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CM(2009)147 15 October 20091
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1071 Meeting, 24-26 November 2009
11 Administration and logistics


11.2 Meeting report of the Budget Committee – October 2009 session

Item to be considered by the GR-PBA at its meeting on 5 November 2009

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1. The Budget Committee met in Strasbourg on 5-9 October 2009.

2. The Committee considered the following items:

    I. Opening of the meeting

      - report of the September 2009 meeting

    II. Evolution of the budgetary context for 2010
    III. Examination of the 2010 draft budgets
    IV. Exchange of views on the legal statute of the EDQM
    V. Exchange of views with the Group of Rapporteurs on Administrative and Budgetary Questions (GR-PBA)
    VI. Any other business

I. OPENING OF THE MEETING

Report of the September 2009 meeting

3. The Committee took note of the report of the September 2009 meeting.

II. EVOLUTION OF THE BUDGETARY CONTEXT FOR 2010

4. The Director General of Administration and Logistics recalled some of the major outstanding issues in relation to the draft budgets for 2010 and informed the Committee of certain new developments:

RECEIPTS

5. In respect of the budget of receipts for 2010 the Director General indicated that there were three major factors which meant that the budget of receipts had decreased by some €5.0M in comparison with 2009:

- A decrease of €3.0M in the amount of the balance available from previous years budgets which it was proposed to include in the 2010 budget of receipts.
- A decrease of €1.7M in forecast income from the investment of cash balances due to the lower levels of interest rates.
- A decrease of €300K due to the policy decision to allocate to the EDQM a share of the interest on cash balances.

EXPENDITURE

6. The Director General highlighted (as set out in the priorities document and draft budget), that in order to cope with the loss of miscellaneous income it had been necessary to reduce significantly, through efficiency gains and other reductions in appropriations, the proposed budget of expenditure for 2010.

7. He pointed out that as a result of these reductions, even after the application of the inflation adjustment, the budget of expenditure for 2010 would increase by only 0.51% in nominal terms (after taking into account a €304 700 transfer of expenses from the Pension Reserve Fund corresponding to pension scheme administration costs).

STAFF LEVELS

8. In terms of staff levels the Director General highlighted that within the Ordinary Budget it was proposed to suppress 17 posts whilst only 2 new posts were proposed for 2010.

SALARY ADJUSTMENT

9. The Committee was informed that the recommendation of the CCR for 2010 for staff members serving in France would be 2.0%, whilst the provision within the draft budget was 1.9%.

INFORMATION OFFICES

10. The Committee also noted that there had been no final decision on the question of the financing in 2010 of a number of Information Offices, for which it was proposed in the draft budget that the financial responsibility be transferred to their host countries (€800 000).

DISCUSSIONS WITHIN THE RAPPORTEUR GROUP ON PROGRAMME, BUDGET AND ADMINISTRATION (GR-PBA)

11. The Committee was informed that certain member states had provided the GR-PBA with specific recommendations in respect of possible budget savings, as well as more general points in relation to the budget, and that these would be discussed by the GR-PBA at its meeting of the 22nd October when examining the draft budget for 2010. These proposals were distributed to the Committee.

III. EXAMINATION OF THE 2010 DRAFT BUDGETS

A/ General remarks

12. The Committee recommended that the decrease in receipts resulting from the lower interest rates should not be covered by an increase in member states' contributions.

Inflation adjustment to be applied to the budget for 2010

13. The Committee noted that the draft budget for 2010 had been prepared in accordance with the decisions of the Committee of Ministers in respect of the inflation adjustment to be applied and the total level of contributions.

14. In particular, the Committee noted that in accordance with the decision taken in 2007 by the Committee of Ministers the inflation adjustment that had been used in the preparation of the draft budget was 2.8% (average of the Eurostat monthly indices for France for the twelve months to February 2009) but that this rate was far higher than the current rate of inflation in the host country (0.8% as at the end of August 2009, again according to Eurostat).

