Mr. Kevin Cardiff:

There are diminishing returns and the control system is very expensive. Within the existing control system, the auditors who do the work find errors which ought to have been noticed by the national authorities when they were making their inspections. There is considerable room for improvement simply by means of a greater amount of attentiveness at member state level. I do not wish to oversimplify matters because it is not as easy as that. The auditors who do the work find opportunities that were missed in the context of keeping the rate down. We say that the error is material if it reaches 2%. As already stated, 2% is not an acceptability threshold. Rather, it is a materiality threshold - it is big enough to be of importance and to be noted. There is a mix of issues to be considered. There is a possibility that member states could - in some cases, they should - improve their systems and their levels of attentiveness.

Sometimes we say we need more control, but we also say we need more simplicity in the systems, because some of the errors arise from complexity. They do not all arise from breaches of EU rules. Some arise from breaches of national rules, because the EU rule is that one must also comply with national environmental standards, for example, so one might be meeting the EU regulation but not meeting the national standard and still be in error. A combination of looking at the simplicity of the schemes, improving the governance at the national level and greater attentiveness could drive it down somewhat. Whether it could be reduced to 2%, I do not know, but it could certainly be reduced.