Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents

64 EU decentralised agencies

Committee's assessment Politically important
Committee's decision(a) Cleared from scrutiny; further information requested; (b) Cleared from scrutiny
Document details(a) Progress report on the implementation of the Common Approach on EU decentralised agencies (b) Guidelines on key performance indicators (KPIs) for agency directors
Legal base

Document numbers

Foreign and Commonwealth Office

(a) (36839), 8789/15, COM(15) 179

(b) (36697), 7496/15, SWD(15) 62

Summary and Committee's conclusions

64.1 Both documents are relevant to the Common Approach and follow-up Roadmap for EU decentralised agencies. The Common Approach provides a set of principles for EU decentralised agencies to help them streamline their activities and improve their performance. In the Roadmap, the Commission set out in detail how it intended to follow-up on the Common Approach, listing 30 action points and deadlines for itself, agencies, Member States, the European Parliament and the Council.

64.2 Document (a) is the second Commission progress report on the progress of the Commission and decentralised agencies' implementation of the Common Approach. It supersedes a first progress report which was published in December 2013[ 465] but this document was not considered by our predecessors as it was not deposited by the Government (an oversight for which it now apologises). The report shows some progress has been made on the implementation of the roadmap. It focuses on the setting up, operation and evaluation/audit of agencies and their management of financial/human resources and budgetary process. It also looks at the revision of agencies' founding acts and the role of Commission representations on agencies' boards.

64.3 Document (a) also references a separate report by the Network of EU Agencies on specific actions set out in the Roadmap which was sent to the President of the European Council on 27 February 2015.

64.4 Document (b) sets out guidelines on the introduction of the Key Performance Indicators (KPIs) which are intended to measure the performance of the agency directors as proposed under the Common Approach and Roadmap.

64.5 The Commission suggests that as agencies vary so much, no one set of indicators could be used to measure performance across the board, and therefore proposes that the management board of each agency choose from a set of agreed indicators those that are best suited to measure their Director's performance. They cover both operational objectives (encompassing work programme and annual report) and financial and human resource management (spanning budgetary and financial discipline, internal control systems; fulfilment of the Agency's establishment plan and the level of staff wellbeing).

64.6 The Government welcomes both documents, with qualifications. It has made efforts to ensure the Commission's commitment to an overall 5% reduction in agency staffing is implemented, but is disappointed that the 2015 EU Budget shows a 6% year on year increase in agency expenditure.

64.7 We thank the Minister for his Explanatory Memorandum and letter addressing document (a). We note the Minister's apology for the non-deposit of the first progress report. As this is now superseded by the second progress report (document (a)), on this occasion we do not insist on deposit of the earlier document. We commend the efforts of the Government to ensure that the 5% reduction in agency staff is delivered, but share its disappointment at the 6% "year-on-year" increase in agency expenditure.

64.8 Document (b) is technical in nature and not inherently important. However, we report it briefly to the House because of its possible relevance to the outcome of the Government's review of agencies, initiated by its predecessor. This could identify shortcomings in the management of agencies as a factor affecting their performance. We ask the Government for an update on how that review is progressing and when we will be informed of the outcome.

64.9 In the meantime, we clear both documents from scrutiny.

Full details of the documents: (a) Progress report from the Commission on the implementation of the Common Approach on EU decentralised agencies: (36839), 8789/15, COM(15) 179; (b) Commission Staff Working Document: Guidelines on key performance indicators (KPIs) for directors of EU decentralised agencies: (36697), 7496/15, SWD(15) 62.

Background and previous scrutiny

64.10 These are new documents which we have not previously scrutinised. They are connected, however, to two documents that our predecessors have retained under scrutiny: the Commission Roadmap on the follow-up to the Common Approach on EU decentralised agencies[ 466] and the Communication from the Commission to the European Parliament and the Council — Programming of human and financial resources for decentralised agencies 2014-2020.[ 467]

64.11 The documents were held under scrutiny because the previous Government has been conducting a cross-departmental review of the performance of EU decentralised agencies which it initiated in 2013. We understand from the previous Government's most recent correspondence on the review (8 October 2014) that it had decided to broaden and deepen its analysis of feedback from departments in the light of developments such as the creation of an Inter-institutional Working Group (IIWG) on resources for decentralised agencies, the conclusion of the Balance of Competences review and a new Commission.