15. The Committee noted that the recommendation of the Co-ordination Committee on Remuneration (CCR) in respect of the salary adjustment in France for 2010 was 2.0%, which was again out of step with the rate of inflation (see the preceding paragraph) and with the average trend in salaries in the host country.

16. While recognising that the draft budget had been prepared in accordance with decisions of the Committee of Ministers and established practice, the Committee considered that the current economic situation, characterised by declining GDP, high budget deficits and low inflation in most of the member states, was exceptional and that the Committee of Ministers might wish to consider reducing the level of member states' contributions.

17. If this were the case the Committee considered that a possible approach could be to apply a global adjustment of 1.5% to the expenditure budget. This proposal would result in an inflation adjustment to member states' contributions of approximately €3 257 400, as compared with the €6 080 400 currently included in the draft budget. If this proposal were to be implemented it would require reductions in the budget of expenditure of €2 823 000 with consequences for the Organisation's activities level. Nonetheless, given the prospect of low inflation rates, price rises could be expected to be lower than foreseen in the draft budget.

18. The Committee stated that, at its May 2010 meeting, it wished to examine a revised methodology for establishing the inflation adjustment.

Information Offices

19. The Committee noted that the expenditure budget for 2010 would need to be modified in order to fund those information offices for which the Secretary General had proposed that the financial responsibility be transferred to the host states but in respect of which this proposal would not be followed up. The Committee stressed that, in this case, additional financing would have to be found via either new savings or new contributions (voluntary, if not compulsory).

B/ Possible savings for the budget 2010 and future years

20. The Committee considered the following areas to identify possible savings:

B.1. Specific recommendations

Rates of daily allowances, retainers and honoraria

21. The Committee recommended that given the current economic situation these rates be maintained at the 2009 level – total saving €128 000.

    Invitations to journalists

22. The Committee recommended that the practice of reimbursing travel and subsistence expenses to journalists should be discontinued – total saving approximately €300 000 in the budget of the Directorate of Communication.

    Other transversal cuts

23. The Committee was of the opinion that transversal cuts in relation to official journeys and consultants could be considered by the Committee of Ministers.

    Investment Budget

24. The Committee considered that the grant from the Ordinary Budget to the Investment Budget could be further reduced. Proposals in this respect are set out on page 8 paragraph 71.

    B.2. General recommendations

    Staff Costs

25. Whilst the Committee noted that for 2010 within the Ordinary budget it was proposed to suppress 17 posts and create only 2, it recommended that the Committee of Ministers consider a partial freeze, in the region of 50%, on recruitments resulting from staff leaving the Organisation or from prolonged absences in the course of the year.

European Court of Human Rights

26. The Committee recommended that the operating expenditure of the Court’s budget should be examined closely, especially where there was a duplication of administrative structures which already exist within the Organisation. In particular the Committee felt that it would be appropriate to examine the expenses of the following support sectors at the Court: IT, communication, translation, human resources and finance.

Duplication of support functions

27. The Committee recommended that there should be a review of support functions across the Organisation, in particular as regards communication activities (in line with the above recommendation on the budget of the Court) in order to benefit from potential economies of scale and better qualified staff and ensure that there was no duplication of effort between major administrative entities.

Restructuring of the Organisation

28. The Committee felt that it would be appropriate for the Organisation to continue its reflection on a potential reorganisation and was awaiting the Secretary General's observations on the NAO report distributed to the national delegations.

Utilisation of previous years' credit balances

29. The Committee noted that the draft budget proposed that the credit balance from the 2008 budget be included in the budget of receipts for 2010. This amount stood at €1.9M and was some €3.0M less than that included in the budget of receipts for 2009.

30. The Committee recalled that it had always stated its opposition to the practice of including previous years' budgetary balances in the budget of receipts where the outcome was an increase in the expenditure base for subsequent years. Apart from the principle that the credit balance from previous years should be automatically returned to member states (unless the Committee of Ministers takes a decision to the contrary) the draft budget for 2010 amply illustrated the dangers of the practice.

