MPs urge government to do more to cut taxpayer costs for EU penalties

Hayley Kirton
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The Euro Comes Under Increasing Pressure
Ouch: government had been hit with at least £650m in penalties over the last decade for spending EU funds improperly (Source: Getty)

A group of MPs has today criticised the government for not doing enough to shield taxpayers from fines paid to the European Commission.

The report by the Public Accounts Committee (PAC) found that government had been hit with at least £650m in penalties over the last decade for spending EU funds improperly.

"Government inaction on EU penalties is costing taxpayers dear," said Meg Hillier, chair of the PAC. "Money intended to support projects and programmes in the UK 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."

In particular, the MPs pointed out that UK government departments often added levels of complexity when implementing EU programmes, increasing the likelihood of mistakes being made and penalties being incurred.

Hillier added: "What makes this doubly frustrating is departments have hindered themselves by introducing still further complexity to already complex EU programmes. As we have seen, these poor decisions can have costly repercussions.

"The experiences of EU member states, the UK private sector and UK universities point to some simple overall conclusions: the government has much to learn and the sooner it learns it, the better."

In light of its findings, the PAC is calling on the Treasury to lead the way in helping other departments address the causes of the penalties and on every department to draw up a list of actions to take to reduce the penalties by the end of 2016.

"As a priority the Treasury and departments must identify the reasons they keep being penalised and take whatever action is necessary to rectify their mistakes," Hillier continued. "Beyond that, on behalf of taxpayers our committee will expect the announcement of a named official to take responsibility for improving performance in this area."

A Treasury spokesperson said: "We have made real progress to ensure every penny of EU funding gets to where it's needed, including by reducing agricultural penalties by almost two thirds since 2005, and leading the way in Europe to slash regulation and other administrative burdens."