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Friday 11 November 2011

TPA – EU Accounts Whopper

One of the hoariest of EU-bashing chestnuts is the assertion that the accounts have either never been signed off, or haven’t been signed off for many years. This has been recycled into appropriate knocking copy by Jonathan Isaby, the newest non-job holder at the so-called Taxpayers’ Alliance (TPA), who has claimed unequivocally that “The EU’s Accounts Are Not Signed Off ... Again”.

Isaby then homes in on what is called the “error rate” of 3.7%, this being around €4.5 billion for 2009-10. The inference he draws is that something less than honest is going on here, but as with anything claimed or inferred by the TPA, a reality check is in order. And that reality is that “error” does not mean “fraud” or “waste”: moreover, the accounts actually have been signed off.

So why do these “errors” happen? This is because most – around 80% - of EU spending is administered by national Governments. Not all of their processes and controls pass muster with the Court of Auditors in Luxembourg. And there are, on occasion, breaches in such things as procurement rules. Some member states are not keen on an independent audit of problem items.

And how does the UK measure up on the EU audit standard? Ah well. Sir John Bourn, UK Comptroller and Auditor, has said that if the UK had a similar test to the EU one, he might have to qualify the whole of British Central Government Expenditure. That’s another way of saying that the EU standard sets the bar high, as well as conceding that the UK might not.

The latter suggestion is not hard to point up: the 2009-10 Commons accounts had to be qualified after the Auditor General refused to sign them off. The National Audit Office (NAO) refused to sign off the MoD’s accounts – for the fourth year in a row – stating that the Ministry had failed to account properly for £6 billion of equipment. That’s more than half as much again as the EU’s “error rate” in one department.

But what about that suspicion of fraud? The proportion of the EU budget affected is not 3.7%, but 0.2%, and this is, remember, suspected fraud. And the figure does not appear anywhere in Isaby’s post. Jonathan Isaby is an intelligent individual, who could have found all these figures and links, had he been so inclined. That he has apparently not been so inclined suggests one conclusion.

And that is that the TPA – not for the first time – is generating knocking copy to fit its own agenda, rather than considering the fact of the matter. Thus the EU accounts myth is propagated, the TPA get their copy in the papers, and another organisation marked “Government” is casually demonised.

No change there, then.


acro said...

Good post! What's most depressing about the whole affair is that the same half-truths and distortions get rolled out year after year.

Can I be a pedant though and point out that the European Court of Auditors is based in Luxembourg?

Tim Fenton said...

You can indeed, and I've amended the post. Thanks for the correction.