Documents considered by the Committee on 23 November 2011 - European Scrutiny Committee Contents


21 Effectiveness of school milk and school fruit schemes

(33301)

16099/11

Special Report No. 10/2011 of the European Court of Auditors: "Are the School Milk and School Fruit Schemes effective?"

Legal base
Deposited in Parliament3 November 2011
DepartmentEnvironment, Food and Rural Affairs
Basis of considerationEM of 8 November 2011
Previous Committee ReportNone
To be discussed in CouncilNo date set
Committee's assessmentPolitically important
Committee's decisionCleared

Background

21.1 Under the CAP, the EU has two similar instruments specifically targeting children:

  • the School Milk Scheme, through which grants have been available since 1977 for the sale of reduced-rate milk products in schools;
  • the School Fruit Scheme, which has co-financed the distribution of fruit and vegetables in schools since the 2009-2010 school year.

Both schemes pursue the same two objectives of helping to stabilise the market and to promote healthy eating, and whereas the Milk Scheme in particular was originally seen as a way of disposing of stocks, the Commission has gradually come to present better nutrition as the main objective. Both schemes also aim to achieve a twofold impact — to increase or maintain the consumption of these products in the short term, whilst having an educational influence on eating habits in the long term.

The current document

21.2 In this Special Report, the Court of Auditors has conducted a combined examination of the effectiveness of both schemes, although, since the School Fruit Scheme was only launched in 2009, the principal emphasis has been on the effectiveness of the School Milk Scheme, supplemented by a comparative review of the system now being set up for fruit.

21.3 The audit sought to establish whether:

  • participation was sufficiently encouraged, and whether it had been enough for the objectives to be achieved;
  • spending has had a direct impact on the beneficiaries' consumption of the products distributed (and, in particular, whether the products would be consumed if no aid were available);
  • the schemes are likely to meet their educational objectives and influence future eating habits.

21.4 The audit looked at the 2008-2009 and 2009-2010 school years, and was carried out at the Commission and in Germany, France, Italy, Poland, Sweden and the United Kingdom,[124] which accounted for 75% of payments under the Milk Scheme in 2009, and 63% of the budget estimate for the first year of the Fruit Scheme. It examined the procedures set up by the Commission and the Member States for implementing and monitoring the schemes, and visited 31 applicants receiving aid on behalf of over 40,000 educational establishments and some two million children. Further visits were made to 56 establishments (attended by over 16,000 children) participating in at least one of the schemes.

OVERVIEW OF THE TWO SCHEMES' ADMINISTRATIVE ARRANGEMENTS

21.5 The Court noted that both forms of support are paid directly to schools or to other applicants, which may be education authorities, suppliers or intermediary bodies set up specifically for that purpose. Once approved, applicants have operational responsibility for the supply procedure (purchase, storage, distribution and administration).

Milk products

21.6 Aid comes in the form of a fixed-rate EU subsidy of €18.50 euro for 100 kilogrammes of milk, with no obligation for Member States to contribute. Each establishment decides whether or not to participate, and the EU contribution is calculated on the sum of the eligible applications which are received. No budgetary ceiling has been defined, but the Regulation provides for a maximum subsidisable quantity of 0.25 litre per school day and per pupil in regular attendance at the establishment (which the Court says is not usually reached by the applicants).

21.7 Although the scheme may take any number of different forms, three models in particular were seen in the Member States visited — subsidies for milk products[125] included in canteen meals (mainly France , Italy and Sweden) which accounted for 44%; milk sold at a reduced price outside canteens (Germany, Poland, and the UK (children above 5 years of age)), which accounted for 33%; and milk distributed free of charge outside canteens (mainly Poland, and the UK (children up to 5 years of age)), which accounted for 23%.

Fruit and vegetables

21.8 EU aid accounts for between 50% and 75% of the cost of the fruit and vegetables distributed, including certain associated charges, with the remainder usually being financed by the Member States. The Regulation sets an overall budget ceiling of €90 million, shared among the participating Member States, with each Member State free to decide, through its national strategy, how to divide its national allocation among potential applicants. All of the fruit that the auditors saw being distributed was free of charge and supplied outside mealtimes. However, support for the distribution of fruit is conditional on the mandatory adoption of accompanying educational measures to ensure that the scheme is a success. Although ineligible for EU funding, these measures are considered a crucial part of the scheme.

21.9 The Court noted that, to a large extent, both schemes are now grounded in the hypothesis that there is a positive link between public health and the consumption of these subsidised products, and says that it did not set out to test that hypothesis, because it is not mandated to do so. However, it finds that the hypothesis is not universally accepted. It also observes that, ten years after the Council's decision to maintain the School Milk Scheme, despite its being rated very negatively and a proposal from the Commission that it should be terminated, the scheme has not been significantly modified, and, at best, still has very limited impact, particularly in relation to the short-term aim of increasing consumption.

