Thursday, 10 April 2014

EU spending reform – a quick and simple place to start.

Cut the expenses paid to consultants on EU funded aid projects.

In February there were two major conferences in London on EU reform. One hosted by a centre right think tank and a Conservative Party group (which had speakers from parties across Europe and got lots of publicity), one by the European Commission itself to consult the public (which didn’t).

I tweeted to join in to both debates (a little late on) one simple way to start cutting wasted EU expenditure – cut the expenses paid to consultants on EU funded aid projects.

The conferences were a ‘Pan-European Conference for EU Reform’ 15 – 16 January. Its blurb stated “Open Europe and the Fresh Start Project joined forces to bring together key European reformers in an unprecedented pan-European conference calling for EU reform.”

The European Union’s own public events was a Citizens’ Dialogue event on 10 February, with Viviane Reding, European Commission Vice-President.

‘Debate on the future of Europe.’ They stated “We are looking for your practical ideas about what the EU should be doing.
What should the EU be doing to tackle the crisis?
What should your rights be as a citizen of the European Union?
What should the European Union of the future look like?”

In a recession when national governments are all making cuts, and the public feeling the pinch, the EU needs to make significant savings also. It’s only fair. A place to start saving money is cutting the very generous expenses payments that EU funded aid projects pay. Halve these per diems paid by EU to save taxpayers’ money – that would be a small but significant saving. And I believe more of the money would then go to local businesses rather than to international hotel chains.

These are rates for “EC-funded external aid contracts”.

(July 2013 figures pasted in separate post for reference – 5 pages – in case you can’t or don’t want to open the original .pdf).

Look at the per diem rates July 2013- currently the EU allowances cover nearly the cost of a night and expenses in the dearest cities in Europe (like London or Paris) for consultants in the poorest countries (just looking at Europe, like Albania or Macedonia or Moldova). The rates are €276 in the UK, €245 in France, €233 in Albania, €171 in Macedonia and €173 in Moldova. Obviously the allowances in London or Brussels or Paris are very generous and could be cut easily – it would just mean consultants having to stay in less plush accommodation and eat in less expensive restaurants. You can stay in London and Paris for a lot less and eat more cheaply. In the other countries these rates would certainly pay for nice accommodation and good bottles of the local Cobo or T’ga Za Jug, or Cricova. In less well off and countries I think this money spent in the local economy can do good for people, but at the moment it probably goes to international hotel chains and big city restaurants so only international or big businessmen benefit from the profits (plus a few local staff and suppliers). Pay half the allowances and I bet more money will actually go into the countries’ economy by being spent in smaller more local businesses and more directly benefiting local people employed there or working in the supply chain. It won’t just be EU workers and charity and other foreign consultants staying in top business hotels and (often, but of course not always) eating in the expensive international restaurants.

Plus cutting the allowances might show people in our poorer neighbours that the EU isn’t made of money and everyone from Western European projects or working on EU aid and development projects isn’t rich. The EU is not going to have pots of money to throw around to solve everyone’s problems if they join the EU – a bit to help people help themselves, but not the lavish tax free money (our money) that the European Union throws around at present.

And just a thought – if these are the rates for aid contracts (when some consultants and NGO and charity workers are presumably not in it for the money), how much do they pay for commercial work!

PS Of course I recommend the wine as a way of supporting the local economy, those (particularly the Moldovan and Albanian) and the Stonecastle from Kosovo if in those parts.


  1. I agree that the per diem rates are high and go beyond covering costs in many locations. However, I would like to make a few comments because I think it's not as simple as cutting the per diem rates to save money.
    Firstly, I have worked in and with quite a few NGOs that have applied for this type of funding and none of them (none) have actually used the maximum per diem rates in any application. They all went for realistic amounts. One of the reasons being that whatever you budget for and spend on per diems cannot be spent on other items, usually more core to the project idea and with the usually quite low budget restrictions this item simply does not have priority, and another being that per diem rates and travel costs need to have some relation to what the applicant usually covers.
    Secondly, I would like to add that if the EC would lower the maximum per diem rates, which would be fine by me and many others, the fair thing to do would be to at the same time increase the daily rates paid for work, which are exceedingly low and simply not feasible for many organisations. No, I am not speaking only about expensive consultants that want to make a profit or need to earn enough in a few days to last them a month. For many organisations the accepted daily fees do not even cover the pure costs of a day of work of their staff (salary + taxes). For many organisations and consultants the excess in per diems they sometimes do get is sort of compensation for the low reimbursement for work done.
    So yes I agree the rates are high, but I do not believe lowering them will actually save much, as many applicants do not make use of the maximum rates published. And if the whole operation would be about fairness and reality, then I believe that the maximums for other budget items such as work should be increased.

  2. Dear Suzanne, I know you've worked with environmental and social organisations across Europe so your insight of how things really work in that sector is appreciated. I have experience of EU direct paid or seconded staff in poor countries on very generous salaries, so thought these rates were evidence that private sector and charity consultants were getting the same treatment. I see it is more complex than that.


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