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, 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

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. 

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. 

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

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 incomeAverage 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 support15191452
Farmers with income from operations with income support 201424261436
Breakdown of income support across income brackets 201437301221
Farmers with income from operations with income support. System since 201923271436
Breakdown of income support across income brackets since 201934291224
Source table as .csv (564 bytes)

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. 

The Court of Audit is currently auditing the added value of EU funds. We expect to publish the audit report in September 2022.