31. In the event that the Secretary General were to make any proposals in respect of the use of any credit balance for further years these proposals should be for one-off specific projects.

    Proposals by the Co-ordinated Committee on Remuneration (CCR) on the salary adjustment

32. As detailed above, the Committee noted that the CCR recommendation would be in the region of 2.0% for France. The Committee again drew attention to the significant difference between the CCR proposal and the effective rate of inflation observed in the host country (cf. paragraph 14, page 3). In view of the current economic crisis, the Committee considered to what extent the Committee of Ministers was obliged to implement the recommendations of the CCR.

33. In this connection it pointed out that it was for the Committee of Ministers to take a decision on implementation of the affordability clause in the light of the legal opinions on this question. Should the Committee of Ministers consider that Article 8 of the "method" did not permit application of this clause, the Committee recommended that it be revised.

34. Notwithstanding any decision on the implementation of the recommendation of the CCR for 2010, the Committee stated that if felt that it was urgent that the CCR review its methodology for future years. It should be noted that the CCR was currently discussing this matter.

    Vote I General Services

    Directorate of Legal Advice and Public International Law

35. The Committee held an exchange of views with representatives of the Directorate of Legal Advice and Public International Law.

36. The Committee noted that the draft budget proposed the creation of one A2/3 post for the Directorate in 2010.

37. On the basis of the explanations received the Committee was not convinced of the necessity for an additional post in 2010.

38. If the Committee of Ministers felt that it was appropriate for the Directorate to be reinforced then the Committee recommended that a position rather than a permanent post should be created.

Directorate of Communication

39. When examining Appendix II of the draft budget – rates of retainers, honoraria and allowances for 2010, the Committee noted that the Organisation pays daily allowances to journalists invited to Strasbourg.

40. The Committee asked the Director of Communication for further details in respect of this practice and noted that in 2008 €189 000 was paid to journalists in respect of daily allowances and €155 000 in respect of travel (an amount of €300 000 had been included in the draft budget for 2010).

41. The Committee questioned the ethics of such a practice and wondered whether this really constituted an efficient use of appropriations.

42. Further, given the current overall situation in respect of the 2010 budget, the Committee recommended that the Committee of Ministers should end this practice.

43. Accordingly, as detailed above, the Committee included this item as a possible source for savings in the budget for 2010.

Vote II Programme of Activities

General Remarks

44. Whilst examining the Programme of Activities the Committee noted that for reasons linked to the structure and presentation of the Programme it was impossible to have an appreciation as to whether or not the budgetary appropriations requested for any particular programme were justified.

45. The structure of the programme appeared unduly complex (themes, objectives, programmes, actions) and this complexity was combined with the complex structure of the Organisation.

46. The Committee found that the objectives and performance indicators which were stated in the log frames within the programme of activities were usually extremely vague and very rarely quantifiable or measurable.

47. It was consequently not possible for the Committee to be able to make specific recommendations as to where economies could be made. The Committee also noted that in the absence of well defined performance indicators it was also difficult to report back to the Committee of Ministers on results actually achieved in previous years and hence to justify the 2010 appropriations.

48. The Committee urged the secretariat to review the overall presentation of the Programme of Activities so as to simplify its structure and thereby facilitate the examination and monitoring of the budget. It also asked that it ensure that objectives and Indicators followed the SMART methodology.

49. The logframes should also be completed with information on the state of progress of projects where they lasted several years.

Directorate General of Democracy and Political Affairs

50. The Committee held an exchange of views with representatives of the Directorate General of Political Affairs.

51. The Committee noted that the Secretary General had proposed that the costs for certain information offices be transferred to the host member states and that accordingly no provision for the cost of these offices (€800 000 in 2009) had been included in the draft budget for 2010 (cf. paragraph 10 page 2). If this transfer was not decided the Secretary General must propose other funding measures or savings. (cf. page 3 paragraph 19)

Directorate General of Human Rights and Legal Affairs

52. The Committee held an exchange of views with representatives of the Directorate General of Human Rights and Legal Affairs.

