Documents considered by the Committee on 14th October 2015 - European Scrutiny Contents


29 2015 General Budget and EU Solidarity Fund

Committee's assessment Politically important
Committee's decisionCleared from scrutiny
Document detailsDraft amending Budget No. 4 to the general budget 2015 accompanying the proposal to mobilise the European Union Solidarity Fund for Romania, Bulgaria and Italy
Legal baseArticle 314 TFEU and Article 106a EURATOM; co-decision; QMV
DepartmentHM Treasury
Document Numbers(36796), 8015/15, COM(15) 161

Summary and Committee's conclusions

29.1 We have recently cleared from scrutiny a number of documents concerning applications for assistance from the EU Solidarity Fund, which releases emergency financial aid following a major disaster in a Member State or candidate country. However we have kept under scrutiny this related Draft Amending Budget, pending further information from the Government as to how it is sure that there was no scope for budgetary reallocations, rather than recourse to a Draft Amending Budget in this case.

29.2 The Government now explains to us more fully how it seeks to ensure that budgetary reallocations are used rather than having recourse to Draft Amending Budgets and how it often votes against Draft Amending Budgets relating to EU Solidarity Fund cases.

29.3 We are grateful to the Government for its fuller explanation about how it deals with Draft Amending Budgets, particularly in relation to EU Solidarity Fund proposals, and we now clear this document from scrutiny.

Full details of the document: Draft amending Budget No. 4 to the general budget 2015 accompanying the proposal to mobilise the European Union Solidarity Fund for Romania, Bulgaria and Italy: (36796), 8015/15, COM(15) 161.

Background

29.4 The 2013 Interinstitutional Agreement on budgetary matters[ 172] provides the possibility of finance for the EU Solidarity Fund (EUSF), which releases emergency financial aid following a major disaster in a Member State or candidate country. In September we cleared from scrutiny a number of applications for financial aid from the Fund, having been reassured by the Government as to the process of assessing such applications.

29.5 At the same time we considered again this associated Draft Amending Budget (DAB), which we decided to keep under scrutiny pending further information from the Government. We remained concerned about the use of DABs to finance agreed EUSF applications. The Government had told us that it encourages the Commission to demonstrate that it has taken potential for reallocations into account when producing DABs. But in the Commission's document concerning this DAB there appeared to be no mention of the potential, or otherwise, for reallocations. So we were unclear as to how the Council's Budget Committee, on which we presumed the Government is represented, would be able to determine that the Commission had taken any potential for reallocations into account when producing this DAB. So we asked for a further explanation from the Government as to how it is sure that there was no scope for budgetary reallocations, rather than recourse to a DAB in this case.

The Minister's letter of 12 October 2015

29.6 The Financial Secretary to the Treasury (Mr David Gauke) writes now in response to our question about the use of a DAB in this case. Stating that the Government rigorously presses the Commission to identify reallocations when proposals to mobilise the EUSF are presented to the Budget Committee, he says that:

·  in the case of this DAB, the proposal was considered at the Budget Committee meeting on 21 May;

·  while historically the Government has voted against EUSF proposals which request additional funds, this DAB was published during Dissolution, and the Government therefore abstained on scrutiny grounds;

·  at the meeting, the like-minded group intervened to express dissatisfaction that the Commission had not identified reallocations in this case;

·  however, the Commission's position remained that reallocations could not be found; and

·  given the desire to show solidarity to Romania, Bulgaria and Italy, the small sums involved, and the fact that this proposal was consistent with the Multiannual Financial Framework ceiling, the DAB was approved with only the UK abstaining.

29.7 The Minister continues more generally, saying that:

·  the 2013 Interinstitutional Agreement places a duty on the Commission to explore the scope for reallocations prior to mobilising the EUSF;

·  this Agreement, adopted under Article 295 TFEU, places a legally binding obligation on the Commission in this respect;

·  while the Commission's explanatory memorandum on the DAB does not make reference to the scope for reallocations, the related Decision confirms that the obligation under the Interinstitutional Agreement has been taken into account;

·  nevertheless, the Government continues to challenge the Commission to identify reallocations when EUSF DABs are presented, and it has tended to vote against such DABs to convey its objection at the use of additional funds for this instrument;

·  the Government will continue to take this strong stance and to remind the Commission of its legal obligations in this area;

·  as noted previously, the Commission is best placed to assess the take-up of programmes from year to year and identify where funding can be reprioritised to reduce the need for new appropriations;

·  recent DABs show that the Commission is responding to this message and seeking to identify redeployments where possible, notwithstanding new budget pressures;

·  for example, zero new payment appropriations have been requested under the most recent DABs, relating to the proposals to respond to the migration crisis — DAB No. 5/2015[ 173] and DAB No. 7/2015;[ 174] and

·  in these cases the Commission has found payment reallocations from under-implemented or delayed programmes across a range of Headings and in the latter case it also identified €70.5 million (£52 million) in redeployed commitment appropriations, reducing the need for new commitments in 2015.

29.8 In conclusion the Minister says that the Government's overarching priority is to ensure any DABs agreed are consistent with the delivery of the Multiannual Financial Framework and that he notes that this DAB was fully consistent with the 2015 ceiling.

Previous Committee Reports

First Report HC 342-i (2015-16), chapter 34 (21 July 2015) and Third Report HC 342-iii (2015-16), chapter 26 (9 September 2015).


172   Interinstitutional Agreement of 2 December 2013 on budgetary discipline, on cooperation in budgetary matters and on sound financial management, 2013/C 373/01. Back

173   (36881), 9000/15: see First Report HC 342-i (2015-16), chapter 4 (21 July 2015) and Fourth Report HC 342-iv (2015-16), chapter 17 (16 September 2015). Back

174   (37122), 12502/15: see chapter 30 of this Report. Back


 
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Prepared 14 October 2015