Mr. Kevin Cardiff:

That is correct. To take an example, if the Chairman was a beneficiary and was supposed legally to receive €100 but actually received €105, that is a 5% error. However, if we take 100 people like the Chairman, we might find that 60 of them received more than they should, but none received a large overpayment, so there could be a 60% rate of finding an error, but the cost of the error, which is what we measure, is only perhaps 5%.

I will not go through the areas that are up or down a bit this year. One thing we have found this year is that we cannot say clearly what makes the big difference between areas with high error rates and areas with low error rates. Entitlement programmes, where an individual or a beneficiary is more or less entitled to a payment on the basis of relatively simple criteria, have very low error rates. However, reimbursement programmes, where a beneficiary goes off and spends according to particular criteria and then comes back and claims that money, have an error rate that is usually over 5%, which, roughly speaking, makes them twice as error prone. The Commission is actively looking at ways to simplify all the schemes, which we, of course, support. We would say it is important not to simplify it until the point where money gets passed over, regardless of whether the beneficiary is doing the things Europe wants done. Within that constraint, we very much support the efforts that are being made to simplify the systems.

The Commission will soon issue a mid-term review of the 2014-2020 multi-annual spending framework, probably at the end of 2016.

In addition to maintaining controls on the spend, it will also increase focus on the performance and on getting as much value as possible for the amount spent. This is a reasonable hope as the new Commission has made performance a focus and is working on a new performance budgeting system. Somewhat optimistically, it hopes to have results from this in 2016. However, performance budgeting and tying expenditure more closely to actual outcomes are very difficult so I would not blame the Commission if it took a few months longer than this. We have been saying this year that we need an entirely new approach to European spending, with a much greater focus the value we derived from the moneys. This is pushing an open door to an extent because the Commission, which spends all of these moneys directly or indirectly, is thinking in the same direction. The question is how fast it will be able to move and how much support and co-operation it will get from member states.

The 2014 EU accounts present a true and fair view. The estimated level of error remains persistently above the 2% materiality threshold, so it is big enough to measure and be concerned about but it has not increased in recent years. Reimbursement spending is more affected by error than simple entitlement spending. The efforts of the Commission and member states to make corrections makes a real difference but there is scope for further improvement. We know this because we keep finding cases which could have been spotted. While performance reporting will now be the subject of much more focus, it is still relatively weak.