Britain Paid Over £650m To EU In Last Decade As Penalty For Misspent Funds

disallowance payments

The UK Parliament watchdog has identified at least £650m in penalties, known as disallowance payments, over the past decade caused by errors in how government bodies spent European Union (EU) funds. Leave campaigners say it shows the existence of an EU funding “racket”.

The Public Accounts Committee (PAC) report sets out errors made by the Department for Environment, Food and Rural Affairs (Defra) in allocating European Union funds. It found:

“In the last decade the UK has incurred at least £650 million in penalties from the Commission as a result of weaknesses in how EU funds have been spent in the UK. Between 2005 and June 2015, Defra incurred disallowance totalling £642 million in England. For the UK as a whole disallowances equated to £2.70 for every £100 of [Common Agricultural Policy]  funds received from the Commission in this period.”

In order of seriousness, only Cyprus, Bulgaria, Portugal, Romania and Greece have worse records than the UK regarding disallowance payments in the same time period.

Remain campaigners have claimed that the PAC report highlights how much money the UK receives from the EU for farms, small businesses and universities, reports The Independent.

However, Leave campaigners cite the findings as evidence of an EU funding “racket” which sees some repatriation of the £350 million sent to Brussels every week, now burdened with strict rules and conditions which may not match UK priorities, and subject to fines if misapplied.

According to the report UK government departments themselves “created a damaging legacy” by contributing “additional complexity in the way they have chosen to implement already complex EU programmes”. In doing so the PAC found those departments responsible for “driving up error rates”.

In particular, the report found that in 2005/06 Defra voluntarily implemented “the most complex system available” to make CAP payments. This was found to have caused the UK to incur high levels of disallowance in subsequent years, despite which government departments “have exhibited a distinct lack of urgency” in addressing the issue.

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