Photographer: Matthew Lloyd/Bloomberg

U.K. Losing Millions of Pounds to EU Funding Errors, Panel Says

  • Osborne called to act over fines for mismanagement of money
  • Mistakes cost Britain 650 million pounds between 2005 and 2015

U.K. Chancellor of the Exchequer George Osborne must take urgent action to improve administration after government departments lost more than 650 million pounds ($950 million) in fines for errors in spending European Union cash, a panel of lawmakers said.

Britain had the sixth-worst record in the 28-nation bloc for having to return money for farming that was “not used or administered in accordance with EU regulations and national rules,” the cross-party House of Commons Public Accounts Committee said on Wednesday in an e-mailed report.

“Government inaction on EU penalties is costing taxpayers dear,” Meg Hillier, a Labour lawmaker and chairwoman of the committee, said in an emailed statement. “Money intended to support projects and programs in the U.K. is instead being lost. The apparent lack of practical concern about this fact until recently will anger many people, whatever their views on Britain’s EU membership.”

Britain adds extra complexity to already complicated agriculture funding programs, and only Greece, Romania, Portugal, Bulgaria and Cyprus had to pay back more money between 2005 and 2015, the committee said, citing National Audit Office data. The U.K. lost 2.70 pounds for every 100 pounds in EU funding compared to 10 cents for every 100 euros in funding for Germany, Latvia, Austria and Estonia.

The private sector and universities perform better in their use of EU money, the committee said, urging the government to learn from their experience and that of other EU states. The Department for Environment, Food and Rural Affairs told the committee it plans to get the level of penalties down to 2 percent by 2020.

“As a priority the Treasury and departments must identify the reasons they keep being penalized and take whatever action is necessary to rectify their mistakes,” Hillier said. “The experiences of EU member states, the U.K. private sector and U.K. universities point to some simple overall conclusions: the government has much to learn and the sooner it learns it, the better.”

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