8 Multiannual Financial Framework 2014-2020
| Committee's assessment
| Politically important |
| Committee's decision | Cleared from scrutiny
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| Document details | (a) Draft Regulation to allow rescheduling of timings in the current Multiannual Financial Framework
(b) Draft Amending Budget to implement the rescheduling
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| Legal base | (a) Article 312 TFEU and Article 106(a) EURATOM; consent; unanimity; (b) Article 314 TFEU and Article 106(a) EURATOM; co-decision; QMV
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| Department
Document numbers
| HM Treasury
(a) (36610), 5467/15 + ADD 1, COM(15) 15
(b) (36611), 5469/15, COM(15) 16
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Summary and Committee's conclusions
8.1 The Multiannual Financial Framework (MFF) for
the years 2014-2020 is laid down in the MFF Regulation. One of
the Regulation's purposes is to set out annual commitment ceilings
for a variety of shared management funds (programmes) which correspond
to Member States' annual allocations for each fund. The Regulation
provides for the possibility of commitments for these funds unused,
because of timing difficulties in the first year of the MFF period,
2014, to be transferred to subsequent years. The unused commitments
concerned include some as yet unapproved UK programmes.
8.2 In the event, there are such unused commitments
and the draft Regulation would provide for their transfer to the
years 2015, 2016 and 2017. The Draft Amending Budget would accordingly
add the relevant transferred commitments to the 2015 general budget.
8.3 The Government tells us that, given that the
overall ceiling for commitments for the current MFF would remain
unchanged, and that payments are unaffected in any way, it is
minded to support these proposals.
8.4 These proposals appear to us as a practical
solution to the timing difficulties created by the relatively
late adoption of the 2014-2020 MFF. So, whilst drawing the proposals
to the attention of the House, we clear the documents from scrutiny.
Full details of the documents:
(a) Draft Council Regulation amending Regulation (EU, Euratom)
No. 1311/2013 laying down the multiannual financial framework
for the years 2014-2020: (36610), 5467/15 + ADD 1, COM(15) 15;
(b) Draft Amending Budget No. 2 to the general budget 2015 accompanying
the draft Council Regulation amending Regulation (EU, Euratom)
No. 1311/2013 laying down the multiannual financial framework
for the years 2014-2020: (36611), 5469/15, COM(15) 16.
Background
8.5 The Multiannual Financial Framework (MFF) for
the years 2014-2020 is laid down in Council Regulation No. 1311/2013,
the MFF Regulation. One of its purposes is to set out annual commitment
ceilings for a variety of shared management funds (programmes)
which correspond to Member States' annual allocations for each
fund.
8.6 Article 19 of the MFF Regulation allows commitments
for the European Regional Development Fund (ERDF), the European
Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural
Fund for Rural Development (EAFRD), the European Maritime and
Fisheries Fund (EMFF), the Asylum, Migration and Integration Fund
(AMIF) and the Internal Security Fund (ISF) to be transferred,
before 1 May 2015, from the 2014 tranche to subsequent years.
This is because Member States' programmes to implement these funds
over the MFF period are subject to a process of approval by the
Commission to ensure sound financial management and to ensure
the interests of taxpayers are protected and it was anticipated
that not all programmes for the full MFF period would be approved
in the MFF's first year.
8.7 Member States are required to base plans for
each fund on corresponding legal acts which lay down provisions
for implementation. However, as a result of the late agreement
of the MFF for 2014-2020, these legal acts could not be adopted
until, in some cases, May 2014. Consequently, a significant number
of programmes under shared management within the meaning of Article
19 of the MFF Regulation could not be adopted in 2014 and were
not advanced enough to benefit from Article 13 of Regulation (EU,
EURATOM) No. 966/2012 (the Financial Regulation, which governs
management of the general budget), a procedure which allows carryover
of appropriations if adopted by 15 February in the following financial
year.
8.8 During the course of a financial year the Commission
presents Draft Amending Budgets (DABs) proposing increases or
reductions for revenue and expenditure in the current EU general
budget.
The documents
8.9 Given the commitments situation the Commission
presents this draft Council Regulation, document (a), on the basis
of Article 19 of the MFF Regulation to re-profile annual MFF commitment
ceilings for years 2014, 2015, 2016 and 2017. This would allow
for the preservation of 2014 commitments for programmes (which
include several UK programmes) that could not be adopted in 2014
nor are advanced enough to benefit from the carryover procedure.
The overall ceiling for commitments for the current MFF would
remain unchanged and payments are not affected in any way. The
detail of the proposal is as follows.
Scope of the re-profiling
8.10 The draft Regulation applies to:
· the adoption after 1 January 2014 of new
programmes under shared management for the ERDF, the ESF, the
CF, the EAFRD, the EMFF, the AMIF and the IISF;
· funds from the specific allocation for
Youth Employment Initiative as the legal basis is the same as
for the programmes under shared management;
· the Fund for European Aid to the most
Deprived (FEAD), as its commitments originate from Structural
Funds and are implemented under shared management; and
· contributions from the ERDF to the cross-border
and sea-basin programmes established under the European Neighbourhood
Instrument and the Instrument for Pre-Accession Assistance as
those amounts are part of national allocations defined in Article
91(2) of European Structural and Investment (ESI) Funds' Common
Provisions Regulation.
8.11 The draft Regulation does not apply to:
· amounts transferred from the CF to the
Connecting Europe Facility;
· technical assistance at the initiative
of the Commission;
· innovative actions, as these are not part
of programmes and are managed by the Commission under direct management;
and
· contributions from Heading 4 (Global Europe)
of the MFF, even when transferred to the ERDF and the European
Territorial Cooperation objective.
