EU blunders and waste on the rise as Brussels demands bigger budget

THE pressure on David Cameron to negotiate a reduction in the European Union budget dramatically increased yesterday as auditors revealed that mistakes in spending are increasing.

The report means auditors have not cleared the European Commission’s books for 18 years, at a time when it wants an increase in its budget from EU member states.

And it comes less than a week after the Prime Minister suffered a humiliating defeat in the Commons, when Labour and Conservative rebels called for a decrease in the next EU budget, which is due to be negotiated in the coming months.

Last night, Mr Cameron and the coalition government again came under criticism from back-bench Tory eurosceptics, who used bills on European banking union and Croatian accession to push for the government to grab powers back from the EU.

In their report, auditors warned there are still too many errors in the way billions of pounds a year are being spent, with failures to detect and correct the mistakes. There was an estimated “error rate” of 3.9 per cent in payments from the 2011 budget of nearly €130 billion (£104bn), according to the report from the European Court of Auditors.

That compares with 3.7 per cent last year, prompting the Court’s president, Vitor Caldeira, to warn: “Member states must agree on better rules for how EU money is spent, and member states and the EC must enforce them properly.”

It comes in the run-up to an EU summit clash over calls from Eurocrats and MEPs for inflation-busting rises in EU spending. Mr Cameron is threatening to veto anything but a freeze, which many in his party believe is not going far enough.

Former EU chief accountant and UK Independence Party MEP Marta Andreasen said it was the 18th year in a row that the auditors had not given the EU budget “a clean bill of health”, adding: “Worse still, the ‘error rate’ – shorthand for unaccounted money – is on the rise. If this report, outlining as it does the continued gross mismanagement of EU funds, doesn’t set alarm bells ringing in Downing Street, then nothing will.”

The report said the EC and EU governments “must manage spending better”, but the commission responded that it was up to national and local authorities, who are responsible for disbursing about 80 per cent of the EU budget in regional, social and agriculture grants every year, to get their books straight.

The audit report said that, across the range of policies funded from the EU budget, financial management systems to ensure correct spending were “only partially effective” and “many instances of control failure were identified”.

Conservative MEP Martin Callanan, leader of the European Conservatives and Reformists Group in the European Parliament, said: “The EU needs to start taking this annual charade seriously.

“Much of the blame for these spending errors lies with national governments. However, the European Commission is ultimately responsible for all EU monies spent and it falls to them to take responsibility for this report.