The EU institutions manage their spending on office accommodation efficiently overall, according to a new report by the European Court of Auditors. However, most large projects suffer delays, say the auditors, which leads to additional costs. Furthermore, their financing is often unnecessarily complex and not always transparent from the budgetary point of view. The auditors make a number of recommendations for improvement.
The EU institutions spend around 11 % of their budget - yearly about €1 billion - on buildings. Around two thirds of this amount concerns acquisition and rental costs, with the remainder spent mainly on maintenance, security and energy. The European Commission has the largest buildings portfolio, with more than 80% used as office space.
The auditors examined the building strategies of the five EU institutions with most office accommodation - the Parliament, the Council, the Commission, the Court of Justice and the European Central Bank. Overall, they found that the institutions manage their spending on office accommodation efficiently, but their building strategies are not always formalised and the planning of their building requirements could be improved.
The financing mechanisms of the large construction projects analysed were often complex and, in some cases, this affected budget transparency. Most projects suffered delays and some incurred substantial additional costs. For example, the original estimated budget for the European Parliament’s KAD II project in Luxembourg was €317.5 million in 2005. It suffered significant delays, the scale of the project was reduced, and the budget was revised in 2009 to €363 million. The European Commission’s JMO II project, also in Luxembourg, suffered lengthy delays. The auditors estimate that the Commission will incur rental costs of €248 million due to the need to rent additional space.
“The EU institutions should set up adequate management procedures for large construction and renovation projects by the end of 2019,” said Jan Gregor, the Member of the European Court of Auditors responsible for the report.