Access Investments-European Union- ROMANIA

The European Union wasted almost £6 billion last year on fraudulent, illegal or ineligible spending projects, official auditors have found.

At a time of unprecedented European-wide austerity, the EU mis-spent almost 5 per cent of its budget in 2012 on projects that should never have received any of its money.

This so-called ‘error rate’ in Brussels spending was up from 3.9 per cent the previous year, according to the auditors. It meant that for the 19th year in a row, they refused to give the EU’s accounts a clean bill of health.

EU bureaucrats were accused of “shambolic” mismanagement yesterday in the wake of the report, with Conservative MEPs suggesting it appeared as though Brussels simply had a licence to Carry on Squandering’.

The European Court Auditors (ECA) found that 4.8 per cent of the EU’s £117 billion budget in 2012 - £5.7 billion - was spent in “error”, on projects that were either tainted by fraud or ineligible for grants under Brussels’ rules. This meant British taxpayers saw up to £832 million of their contributions to the EU wasted at a time of deep public spending cuts domestically. The EU spending watchdog found that supervision and control of Brussels spending was only “partially effective in ensuring the legality and regularity of payments underlying the accounts”. 

“All policy groups covering operational expenditure are materially affected by error,” the auditors concluded.

“For these reasons it is the ECA’s opinion that payments underlying the accounts are materially affected by error.”

A British Government spokesman yesterday described the findings as “unacceptable and undermining the credibility of EU spending”.

“When countries across Europe are taking difficult decisions to tackle their deficits, Europe’s taxpayers need to have confidence that every effort is being made to improve the way EU spending is managed,” she said.

Included among the “errors” discovered by the auditors was a Polish landowner paid almost £80,000 a year to maintain 350 acres of grassland to help preserve uncut grassland for the protection of endangered bird species. In fact, the farmer had only met the agreed funding requirements for 14 per cent of the land and the payments.

“Similar cases of non-compliance with agri-environment requirements were detected in the Czech Republic, Germany , Greece, France and the United Kingdom,” found the auditors.

The EU’s regional policy spending had an error rate of 6.8 per cent, or £2.4 billion, of the £34 billionn spent in 2012. Most ineligible funding followed a failure to follow EU laws on public procurement and issuing of contracts.

The error rate in “external relations, aid and enlargement” spending overseen by Baroness Ashton, the EU foreign minister, totalled 3.3 per cent, or £169 million of £5 billion in spending.

In one case, the European Commission paid £14 million for a programme to support female teachers in rural Bangladesh but over half the money was given with “no documentation”.

Philip Bradbourn MEP, the Conservative spokesman on EU budgetary control, described the latest audit as “another year, another story of lax monitoring and shambolic control”.

“If you found misappropriation and misspending on this scale in a commercial business — or in a properly-accountable public administration — there would be sackings all round. In Brussels, it’s ’Carry on Squandering’,” he said.

Vitor Caldeira, the president of the EU auditors, warned that poor financial planning by the European Commission for “will put added pressure on EU cash flows and may increase the risk of error over the next few years”.

“Europe’s citizens have a right to know what their money is being spent on and whether it is being used properly,” he said.

Meanwhile, EU funds worth £418 million intended to help rebuild the Italian city of L’Aquila and the Abruzzo region after an 2009 earthquake have been mired in suspected corruption, a separate European Parliament report has found.

Serious allegations have surfaced that part of the money spent on building new accommodation for the earthquake’s victims was paid to companies with “direct or indirect ties” to organised crime because it was paid in breach of public procurement rules.