The UK has incurred at least £650 million of penalties through poor implementation of European Union funds for farmers and only seems to have woken up to this problem recently, according to a new report.
Between 2005 and June 2015 the UK incurred the sixth-highest level of penalties relating to the Common Agricultural Policy in the EU as a proportion of funding received by the European Commission. Penalties were equivalent to £2.70 for every £100 received.
This compared with 90p for Lithuania, 20p for Ireland and just 10p for Estonia, Germany, Latvia and Austria.
In its evidence to the Public Accounts Committee the European Commission had said its funding programmes could be complex, "but UK departments sometimes add their own layer of complexity", the report said.
The report also claimed despite the ongoing cost to the taxpayer, Defra has only recently developed a joint strategy with the Treasury for reducing the penalties.
The Public Accounts Committee said: "By the end of 2016 we expect departments to have spelt out what actions they will take to reduce penalties. If necessary, a task force should be established to ensure that the action needed is delivered."
The Committee concludes the Treasury "does not sufficiently hold departments to account for spending EU funds" and calls on it to publish a strategy for using EU funds in the UK, setting out standards for performance and value for money.
It finds the private sector and UK universities "have a good success rate in securing funding from EU-wide funding competitions" and urges the Treasury to lead new work to learn from this.
The Treasury should also "press the Commission to identify actions that will ensure that a budget focused on results becomes a reality", says the Committee, concluding "the current EU budget process limits the achievement of value for money".
Chair's comments
Meg Hillier MP, Chair of the PAC, said: "Government inaction on EU penalties is costing taxpayers dear. 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.
"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.
"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.
"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."
