TRANSFER OF APPROPRIATIONS
(STRUCTURAL FUNDS)
(18706)
—
SEC(97)2178
| Proposal for transfer of appropriations No. 59/97 — Section III — Commission — of the general budget for the financial year 1997.
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| Legal base:
| Article 26(4) of the Financial Regulation; qualified majority voting
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| Department:
| HM Treasury
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| Basis of consideration:
| Minister's letter of 21 May
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| Previous consideration:
| HC 155-xvi (1997-98), paragraph 5 (11 February 1998)
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| Committee's assessment:
| Politically important
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| Committee's decision:
| Cleared
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Background
9.1 On 11 February
when we looked at this proposal to transfer appropriations we
were concerned that appropriations which had been allocated for
Community Initiatives under the Structural Funds were being reallocated
to other Structural Funds programmes which were said to be short
of funds. We noted in our conclusions that however meritorious
the projects may be, it remains the case that this expenditure
was not included in the approved EU Budget for the 1997 financial
year and that this could be a case of money being spent just because
it was there. We asked the Minister to explain the background
and justify the transfer. We also recommended that the Document
would be relevant to the Debate on 18 February in European Standing
Committee B on the 1996 Court of Auditors' Report.
The Minister's reply
9.2 The Minister,
the Economic Secretary to the Treasury (Helen Liddell), has responded
in a letter dated 21 May in which she says:
"In
transfer 59/97, the Commission sought to transfer payment appropriations
totalling 173.5 million ECU (£128 million) to programmes
under two "Objectives" covered by the European Social
Fund (ESF) from a number of other Community Initiative programmes
under the Structural Funds which looked likely to underspend in
1997.
"In
its Report, the Select Committee expressed concern that this transfer
was funding extra Structural Fund expenditure which was not included
in the adopted 1997 EC Budget and that it could therefore be an
example of money being spent just because it was there.
"I would
like to reassure the Committee that proposals such as this where
the Commission seeks to transfer payment appropriations between
budget lines (rather than from the Reserve Chapter) are not uncommon:
about 30 per cent of the 62 EC Budget transfers in 1997 were transfers
between budget lines. These do not involve an overall increase
in expenditure but simply serve to correct the forecasts of execution
rates which underlie the figures in the adopted Budget. They are
quite different from transfers of commitment appropriations which
involve a change in the way that resources are to be allocated.
"In
respect of this transfer proposal, the Commission demonstrated
that the amounts drawn up with Member States for ESF projects
in 1997, including many in the UK, could not be matched by available
payment appropriations in the Budget. The Committee may be interested
to know that, whilst the Council agreed to this transfer proposal,
the European Parliament, which has the final say on this type
of expenditure, did not accept the proposal. It felt that the
Commission failed to explain clearly enough why the Community
Initiative programmes were still executing so slowly despite concerns
previously expressed by the European Parliament.
"The
Committee's report also noted that the transfer would be relevant
to the European Standing Committee B debate on the 1996 Court
of Auditors' Report on 18 February and I can confirm that the
issue was discussed during that debate".
Conclusion
9.3 We thank
the Economic Secretary for her response and have noted her views.
We accept that in this case the transfer was between budget lines
and would not have added to the total amounts provided in the
budget for the Structural Funds, but suggest that the degree of
inaccuracy in estimates of how the monies were to be spent within
the total programme which sparked our concern, may also have triggered
the action taken by the European Parliament.
9.4 We are now
content to clear the document.
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