Select Committee on European Union Thirty-Third Report

PART 5: Summary of Conclusions

Scrutiny of the annual EC Budget

46.  Although the Financial Perspective sets the overall budgetary spending limits for the annual Budget, and individual spending programmes determine much spending in advance, scrutiny of the annual EC Budget remains important. We appreciate the efforts the Government has already made to coordinate with us over scrutiny of the annual Budget—these have helped our scrutiny of the 2004 Budget—and we ask the Government in the future to bring forward as far as possible production of its Explanatory Memorandum on the PDB to facilitate further the scrutiny process (paragraph 21).

Activity-Based Budgeting

47.  The 2004 EC Budget is the first to be presented in the new Activity-Based Budgeting (ABB) format. By focusing spending on outputs rather than inputs, ABB will allow more effective scrutiny in future of value for money. We therefore welcome the introduction of ABB. Over time, ABB will enhance transparency by linking expenditure to clear objectives that can be evaluated through performance indicators. We are encouraged to hear there is wide-spread support for the system both from other Member States and the Commission. We accept that it will take time for the full benefits of ABB to be felt, but we urge the Government to press the EU institutions to make as much use as possible of this new system in evaluating and, where necessary, improving value for money in the way in which EC moneys are spent (paragraph 22).

The 2004 Budget

48.  We note with approval that the proposed 2004 PDB expenditure levels are within the ceilings set by both the 1999 Berlin European Council and the 2002 Copenhagen European Council (paragraph 26).

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