53. The Committee noted that the Directorate was currently in the process of preparing, at the request of the Committee of Ministers, a Council of Europe convention on violence against women and domestic violence. In this respect the Committee recommended that the Committee of Ministers, when taking any decisions in respect of the development of new legal instruments, should identify the financing implications in both the short and medium term for the activity before approving the legal instrument concerned.

54. The Committee recommended that, in general, any decision should be accompanied by an estimate of its budget implications in the short and medium term.

Office of the Commissioner for Human Rights

55. The Committee noted that whilst the overall budget of the office of the Commissioner was showing a decrease in comparison with 2009, this was due to the fact that specific appropriations granted in respect of activities in Georgia and the Russian Federation for 2009 would not be required in 2010 and that a Joint Programme for which appropriations were included in 2009 had finished.

56. The Committee noted that the Commissioner for Human Rights had proposed to the Secretary General that his office be reinforced by three additional staff members for 2010 but that the Secretary General had included only one additional post in his proposal. The Committee observed, however, that three posts and three positions remained vacant as at 30/06/09 and that if they could be filled by the year end the office would thus benefit from additional resources.

57. The Committee was therefore not convinced of the need for an additional post in 2010.

58. If the Committee of Ministers felt that it was appropriate for the Directorate to be reinforced then the Committee recommended that a position rather than a permanent post should be created.

Vote IV – European Court of Human Rights

59. The Committee held an exchange of views with the Registrar of the European Court of Human Rights on Vote IV of the draft Ordinary Budget and the question of a new programme to enhance the resources of the Court which had already been addressed at the Committee’s September 2009 meeting (CM(2009)131 paragraphs 58 to 62).

60. The Committee noted that the draft budget contained additional appropriations of €291 400 for obligatory expenses relating to staff home leave, IT licences and judges’ removal costs (€175 400); the latter expense was non-recurrent.

61. The Registrar of the Court said that certain of the Court’s proposals had not been included in the draft 2010 budget and that in particular, funding still had to be found for part of the IT investment proposed by the Court amounting to €446 000 (cf. page 173 of CM(2009)130 Volume I Appendix III).

62. To address this situation, the Registrar informed the Committee that the Court had decided to appeal for voluntary contributions to finance the upgrading and development of its databases and that certain countries had already responded favourably to this request.
With regard to the missing amount for the renewal of IT equipment, in keeping with the four-year cycle, the Registrar presented the proposals contained in document P-Bud(2009)18 for this amount to be financed by using the Court’s unspent appropriations from 2009. The Committee agreed to this proposal and recommended that the Court’s investment budget for 2009 be increased by €96 000 and to increase the 2009 grant from Vote IV to the investment account from €480 000 to €576 000.

63. The Committee also responded favourably to the proposal contained in the final paragraph of document P-Bud(2009)18, namely: “As from 2011 the grant to the Court’s investment budget will be evened out within its overall appropriations so as to avoid fluctuations from one year to another.” The Committee also recommended that in future the grant to the investment budget should appear under a specific budget sub-head, as is the case for Vote VIII of the Ordinary Budget.

64. The Committee also noted that, further to a recommendation by the GR-PBA, the Court had been asked to make budgetary savings in its appropriations (excluding case-processing appropriations) corresponding to the same percentage reduction as that found by other administrative entities, and that this request had led the Court to propose a cut of €251 600 in its appropriations for staff expenditure. The Committee was of the opinion that the Court should apply this cut to its non case processing budget and under no circumstances to its legal staff and was convinced that savings could be found in expenditure on IT, communication and translation.