21.10 It also comments that:

  • owing in particular to the low subsidy rate, the scheme continues to be relatively unattractive and, as a result, generally has no more than a deadweight effect, in that the products subsidised would in most cases either have been included in canteen meals anyway or would probably have been bought by the beneficiaries even without the subsidy;
  • whilst the decision by certain Member States to organise distribution free of charge has resulted in a more satisfactory impact, this form of distribution is at present covered by costly national schemes to which the EU budget makes only a marginal contribution;
  • as regards the anticipated long-term aim, the scheme at present takes insufficient account of the stated educational goals, with distribution not always being made in a visible manner, and with no other specific educational measures having been introduced.

21.11 On the other hand, the Court did find that most of the weaknesses which were identified in respect of school milk had been noted and, at least in part, taken into consideration by the Commission in its planning of the Fruit Scheme. The main consequences were the adoption of a single model for distribution, which is made free of charge and outside the canteens, and the introduction of tools to facilitate the educational goals, but it added that these improvements came at a high cost, a significant part of which is borne by national and local budgets. However, it also says that, whilst it is still too early to come to any definitive conclusions about the new scheme's ultimate effectiveness, it does nonetheless appear considerably more likely to achieve its short-and long-term objectives (and thus to offers some indication as to how the Milk Scheme might be improved).

21.12 In the light of these findings, the Court's main recommendations are that, in view of the very limited impact of the Milk Scheme, whether or not to retain it should be made conditional on thorough reforms being made to remedy the weaknesses which have been identified. In particular, account should be taken of the product's recognised nutritional value in the light of the public health objectives, and, if thorough reforms are to be undertaken, they should be based on the following considerations:

  • If the Milk Scheme is to have a real impact on the volume of milk consumed in schools, the subsidy paid per kilogramme should be increased very significantly to a level where distribution can be free of charge. However, this would not entail increased EU spending, but rather focusing resources on a narrower target population, which could also effectively contribute to addressing the problem of deadweight. The population to be targeted would have to be determined in the light of a scale of nutritional needs.
  • Where the Milk Scheme is concerned, steps should be taken to limit the specific deadweight effect associated with distribution through canteens, whilst taking care to ensure maximum visibility for the scheme.
  • Where the educational objectives are concerned, the two schemes should adopt a more harmonised assessment of the role and importance of accompanying measures. If the importance of these measures is confirmed, the desirability of making them eligible for EU co-financing could be reconsidered.
  • More generally, there should be greater coordination and synergy between the two schemes in order to ensure that they present a harmonised approach to nutrition and are managed efficiently.

21.13 In its response to the report, the Commission has noted that various revisions to the School Milk Scheme have taken place over the last decade with a view to increasing its effectiveness, and it does not share the Court's assessment of the extent of the Scheme's weaknesses.

The Government's view

21.14 In his Explanatory Memorandum of 8 November 2011, the Minister of State for Agriculture and Food at the Department for Environment, Food & Rural Affairs (Mr James Paice) says that the Court's findings are of interest to the UK, which not only participates in the School Milk Scheme, but also provides additional 'top-up' subsidies (from national budgets) to schools in receipt of these EU funds. (On the other hand, the UK does not currently participate in the EU School Fruit Scheme, believing it would be far more financially effective for Member States to run their own fruit scheme, as the UK does).

21.15 The Minister notes that the Commission has recently published a series of proposals, setting out the proposed legislative framework for the Common Agricultural Policy (CAP) in the period 2014-20, and that the proposal[126] establishing a common organisation of agricultural markets would continue the EU School Milk Scheme with certain modifications, and would specify the products eligible for the Scheme; the national or regional strategies which Member States must draw up in order to benefit from the aid; and the conditions for granting aid. He also notes that this is accompanied by a proposal to increase the budget for the EU School Fruit Scheme from €90 million to 150 million, and to reduce the percentage of Member State co-financing from 50% down to 25% (or 10% in convergence and outermost Regions).

21.16 The Minister says that the UK is committed to a CAP which provides improved value for money, is significantly simpler overall for beneficiaries, administrators and paying agencies, and can be operated more cheaply and more efficiently than the current regime. He adds that it will work constructively with the Commission on ways to improve the effectiveness of the School Milk Scheme and its use of resources.

Conclusion

21.17 Since the School Milk Scheme continues to be of political interest, we think it right to draw to the attention of the House this report by the European Court of Auditors, which makes a number of pertinent observations on the way in which it has operated, as well as recommendations for improving it. Having said that, we do not think any further consideration is called for, and we are therefore clearing the document.





124   Sweden and the UK only participate in the Milk Scheme. Back

125   For example, in France, portions of cheese or yoghurt as a dessert (canteens); in Italy, parmesan on a serving of pasta or mozzarella in a salad (canteens); in Sweden, self-service milk fountains during meals (canteens); in the UK and Poland, cartons of milk sold at a reduced rate or distributed free of charge to younger children, mainly with help from the national budget; and, in Germany, cartons of flavoured milk sold at a reduced rate in school shops. Back

126   (33258) 15397/11: see chapter 19 of this Report. Back


 
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