Transfer of allocations
8.12 2014 commitment appropriations for programmes
under shared management within the scope of Article 19 of the
MFF Regulation not adopted in 2014 nor carried over to 2015 total
€21,105 million (£16,439 million), of which, €1,249
million (£973 million) pertains to UK programmes not adopted
in 2014. The Commission proposes transfer of the bulk of the total
commitment appropriations into 2015 in order to keep the pace
of investments for growth and jobs and minimise differences of
treatment with programmes adopted in 2014 and programmes whose
2014 commitment tranche is to be carried-over. The exceptions
to the carryover to 2015 are:
· 2014 allocations for EAFRD programmes
yet to be adopted are proposed to be transferred in equal parts
to 2015 and 2016 — this is primarily because of the late
agreement of the regulatory framework providing the essential
elements necessary to Member States for the preparation of their
rural development programmes, which unlike other ESI Funds was
only completed in the second half of 2014;
· contributions from the ERDF to the cross-border
and sea-basin programmes established under the European Neighbourhood
Instrument and the Instrument for Pre-Accession Assistance —
it is proposed to transfer the whole 2014 ERDF allocation to 2017,
as the set-up of these programmes is more complex and takes longer;
and
· programmes financed from the AMIF or the
ISF, allocations not used in 2014 would be transferred to years
2015 to 2017 — the basic acts for these funds were only
adopted in May 2014, with the adoption of a number of implementing
and delegated acts still pending, Member States' experience in
managing these funds under shared management is limited and the
proposed transfer of the 2014 allocations over three years takes
account of these particular features.
8.13 The Commission proposes that the annual commitment
ceiling for 2014 is revised down by €21,105 million (£16,439
million). In order that the relevant 2014 allocations are preserved,
it proposes a directly equivalent increase to the annual commitment
ceilings for later years as follows: €16,476 million (£12,833
million) to 2015, €4,521 million (£3,521 million) to
2016 and €108 million (£84 million) to 2017.
Revised financial framework
8.14 The proposed re-profiling of allocations is
expressed in current prices and incorporates the technical adjustment
of the financial framework for 2015 adopted in 2014. The Annex
to the MFF Regulation, setting out the appropriation ceilings
by budget heading for each of the seven years, is expressed in
2011 prices. This is to be replaced by the table set out in the
Annex to the draft Regulation, also expressed in 2011 prices.
8.15 Based on the adjustment of the annual commitment
ceiling for 2015, as proposed in the draft Regulation, the Commission
also proposes a DAB for the 2015 general budget, DAB No. 2/2015,
document (b), to transfer into the 2015 budget a proportion of
unused 2014 commitments. It would transfer the €16,476 million
in commitment appropriations for the various funds under shared
management under budget Sub-heading 1b, Heading 2 and Heading
3. The DAB would also increase, by €2.48 million (£1.93
million), the commitment appropriations for the Instrument for
Pre-accession Assistance (IPA II) under Heading 4, to preserve
the similar treatment between contributions from Heading 4 and
Sub-heading 1b to the ERDF European territorial cooperation (ETC)
programmes. In accordance with the agreement reached on the 2014
and 2015 budgets, which anticipated some delay in the approval
of operational programmes, this DAB does not include any change
to payment appropriations. The detail of the DAB is as follows.
Sub-heading 1b (Economic, Social and Territorial
Cohesion)
8.16 The Commission proposes to transfer the bulk
of the commitments for programmes under Sub-heading 1b not adopted
in 2014 to 2015. This is in order to keep the pace of investment
for growth and jobs and minimise the differences of treatment
with programmes adopted in 2014 and those whose commitment tranche
has qualified for the carryover procedure. This would involve
transfer of €11,173 million (£8,703 million) in commitment
appropriations.
Heading 2 (Sustainable Growth: Natural Resources)
8.17 The Commission proposes a partial transfer of
2014 allocations for EAFRD programmes awaiting adoption into 2015,
which would amount to €5,093 million (£3,967 million)
in commitment appropriations.
Heading 3 (Security and Citizenship)
8.18 For the AMIF and ISF the Commission proposes
a partial transfer of commitment appropriations totalling €210
million (£164 million).
Heading 4 (Global Europe)
8.19 In order to preserve the contributions from
Heading 4 to support the participation of (potential) candidate
countries in the ERDF-ETC programmes and ensure a similar treatment
with the unused 2014 Heading 1b contributions to ERDF-ETC, the
Commission proposes to increase the commitment appropriations
of ERDF-ETC in 2015 with the amount of the corresponding commitment
appropriations that were not used in 2014. As there is no reprogramming
foreseen for Heading 4 in Article 19 of the MFF Regulation, the
proposed increase of €2.48 million (£1.93 million)
in commitment appropriations is not accompanied by an equivalent
increase to the annual commitment ceiling for Heading 4. However,
this transfer is part of the transfer of unused commitments for
programmes under shared management from 2014 to 2015, albeit in
this case a programme not within the scope of Article 19.
The Government's view
8.20 In his Explanatory Memorandum of 26 January
2015 the Financial Secretary to the Treasury (Mr David Gauke)
comments that:
· the Government has been clear that it
wants to see real budgetary restraint in the EU over the coming
years, as well as the longer term, in order to avoid unaffordably
high costs to the UK and to UK taxpayers and the MFF deal secured
in 2013 delivered a historic real terms cut in EU spending;
· the present proposal would allow approval
of remaining UK programmes;
· given that the overall ceiling for commitments
for the current MFF would remain unchanged, and that payments
are unaffected in any way, the Government is minded to support
the proposal to activate Article 19 of the MFF Regulation in this
instance; and
· as a directly consequential proposal,
allowing for the partial transfer of unused 2014 commitments to
2015, it is also minded to support DAB No. 2/2015.
Previous Committee Reports
None.
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