Select Committee on European Scrutiny Seventh Report


COM(00) 788

Commission Communication on externalisation of the management of Community programmes, including presentation of a Framework Regulation for a new type of executive agency.

Draft Council Regulation laying down the statute for executive agencies to be entrusted with certain tasks in the management of Community programmes.

Legal base: Article 308 EC; consultation; unanimity
Department: HM Treasury
Basis of consideration: Minister's letter of 18 October 2001
Previous Committee Report: HC 152-i (2001-02), paragraph 5 (18 July 2001)
To be discussed in Council: No date set
Committee's assessment: Legally and politically important
Committee's decision: Not cleared; further information requested


4.1  As part of its process of reform, the Commission set out in December 1999 to develop a coherent and manageable policy of 'externalisation', i.e. the carrying out of executive tasks implementing Community policies by bodies other than the Commission. The objective is to allow the Commission's permanent staff to be assigned to its essential tasks, to regain control of executive and support activities and, overall, to improve efficiency.

4.2  We considered the document, which consisted of a Communication from the Commission together with a proposed Council Regulation, on 18 July. We noted that the Communication referred to three types of externalisation. "Devolution" is the delegation of executive responsibilities to Community public bodies such as executive agencies. "Decentralising" is the delegation of executive responsibilities to national public bodies "with a public service mission backed by the State" and which would act as partners in implementing some Community policies. "Outsourcing" would take place through the letting of contracts to the private sector.

4.3  "Devolution" in this sense is the subject of the proposed Council Regulation. We noted that Article 4 of the draft Regulation provided for an executive agency to be a Community body with a legal personality separate from the Commission, and that Article 6 provided that the Commission may entrust an executive agency with any tasks required to implement a Community programme, "except for those demanding discretionary powers in translating political choices into action".

4.4  We were concerned that the creation of bodies with legal personalities separate from the Commission would be inconsistent with the principle, set out in the preamble, that recourse to an agency did not relieve the Commission of its responsibilities under the Treaty, particularly Article 274 EC.[14]

4.5  We also expressed concern that the draft Regulation was far from clear on the question of which tasks may be delegated by the Commission to an agency. The exception of tasks "demanding discretionary powers in translating political choices into action" seemed to us to be vague and difficult to apply in practice.

4.6  We asked the Minister for her comments on these two points.

    The Minister's letter

4.7  In her letter of 16 October 2001, the Economic Secretary to the Treasury (Ruth Kelly) comments on the first point as follows:

"In my view, an agency would be entrusted with a task by the Commission, and would carry out the task on behalf of the Commission — as its agent. Its separate legal personality would not affect its status as agent; it would simply mean it was constituted in a legal form that would enable it to carry out its (agency) functions to best effect. When the Council's Budget Committee considered this proposal, they suggested to the Commission that the reference to the Commission's continuing responsibility should be made more explicit."

4.8  On the question of defining which tasks could be devolved to an agency under the Regulation, the Minister comments as follows:

"You also asked about the type of tasks which may be delegated to an agency, and how the avoidance of tasks 'demanding discretionary powers in translating political choices into action' would apply in practice. The Council's Budget Committee also raised queries on this and asked for the proposal to contain a clearer statement of the responsibilities and the nature of the delegation of powers to agencies."

4.9  The Minister goes on to explain that the Commission's initial response was to prepare a list of potential tasks which they considered appropriate for agencies. The list of tasks includes research, analysis, feasibility studies, cost-benefit analysis, and the administration or implementation of actions or programmes for which the political decisions have already been made. The Minister summarises the position in terms that "the Commission will direct the tasks of the agencies, but the agencies will carry out the tasks on behalf of the Commission".


4.10  We thank the Minister for her helpful reply. We accept that the Commission's responsibility is not necessarily diluted by the devolution of functions to agencies having their own legal personality, but this will depend on the degree to which the Commission assumes responsibility for all that is done on its behalf by an agency. We agree that the continuing responsibility of the Commission should be made clearer in the Regulation, and we shall look forward to further information from the Minister as to how this has been achieved.

4.11  We note that others have also criticised the vagueness of the scope of the delegating power in the draft Regulation, and we shall look forward to an account by the Minister of progress in defining this more clearly.

4.12  We shall hold the document under scrutiny pending the Minister's reply.

14  "The Commission shall implement the budget...on its own responsibility and within the limits of the appropriations, having regard to the principles of sound financial management". Back

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