UK could face £1bn EU fines

A SERIES of catastrophic failures has left Britain facing up to £1bn in fines related to its handling of the European Union agricultural scheme, in which EU funds are given to member states to support their farming industries.

The National Audit Office (NAO), which signs off on financial statements compiled by the finance ministry, said yesterday the scale of the fines meant it could not sign off on the finance ministry’s statement on the use of EU funds.

The Treasury’s statement on the use of EU funds in the 2008-2009 financial year highlights £398m of confirmed “corrections” – a fine the EU imposes by withholding money – giving reduced funds to Britain in future -- and a provision for further possible corrections of £601m.

The fines “represent huge past costs and potential future costs to the taxpayer of implementing EU schemes in the UK,” Amyas Morse, the auditor general, said in an unusually blunt assessment. Official statements from the Treasury and other Whitehall departments from that period cannot yet be seen as “a true and fair report of the use of EU funds in the UK,” he said.

The blame for the waste of money is largely being laid at the door of the Department for Environment, Food and Rural Affairs which oversees EU subsidies.