Annexes to COM(2021)366 - Performance framework for the EU budget under the 2021-2027 MFF - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2021)366 - Performance framework for the EU budget under the 2021-2027 MFF. |
|---|---|
| document | COM(2021)366 |
| date | June 8, 2021 |
Box 3 – Main annual reports on the performance of the EU budget
These reports draw on information contained in the detailed Programme Statements accompanying the draft budget each year. The Programme Statements present comprehensive data that include and go beyond the reporting required in the legal acts and provide valuable information to support budgetary decision-making.
The added value of these reports is not only to present data, but also to analyse what these data tell us, making use of all available information. In recent years, the Commission has included a dedicated performance assessment section in both the Programme Performance Overview and Programme Statements, providing essential context and a balanced assessment of what the available information reveals about programme performance and implementation.
These assessments can only be as reliable as the data that underpin them, which is why the Commission puts strong emphasis on data quality and reliability. Here, the Commission relies crucially on information provided by Member States and other implementing partners or organisations. Their cooperation will be essential to further progress.
The Commission is also working to improve data quality management and to mitigate risks by developing a robust data quality control framework and upgrading its systems for storing and sharing performance data both within the Commission and with external stakeholders. Here, the Commission can draw on a number of existing platforms and projects (see Box 4 ).
All this work will be essential to further improve the information offered and its presentation and accessibility on the Commission’s website to everyone interested 5 .
Box 4 – Example of performance data sharing: Cohesion Open Data Platform
The Commission already provides high-quality information on the implementation of the EU budget through a number of outlets. An important example is the main website for the cohesion policy funds, the Cohesion Open Data Platform . This provides comprehensive data and user-friendly visualisations on investment financing and achievements under the European Structural and Investment Funds 2014-2020, and there are plans to extend coverage to the 2021-2027 programmes. The platform received the first-ever Ombudsman award for excellence in open public administration.
Using the EU budget to drive crosscutting policy objectives
The EU budget is more than the sum of its parts. Every spending programme has its own set of objectives and tools, designed to tackle a particular set of challenges. The dedicated programme EU4Health, newly created to address specific challenges related to health, is a case in point. However, the EU budget is at its most powerful when programmes work together to unlock synergies and promote, in a coherent way, the EU’s overarching political priorities.
The EU’s objective to become climate neutral by 2050, for example, will require the use of all available means, legislative as well as financial, cutting across many different policy areas and programmes. The EU budget remains relatively small compared to the overall investment needs, but by mobilising all relevant programmes and acting as a catalyst for other public and private sector investment, it can help achieve the EU’s ambitions. Similarly, by emphasising in its annual reporting the progress achieved through EU programmes on the United Nations’ Sustainable Development Goals, the Commission underscores the EU’s commitment to playing a key role globally in supporting their achievement.
The new performance framework will progressively integrate crosscutting policy objectives into the design and implementation of the EU budget. For each of its spending programmes, therefore, the EU will address objectives specific to the programme alongside these crosscutting policy objectives. This is policy mainstreaming: including crosscutting policy goals in all phases of the policy cycle of the relevant programmes – design, preparation, implementation and evaluation. Box 5 covers the main themes of policy mainstreaming for the 2021-2027 period as agreed in the inter-institutional agreement.
Box 5 – EU commitments on crosscutting policies
Under the inter-institutional agreement accompanying the 2021-2027 MFF, the European Parliament, the Council and the Commission have committed to a number of important steps towards integrating crosscutting objectives into the EU budget.
A key commitment is to spend at least 30% of all resources available under the 2021-2027 MFF and NextGenerationEU on addressing the climate challenge, up from 20% in the previous period. In total, this amounts to a historic investment package of more than EUR 600 billion. This ambitious commitment is essential to drive the EU’s climate efforts and leverage other sources of financing.
In addition, the institutions have taken important commitments in relation to:
Biodiversity: an ambition to support biodiversity objectives with 7.5% of annual spending in 2024 and 10% in 2026 and 2027, on the basis of an effective, transparent and comprehensive methodology;
Gender equality: the development of a new methodology to measure the expenditure in programmes on equality between women and men and the mainstreaming of those objectives for pilot use as of 2023;
Sustainable Development Goals: annual reporting on the implementation of the United Nations Sustainable Development Goals in all relevant programmes.
Effective and credible policy mainstreaming requires a robust system to measure the contributions made by different EU spending programmes to a given overarching policy priority: this is known as tracking. Tracking requires a detailed understanding of how specific actions contribute to a given policy priority; these actions need to be identified in a way that allows the related financial resources to be counted, or tracked, and then aggregated at the level of the entire EU budget to monitor progress.
The Commission has implemented tracking methodologies for climate and biodiversity under the 2014-2020 MFF. These methodologies were based mainly on the intent of the financed action – i.e. whether the actions were designed to help achieve the overarching objective or were only expected to make a significantly positive contribution. The Commission is now further developing its tracking methodologies to take into account not just intent but also expected effects of the actions, which is what will ultimately make the difference (see Box 6 ).
Box 6 - From OECD Rio markers to EU coefficients
The OECD Rio marker system assigns a marker to each project depending on whether that project is financed because of climate considerations – principal relevance / 100% – whether it is financed for other reasons but makes a significant, positive contribution – significant relevance / 40% – or not – no relevance / 0%. That system is simple to use with low administrative cost, given that projects are categorised based on why they are financed without requiring a deeper understanding of their effects.
Given the risk that the same action would be categorised differently depending on why it was financed 6 , the Commission started moving already in the 2014-2020 MFF towards a system of classification by type of action. For the 2021 – 2027 MFF, the European Commission is further developing that tracking system to use EU climate coefficients. These retain the three-tier system from the OECD Rio markers but further reinforce a classification of types of action by their expected effects on climate that is consistent across the EU budget.
