Auditors slam EU rural development spending as complex and unfocused

Support for young farmers in the 2007-2013 EU budget did not deliver measurable results. [Fotokostic/Shutterstock]

The European Court of Auditors criticised on Tuesday (14 November) the EU’s rural development programme for its slow implementation of spending and lack of focus on measurable results.

The EU’s Luxembourg-based auditors analysed a sample of ten regional development programmes to see whether they focused adequately on performance and the delivery of good quality development projects. They then compared the results against performance from the previous EU budget (2007-2013) to assess the progress made.

The EU’s rural development policy is delivered through the second pillar of the Common Agricultural Policy (CAP), which aims to use agriculture to leverage development in the broader rural economy. With €99bn for the period 2014-2020, rural development accounts for about 10% of all EU farm spending, via the European Agricultural Fund for Rural Development (EAFRD).

Unnecessarily long documents

“The European Commission requires too much paperwork,” Janusz Wojciechowski, the Member of the European Court of Auditors responsible for the report, told journalists at a briefing in Brussels on Tuesday.

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Member states – or federal regions responsible for obtaining funding – submit lengthy application documents to the EU executive for approval before their projects can begin.

But these are often so long that they take months to analyse, delaying the beginning of the funding cycle.

The 28 member states and their regions submitted 118 separate regional development programmes for the period 2014-2020, ranging from Ireland’s relatively slim 456-page document to Greece’s weighty 1,192 pages. Analysis began at the end of 2013, taking on average more than 11 months per document.

With such a delay from the outset, most EU countries began dispensing rural development funding at least a year behind schedule: Poland’s programme was the first to be approved in December 2014, and Greece’s the last in December 2015, two years after the start of the financial period.

Breaking the vicious cycle

This delay early on means funding is pushed back throughout the budget period, causing a knock-on effect on the quality of the projects delivered.

“Delays in spending mean an accumulation of money at the end with a higher risk of poor quality spending,” the auditors said. When this happens, member states tend to focus on absorbing all the funds available within the time allowed, rather than on ensuring that spending has the desired impact, auditors point out.

Funding recipients have until 2023 to spend all their EAFRD allocations for the 2014-2020 budget period.

“The Commission should use data from previous spending to prepare the next programme,” said Wojciechowski. But “planning for a new period always faces the problem of starting before adequate, relevant data are available from previous periods”.

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Many rural areas suffer from high levels of unemployment and lack vital infrastructure like high-speed internet and transport connections: the EU’s rural residents are up to twice as likely as city-dwellers to experience poverty or social exclusion.

For example, at the start of 2017, almost half way through the seven-year budget cycle, just 10% of the €99bn EAFRD envelope had been spent. This makes any meaningful mid-term assessment impossible and causes further delays in the development of the next budget programme.

“Breaking this vicious cycle is a big political problem,” Wojciechowski admitted.

Focus on results, not outputs

Not only are programming documents “too complex and voluminous”, they are also “insufficiently focused on expected results,” said Wojciechowski. The auditors stressed that an improved focus on measurable results, rather than general “outputs”, was necessary to ensure EU spending delivered on its promises.

The auditors gave the example of young farmers, who received €10bn in support from the EU during the previous budget period. This support was approved despite a lack of clear objectives, and its impact has been hard to measure.

“The money is the input, the support is the output, but where is the result?” asked Wojciechowski. In fact, despite the support, the number of young farmers and the amount of land they managed fell during the 2007-2013 budget.

Recommendations for post-2020

As the EU executive daws up its plans for the budget after 2020, the auditors made several recommendations to ensure regional development funding is spent as efficiently as possible.

They encouraged the Commission to demand more detail on measurable results that applicants hoped to achieve, beyond the broad overview of “inputs and outputs” that characterise many regional development programmes.

They also called for clearer performance indicators and reporting practices to improve the data available for the next financing round, and the sharing of best practice between member states and regions.

Finally, and most importantly, the ECA recommended that the European Parliament and Commission conduct a “comprehensive spending review” before adopting the post-2020 budget.

“We need a new philosophy of budgetary policy for the future of Europe,” said Wojciechowski.

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