What are the benefits of EU grants for the Netherlands?
European resources must be spent in compliance with the rules. But even if they are, this does not mean that the money has been put to good use. Our audits show that EU grants are a significant incentive to carry out projects but, although it is possible to see what EU grants have been spent on, their ultimate impact often remains unclear.
EU grants are used to finance a wide range of projects. We believe that the money invested in these projects must be used effectively (i.e. the intended effect must be achieved). The money must also be used efficiently (i.e. as economically as possible). European citizens should be able to see that this is indeed the case.
No clear picture of the effects of EU funding but EU grants are definite incentives
Audits carried out by ourselves and the European Court of Auditors show that we generally do not have a clear picture of the effectiveness and efficiency of the spending of European grants. Our EU trend report published in January 2016 underlines the importance of providing information on the results.
The European Commission has an extensive database containing data on EU funding under shared management.
This confirms that limited information is available on the results ultimately achieved with the money in question. For instance, although it shows that a bridge has been built with EU grants, no information is given on whether the bridge is actually used or how it has boosted the economic development of the local region.
In 2021 the European Court of Auditors (ECA) published its annual report in two separate parts for the second time. In addition to a report on the reliability of the financial statements and the legality and regularity of the underlying transactions (see the relevant web page of the Netherlands Court of Audit), a separate report (November 2021) considers the outputs delivered by the programmes funded by the EU. The ECA bases this report on the output data provided by the Commission. It found that improvement had been made but the information on the results achieved could be substantially better.
The latest ECA annual report on the performance of the EU budget, regarding the 2021 financial year, took a slightly different approach, namely how the Commission finances and monitors horizontal policy priorities, such as climate change, digitalisation and biodiversity, but its conclusion was unchanged: the available information is inadequate.
A broad-based 2022 investigation by the Netherlands Court of Audit on the added value of EU grants in the Netherlands concluded that EU grants in the Netherlands were significant incentives. Their impact may be different in other member states, of course, but EU grants in the Netherlands enable projects to be set up and/or carried out earlier and to higher quality. This was the conclusion of a survey of about 1,300 grant recipients and about 500 rejected grant applicants. However, this audit, too, concluded that insight into project results was limited owing to the poor quality of impact indicators and the fact that midterm evaluations were carried out too early to draw any conclusions on results and final evaluations too late to adapt project implementation. ESF grants were a favourable exception in that more insight was available into their results. Another important conclusion from the audit was that better substantiation of the allocation of EU grants to programme components in the Netherlands would generate more added value.
Plans to focus EU funding more on results
The European Commission has long sought to sharpen the focus of EU funding toward results. In 2015, the Juncker Commission launched an initiative called the ‘Budget Focused on Results’.
The Von der Leyen Commission is expected to include new provisions in line with the EU’s Multiannual Financial Framework for 2021-2027 to ensure that EU funding focuses more clearly on results.
- See the 2019 Commission.
- And the new proposals of 28 May 2020
- Communication from the Commission to the European Parliament and the Council on the performance framework for the EU budget under the 2021-2027 MFF – COM(2021) 366
On 17 December 2020 the European Council, consisting of the member states’ heads of state and government, agreed to a new MFF for 2021-2027.
Effectiveness of agricultural grants
There is only limited evidence of the effectiveness of European grants in the Netherlands (and the EU as a whole), in part due to the absence of adequate source information. In 2019, we performed an audit of income support for farmers (chapter 5 of the Report on the National Declaration), with the help of data from Statistics Netherlands and the Netherlands Enterprise Agency. The Netherlands received around € 5 billion from this fund between 2014 and 2020. This accounts for approximately two-thirds of total EU receipts in the Netherlands. We reported that there were signs that this income support worked to some extent in ensuring that farmers maintained a reasonable standard of living. Without this support, farmers’ gross operating income would be less than the statutory minimum wage in just over half of the cases we looked at. With this support, just over one third of farmers fell into this category. We also saw, however, that over one third of the EU income support went to farmers whose gross annual income was at least twice the average. The figure below, taken from our audit report, shows the proportion of farmers by income bracket with and without income support in 2014, and with income support based on acreage (based on the modified system launched in 2019).
With income support, 36% of farmers had a gross income that was lower than the statutory minimum wage
|More than or equal to twice the average income||Average income to twice the average income (€66,000)||Minimum wage to average income (€33,000)||Less than the minimum wage (€19,253)|
|Farmers with income from operations without income support||15||19||14||52|
|Farmers with income from operations with income support 2014||24||26||14||36|
|Breakdown of income support across income brackets 2014||37||30||12||21|
|Farmers with income from operations with income support. System since 2019||23||27||14||36|
|Breakdown of income support across income brackets since 2019||34||29||12||24|
We also audited a number of smaller-scale projects in 2015. These revealed that, in as far as we were able to draw any conclusions, that effectiveness of these projects varied considerably.