APPENDIX 2: LETTER FROM LORD GRENFELL
TO KITTY USSHER MP, ECONOMIC SECRETARY, HM TREASURY, 11 JULY
2007
Thank you for your Ministry's Explanatory Memorandum
dated 6 June and for meeting with Sub-Committee A on 5 July. The
Sub-Committee have now considered the Preliminary Draft Budget
and have cleared the item from scrutiny. As is usual practice,
the Committee plans to publish a Report on the Budget in due course.
We broadly agree with the Government's position and
endorse your priorities. We fully support the Government's efforts
to ensure that the principles of affordability, efficiency and
value for money underpin all proposed expenditure to the EC budget.
The Sub-Committee were also pleased to hear that the Government
is still minded to focus the Regional Development and Social Funds
where they are most needed. In giving evidence, you discussed
hoped-for improvements in the draft budget to be agreed on 13
July. We would be grateful if you would write to the Committee
after 13 July to update us on progress at Budget ECOFIN.
As the Sub-Committee discussed with you at the meeting
last week, the Committee has particular concerns relating to the
form and transparency of the funding of the Galileo Project. We
support your stance to refuse to raise the Financial Perspective
ceilings to fund the Project. However, we remain concerned that
other Member states will not support your position and that the
Government's views may not prevail at Transport Council. The Sub-Committee
would appreciate regular updates on the progress of this dossier.
The Sub-Committee also noted that there appear to
be a variety of opinions on the form and purpose of the European
Institute of Technology. The Sub-Committee strongly opposes the
dedication of a contingency fund towards any purpose other than
as a reserve for an urgent situation, and so does not support
the Commission's planned use of this as a funding mechanism for
the European Institute of Technology. We support your stance that
funding for the European Institute of Technology should be found
by transparent means within the existing Financial Perspective
headings, and also urge the Government to work with all stakeholders
to agree on the purpose of the Institute.
The lack of transparency surrounding the funding
of the Commission's Agencies remains a concern, and is a subject
which we may choose to return to in the future. We would welcome
news of any steps you are able to take in Budget ECOFIN to improve
monitoring of their management, budgets and output.
You agreed to write to the Committee with more information
regarding the External Borders Funds, which appears to have had
its budget frozen; to give more information on the purpose of
the "mobility" line of the administration budget and
the reason for its significant increase. The Sub-Committee also
noted your aim to negotiate a lower number of additional staff
for the Commission.
The Sub-Committee have asked me to emphasise the
conclusions of their Report Financial Management and Fraud
in the EU. Although this is not directly related to the matter
at hand, the Committee noted that some progress has been made
in this field. Given the orders of magnitude involved, the Sub-Committee
urge the Government to show real determination in energising other
Member States to scrutinise actively their own expenditure of
EU funds.
Finally, Baroness Cohen and the Sub-Committee's Members
have asked me to thank you for giving evidence so promptly after
taking up your new post. We look forward to working with you both
on this issue and on other dossiers in the future.
I am copying this letter to Michael Connarty MP,
Chairman of the Commons Committee; Alistair Doherty, Clerk to
the Commons Committee; Michael Carpenter, Legal Adviser to the
Commons Committee; Les Saunders, Cabinet Office; Ian Moules, European
Union Scrutiny and Infractions Branch and Eleanor Padfield, European
Union Coordination and Strategy Team, HM Treasury.
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