An important first step was taken in the climate tracking methodology for the new Recovery and Resilience Facility where substantive conditions have been included in the categories to reflect considerations of effect to the extent possible. The Commission is working on extending this system across the EU budget, reflecting new policy developments, in particular the European Green Deal and the new “Taxonomy of Sustainable Finance” 7 .
Reaching the overall target for climate spending or the ambition level set for biodiversity will require all contributing programmes to do their part. This means that the overall target must be translated into objectives and targets at the level of individual spending programmes. Where spending programmes are implemented jointly by the Commission and the Member States, national and regional authorities need to work together with the Commission to assign relevant targets to the respective programmes at national and regional level.
For multiannual spending targets, such as for climate, there also need to be appropriate adjustment mechanisms to ensure that any shortfalls in earlier years can be made up through changes in programming in later years. Here, all institutions – the European Parliament, the Council and the Commission – need to work closely with all budget implementation partners, particularly the Member States, to ensure that the EU can live up to the targets.
Next to the green transition, the digital transition is critically important, as also highlighted by the COVID-19 crisis. At least 20% of expenditure under the Recovery and Resilience Facility will support investments and reforms in the field of digital transformation. Also through the MFF, many programmes such as Horizon Europe, the structural funds, and InvestEU will include significant funding for the digital transition. The Commission is committed to further integrating the digital dimension into the performance framework.
Of course, tracking expenditure is only the start. What ultimately counts is whether this expenditure is effective at achieving policy goals, be they fighting climate change, advancing the digital transformation, or promoting gender equality. Here, the effects of various different programmes need to be assembled and aggregated. The Commission is developing suitable methodologies for this purpose. This work will provide crucial information about how to identify and harness synergies in the budget and integrate horizontal priorities most effectively in future budgetary cycles.
Using performance information for decision-making and policy design
A modern performance framework will generate high-quality performance information, providing a clearer picture than ever before of what the EU budget is achieving. It will deepen the understanding of what is working well and where improvements might be needed depending on early warning signals of potential challenges in the performance of individual programmes and in the contribution to crosscutting policies. In other words, it will provide a powerful management tool, allowing the Commission to better diagnose problems and take the necessary corrective steps, where required, in a timely manner.
Performance information can also help to inform decision-making on the budget. The EU budget is by design an investment budget, in which predictability of financing streams over time is crucial. This also means that the performance of funding programmes can only be measured and understood comprehensively over the medium to long term. Nonetheless, annual monitoring further increases the capacity of the Commission and of the budgetary authority to react flexibly and quickly to unforeseen urgencies and evolving priorities, and to assess and justify shorter-term changes in how resources are allocated.
In the longer run, comprehensive performance information will play a vital role in the design of future programmes. Evaluations will assess how well programmes have achieved their objectives, how relevant they are in adding value to EU citizens’ lives, and how coherent they have been with the broader policy objectives. They will provide a comprehensive analysis of results and impacts, allowing lessons to be drawn on the strengths and weaknesses of the programmes. This will provide important insights for the design of future spending programmes.
Implementing a harmonised performance framework will mean that this analysis is not limited to individual programmes. Rather, the Commission’s ambition is to integrate performance information from across the EU budget to build a comprehensive overview of its performance as a whole. The Commission will work towards integrating this overview with a better understanding of the interaction and synergies between spending programmes, of the pros and cons of different modes and tools of budgetary implementation, and of how EU programmes can contribute most effectively to crosscutting policy goals.
Conclusion
The EU budget is evolving in a rapidly changing world. The largest package ever financed through the EU budget will help the EU to recover from the immediate economic and social damage done by the coronavirus pandemic, kick‑start the recovery and prepare for a better future.
It is a unique opportunity to ensure that this historic package delivers results on the ground. This is the essence and core of a modern performance framework for a modern EU budget. Success will require the shared commitment of all involved in designing and implementing the budget: the EU institutions, but also the Member States, as well as all other European and international partners involved in budget implementation.
We have already made significant progress in strengthening the performance framework for the EU budget, and the new spending programmes mark a watershed in its development. Now, it is time to take this ambition forward together. European Parliament, Council and Commission should use the available information to make better budgetary decisions. Member States and the Commission should jointly translate crosscutting spending targets into operational targets in individual programmes. Member States and the Commission should work together on data quality and timeliness. The EU should communicate clearly and proudly what its policies and programmes are delivering for all Europeans. It should remain transparent about challenges faced, and be ready to take appropriate action where required.
All this work, ultimately, is undertaken for the benefit of our citizens. We must be able to demonstrate not only that the EU budget is managed responsibly, but that it is delivering for all. This is why the new EU budget has been designed with performance at its core. It is now time to put this new budget – and this new performance framework – into action. To show that the EU provides value for money and is worthy of citizens’ trust.
(1) https://www.oecd.org/gov/budgeting/budgeting-and-performance-in-the-eu-oecd-review.pdf
(2) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Better regulation: Joining forces to make better laws
(3) Article 247 of the Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union
(4) European Court of Auditors: Report on the performance of the EU budget – Status at the end of 2019, adopted on 19 November 2020, section 1.40: Most recently, the PPO, which contains a selection of indicators from the programme statements, has become an annex to the AMPR. This has made EU budget performance reporting more coherent.
(5) https://ec.europa.eu/info/strategy/eu-budget/performance-and-reporting/programmes-performance_en
(6) A building renovation project, for example, would be classified differently if done to address energy efficiency concerns or to increase living surface, even if the effect on energy consumption was the same.
(7) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment; EU taxonomy Climate Delegated Act