BFOR meeting - Sofia 15&16 June 2016#EUBudget4Results

Outline

1. Focus on performance

2. EU budget performance framework: MFF, PBB and political decision-making

3. 'EU Budget Focused on Results' overview

4. Progress and next steps

5. Conclusions and outlook

1. Focus on performance is unavoidable

Increased focus on performance is unavoidable in a context of growing needs and budgetary discipline

Limits

‒ It should not lead to automatic allocations‒ It cannot replace political decision-making‒ Time inconsistency issues: political vs.

investment, evaluation vs. budgetary cycles‒ Risk of "totemisation" of indicators‒ Proportionality and Cost-effectiveness‒ One size does not fit all

Performance budgeting is the process that links funds allocated to measurable results (OECD)

Realistic expectations are key to success: the process of improving the PBB framework is gradual and every step forward counts

Benefits

‒ Better informed budget allocation decisions

‒ Stronger administrative efficiency‒ Stronger public accountability

"PBB is a tool which aims to improve the efficiency and effectiveness of public expenditure by linking the funding of

public sector organizations to the results they deliver, making systematic use of

performance information" (Dr Marc Robinson)

"You have to be careful in setting targets, to not set more than you could monitor and manage, to not set targets

for things which you have very little control over, and to very clearly

distinguish between the objectives and targets"

(Dr Marc Robinson)

2. Elements of the Performance Framework of the EU budget

➢ Treaty + EU legislation

➢ 2014-2020 Multiannual Financial Framework (i.e. performance-based budgeting tools embedded into the legal basis of the programmes)

➢ Annual budgetary process: informed political choices (i.e. programme statements)

➢ Managerial performance framework inside the Commission (i.e. Strategic Planning and Programming cycle)

➢ Ex-ante and retrospective evaluations of programmes (i.e. impact assessments, mid-term and ex-post evaluations)

➢ Regular reporting, transparency and accountability (i.e. report on the management and performance of the EU budget)

EU performance framework is conceptually in line with international standards: the PBB in place is complementary to compliance audit and the political negotiation

process.

A performance framework based on complementarity and mainstreaming

Complementarity: Several programmes contribute to one policy

Mainstreaming: Policies are implemented via several programmes:- Climate action - Biodiversity- Gender equality

R&D

Leverage effects: EU Budget is a strong driving force

• Investment tool • Integration mechanism• Cohesion driving force • Mobilising financing at national

and private level

• European Fund for Strategic Investment (EFSI) allowed already financing of projects with a total value of investment of EUR 100 billion

The EU budget has a leverage effect on the European economy

4. BFOR: progress and next steps

Progress in 2015:▪ Development of conceptual framework

for the implementation of the BFOR initiative within the new MFF

▪ Establishment of internal governance: Political leadership and technical workstreams

▪ Draft Budget 2016: Reinforced programme statements

▪ Upgrading the Commission's SPP cycle

▪ Public outreach:- BFOR national events

- Conference BFOR, 22 September 2015

- EU Results web app (750 projects)

Milestones for 2016:▪ Expert group on PBB ▪ Draft Budget 2017: Reinforcement of

programme statements ▪ 2015 Annual Management and

Performance Report for the EU Budget

▪ Framework for cooperation with the OECD

▪ Communication on Mid-Term Review of the MFF and BFOR

▪ Revision of the Financial Regulation▪ Public outreach:

- BFOR national events

- Conference BFOR, 27 September 2016- EU Results web app (1500 projects)There is strong political momentum to progress in the implementation of the PBB

framework embedded in the current MFF.

Legality and Regularity The estimated amount at risk at payment

✓ dependent on the mix between pre-financing, interim payments, final payments and related cleared pre-financing under the previous programming period (2015 payments contain proportionally a high volume of pre-financing for current programmes).

✓ has decreased by some 10 % compared with the situation in 2014. This is notably due to the reduction in the amount at risk reported in agriculture.

The estimated amount at risk at closure

✓ below the 2% materiality threshold

Estimated

amount at risk

as to the

relevant

expenditure of

the year

Estimated

future

corrections

Estimated

amount at

risk

at closure

- =

Outlook at closure regarding 2015 expenditure

EU budget is adequately protected

5. Conclusions❑ Increased focus on performance is

unavoidable in a context of growing needs and budgetary discipline

❑ Realistic expectations are key to success: The process of improving the PBB framework is a gradual one where every step forward counts

❑ The EU performance framework is aligned with international standards

❑ The performance of the EU budget must consider the multiplicity of objectives as well as the complementarity and mainstreaming of policies and programmes

❑ EU budget is adequately protected- key role of Member States in this area

❑ There is strong political momentum to progress in the implementation of the PBB framework embedded in the current MFF

“I want to make sure that every action we take delivers maximum performance and value added”

Jean Paul Juncker

EU Results

EU Budget • EU Budget: http://ec.europa.eu/budget/index_en.cfm

• EU Results: http://ec.europa.eu/budget/euprojects/

• Budget Focused on Results initiative: http://ec.europa.eu/budget/budget4results/index_en.cfm

• EU annual budget life-cycle: http://ec.europa.eu/budget/annual/index_en.cfm

• EU Budget in my country: http://ec.europa.eu/budget/mycountry/index_en.cfm

• Public consultation on the revision of the Financial Regulation applicable to the general budget of the Union: http://ec.europa.eu/budget/consultations/index_en.cfm

#EUBudget4Results