65. The Committee also reiterated its proposal that economies of scale be made throughout the Organisation (cf. page 4).

Vote VI – Finance Directorate

66. The Committee held an exchange of views with the Director of the Finance Directorate and had no particular comments to make.

Vote VIII and Vote IV

Investment programme 2010 and medium term investment Plan 2010-2014

67. The Committee examined the Investment programme for 2010 and the medium term investment plan for 2010 to 2014.

68. The Committee noted that the grant to the investment budget included within Vote VIII had decreased by €150 000 in real terms before an inflation adjustment of € 130 000 had been applied, such that the overall decrease in nominal terms was €20 000. The Committee noted that in 2010 all of the grant to the investment budget could be used to finance the medium term investment plan as the internal loan for investments had been repaid in 2009, thus making available an additional €776 000.

69. The Committee recognised that investments were necessary :

- in order to ensure that costly emergency works were not required in future years to compensate for lack of proper investment
- for the renewal of installations and technical equipment, in particular in the IT field
- for the modernisation and reform of the Organisation.

70. In particular the Committee felt that priority should be given to works which were necessary in order to comply with safety or other regulations or works which would achieve an eventual return on investment (e.g. energy saving investments).

71. However, given the current economic situation, the Committee considered that the Committee of Ministers could envisage exceptionally reducing the grant to the investment budget by an amount of €250 000.

Pensions Budget

72. The Committee took note of the pensions budget and noted that it effectively indicated the contractual amounts that were necessary for the payment of pensions.
The Committee pointed out that in future the draft budget should include a summary table of trends in the Pension Reserve Fund.

Appendix II - Rates of various retainers, honoraria and allowances for 2010

73. The Committee considered that given the economic situation it would not be appropriate to increase these rates by 2.8% as proposed by the Secretary General in the draft budget.

74. The Committee noted that this recommendation would lead to savings of approximately € 128 000 (cf. paragraph 21, page 3).

75. The Committee held an exchange of views with the Executive Secretary of the European Committee for the Prevention of Torture (CPT) on the rates paid to members of that committee and experts it used. The Committee noted that whilst an annual rate of retainer was mentioned in Appendix II in respect of members of the CPT, in practice the rules governing the allocation of such retainers meant that a significant number of members of the CPT had not received any payment and the others never received the full possible amount of retainer in any one year.

IV. EXCHANGE OF VIEWS ON THE LEGAL STATUTE OF THE EDQM

76. At its September meeting the Budget Committee had noted that the EDQM had a number of countries which have observer status (23). Some of these were Council of Europe member states which could already join the EDQM and some were non member states of the Council of Europe which due to the fact that the EDQM was not an enlarged partial agreement could not presently become members.

77. The Committee noted that, as a result, observer states presently made no financial contribution to the EDQM

78. The Committee had therefore requested an exchange of views with the Legal Advice Department to ascertain what changes to the legal status could be envisaged in order to increase the membership of the EDQM and possibly reinforce its international reputation.

79. Representatives of the legal advice department pointed out that the EDQM was unique in comparison with other partial agreements as it had been created by means of a convention.

80. Whilst this meant that any change to the legal status of the EDQM might be more difficult than changing the status of other partial agreements, it would not be impossible to envisage that the necessary legal changes could be made to enable the Partial Agreement to become an enlarged partial agreement.

81. The Committee noted that if the Committee of Ministers envisaged changing the status of the EDQM a preliminary assessment of the benefits and drawbacks of such a change must be made.

V. EXCHANGE OF VIEWS WITH THE GROUP OF RAPPORTEURS ON ADMINISTRATIVE AND BUDGETARY QUESTIONS (GR-PBA)

82. The Committee held an exchange of views with the Rapporteur Group on Programme, Budget and Administrative (GR-PBA), during which the Chairperson of the Budget Committee outlined the main findings and recommendations of the Committee in respect of the Draft Budgets for 2010.

VI. ANY OTHER BUSINESS

83. The Committee suggested that, for subsequent years, a new methodology for preparing the budget, based in particular on priorities and actual expenditure relating to these priorities, should be examined as soon as possible.

