the Minister for Europe says that the findings within this report support the UK's view that further reforms to career structures and supporting systems within the Commission would be beneficial, both in terms of attracting high quality applicants to the EU institutions, and in promoting general staff effectiveness and efficiency. The Government will keep the Commission's response to this report under review within wider discussions on staffing, and will encourage the Commission to make use of the report's findings wherever possible. In addition, it will continue to share information on UK approaches to non-statutory systems such as appraisals and training with Commission representatives, in order to promote further modernisation of EU career structures.

Conclusion

5.22 Although no formal legislative or financial consequences flow from these helpful reports from the European Court of Auditors, we note their relevance to the current negotiations on EU staff reforms and salary increases. We therefore recommend them for debate in European Committee B, together with the Commission's report on the 2012 salary adjustment for EU staff (document 13327/12) reported in the following chapter.




 
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Prepared 16 November 2012