The Government's view of both documents

64.12 In two separate Explanatory Memoranda of 15 June 2015 the Minister for Europe (Mr David Lidington) addresses these respective documents. He makes some remarks which are common to both documents, namely that the Government:

·  continues to welcome efforts to ensure that EU decentralised agencies operate with improved efficiency, accountability and greater coherence;

·  therefore welcomes, with the qualifications outlined further below, the Commission Roadmap and progress reports (including document (a)) and the KPIs (document (b)); but

·  continues to be disappointed that the EU Budget 2015 saw "a 6% year on year increase in expenditure on decentralised agencies", believing that EU institutions such as agencies should be subject to maximum budgetary restraint and to the same cost cutting measures and resource constraints as Member States.


64.13 The Minister says that the Government:

·   welcomes the work undertaken by the Commission and the agencies to implement the Roadmap but that it must continue to be seen as a "work in progress", reflecting the Commission's commitment to follow-up implementation;

·  notes the Commission's start-up toolkit on the procedures to be followed when an agency is being set up, but believes that whether a host country signs a headquarters' agreements with an EU agency located in their country is a decision for them after discussions with the agency concerned; and

·  supports efforts to maximise efficiencies in how the agencies operate, and notes progress in some areas and also efforts to prevent conflicts of interest and the adoption of anti-fraud strategies.

64.14 The Minister also welcomes the Multi-Annual Financial Framework 2014-2020 provision to progressively reduce EU staffing levels[ 468] by 5% over five years (the staffing target). Noting progress to streamline Human Resource practices across the agencies, he tells us that:

·  the IIWG met twice in 2014 and took forward the staffing target, with an expectation that it will be reached by 2018; and

·  the Government takes an active role in IIWG meetings to advance the reform agenda and, in particular, has intervened during a number of Working Groups and Committee Councils to influence the progress towards the staffing target.

64.15 The Minister adds:

    "The Government welcomes the Commission's commitment that the reforms undertaken will remain relevant in the coming years. We will continue to monitor closely Commission and agency efforts to reform, streamline and adapt to meet the realities of resource constraints in the years to come, and will continue to push for further budgetary restraint."

64.16 He further explains that wider work is planned at EU level on agency reform. The European Parliament recently published two documents for the IIWG which focussed on the financing of the agencies and potential for efficiency gains, including:

·   streamlining agencies' competences to reduce any overlap;

·   reconsidering the criteria for choosing a location for an agency; and

·  looking at the partially and fully self-funded agencies.


64.17 The Minister explains that KPIs:

·  are another step towards greater coherence between the agencies and a standardised way of measuring the performance of their directors, but should not be seen as a single source of measuring director or agency performance; and

·  only measure the areas within the direct control of the director and not the agency as a whole "where performance could be affected by a multitude of factors".

64.18 However, he says that the Government welcomes measures which will more closely monitor the budgets of the agencies. He adds however that the Government is concerned that:

·   there is no provision in the guidance on how the directors would be held to account should they fail to meet the standards set by the KPIs;

·  there is no measurement of the quality of agency output, which has as big an impact on performance as meeting objectives; and

·  there is no provision for reviewing the KPIs and their effectiveness and so is itself currently conducting a review with agencies on KPI effectiveness.

The Minister's letter of 18 June 2015

64.19 The Minister apologises for the Government's "regrettable oversight" in failing to deposit the first progress report referred to in document (a), which has only just "come to light". The document was presented by the Commission without a formal inter-institutional cover and "slipped through" the normal scrutiny processes. Recognising the importance of our scrutiny role, the Minister says that he remains committed to updating us in a timely manner on issues involving decentralised agencies.

Previous Committee Reports

None, but see (34625), 5022/13: Thirteenth Report HC 219-xiii (2014-15), chapter 16 (15 October 2014); Thirty-second Report HC 86-xxxii (2012-13), chapter 4 (13 February 2013); (35208), 12421/13: Thirteenth Report HC 219-xiii (2014-15), chapter 16 (15 October 2014); Thirteenth Report HC 83-xiii (2013-14), chapter 15 (4 September 2013).

465 Back

466   (34625), 5022/13, -: Back

467   (35208), 12421/13, COM(13) 519: Back

468   Of all EU institutions, bodies and agencies Back

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Prepared 30 July 2015