84. It also requested that, when it examined the budget priorities in May, information be provided on the trends in the principal expenditure items for years N+2 and N+3.

Dates proposed for 2010 meetings

85. - from 3 to 5 May 2010
- from 13 to 16 September 2010
- from 11 to 15 October 2010.

Appendix I

BUDGET COMMITTEE

October session 2009

Monday 5 October at 9 a.m. – Friday 9 October 2009

Room 7, Palais de l’Europe

DRAFT AGENDA

Item 1 Opening of the meeting

      - report of the September 2009 meeting

      CM(2009)131: Meeting report of the Budget Committee – September 2009 session

Item 2 Evolution of the budgetary context for 2010

      CM(2009)130 Vol. 1 : Ordinary Budget - Vote I to Vote IX; Subsidiary Budgets - Services, Subsidiary Budget of the European Youth Centres, Subsidiary Budget for Publications, Extraordinary Budget, Pensions, Budget of the European Youth Foundation
      CM(2009)130 Vol. 2 : Draft Programme of Activities for 2010 (Vote II)
      CM(2009)67: Priorities for 2010 – Budgetary implications

Item 3 Examination of the 2010 draft budgets

      CM(2009)130 Vol. 1 : Ordinary Budget - Vote I to Vote IX; Subsidiary Budgets - Services, Subsidiary Budget of the European Youth Centres, Subsidiary Budget for Publications, Extraordinary Budget, Pensions, Budget of the European Youth Foundation
      CM(2009)130 Vol. 2 : Draft Programme of Activities for 2009 (Vote II)
      P-Bud(2009)15: Budgetary tables by accounting code
      CM(2009)67: Priorities for 2010 – Budgetary implications
      P-Bud(2009)16: Vote II Budgetary tables by entities

Item 4 Exchange of views on the legal statute of the EDQM

Item 5 Comparative evolution of salaries and inflation

      P-Bud(2009)17: Comparative evolution of salaries and inflation

Item 6 Exchange of views with the Group of Rapporteurs on Administrative and Budgetary Questions (GR-PBA)

Item 7 Any other business

      2010 session dates

    Title of Document

    DD(2009)492 Add: GR-PBA from 8 October 2009 – Item 1 –Draft Budgets for 2010

    GR-PBA(2008)16 : Opinion on the legal value of the CCR's recommendations concerning salary adjustments - Memorandum prepared by the Legal Advice Directorate

    Proposals on budget issues from the permanent Representation of Switzerland to the Council of Europe

    Proposals on budget issues from the permanent Representation of Denmark to the Council of Europe

    Proposals on budget issues from the permanent Representation of Czech Republic to the Council of Europe

    Proposals on budget issues from the permanent Representation of Poland to the Council of Europe

    Proposals on budget issues from the permanent Representation of France to the Council of Europe

    Court Statistics

    P-Bud(2009)17: Comparative trends of salaries and inflation

Appendix II

BUDGET COMMITTEE

October session 2009

(05-09 October 2009)

LIST OF PARTICIPANTS

STATES

MEMBERS

Austria

Mr Christoph JACKWERTH

Belgium

Ms Anne VAN NIEUWENBURG

France

Ms Marie-Chantal MUSSET (Chair)

Germany

Mr Michael LAUMANNS (Substitute)

Italy

Mr Claudio DE ROSE

Poland

    Bartosz BURACZYNSKI

Romania

Mr Stefan PETRESCU

Russian Federation

Mr Andrei KOVALENKO

Sweden

Mr Åke HJALMARSSON (Vice Chair)

Turkey

Mr Fikret DEMIR (Substitute)

United Kingdom

Ms Joycelyn BUCHAN

Note 1 This document has been classified restricted at the date of issue; it will be declassified in accordance with Resolution Res(2001)6 on access to Council of Europe documents.


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