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eu - lower and lower

WORKERS, JANUARY 2004 ISSUE

All British Government departments will be ordered by the EU to consider using 'reverse auctions' on all projects worth more than 100,000. In these internet auctions tenderers are pitted against each other on the internet to encourage them to cut prices until all but one of them can go no lower. The Office of Government Commerce (OGC) believes up to 25% can be cut from current prices by this method.

The construction industry has argued that the provision of complex services is not suitable for e-auctions and the automatic acceptance of the lowest bid would lead to low quality and lack of safety. The Construction Industry Council (CIC) has produced much evidence to demonstrate that apparently 'cheap' contracts have turned out to be poor value. The Standing Committee on Structural Safety (SCOSS) has made specific recom-mendations against the use of e-auctions in its recently published 14th Report.

Until recently, government departments dealing with construction ran a campaign together with the construction industry to develop modern contracts, which emphasise good value, good design, sustainability and whole life costs. Then the EU Consolidated Public Procurement Directive arrived and the British government must make it law by 2005. Brussels is keen on e-auctions because internet auctions are apparently less open to corruption. So the UK must sacrifice quality and safety because the EU cannot deal with corruption.

· The European Court of Auditors has 'qualified' the accounts on all but 10% of the EU's 100 billion euro budget for the ninth year running. Auditors point to "significant errors in terms of legality and regularity" -- in other words, fraud.

Head European Commissioner Romano Prodi has promised yet another action plan and a public prosecutor to fight fraud across the EU. All this follows the scandal at Eurostat, the EU's statistical bureau, where an auditors' report into secret slush funds kept by Eurostat directors reported that missing or destroyed records made it impossible to track what had happened to 3 million of taxpayers' money.

The Court of Auditors found that EU accounts are impossible to audit due to so many inconsistencies and omissions. Many accounts are retrospectively doctored and whistleblowers are harassed.

The worst malpractice is to be found in the infamous Common Agricultural Policy. Half the EU's budget, payments to farmers, are "materially affected by error", with farmers claiming for more land than is cultivated, overdeclaring livestock numbers and illegally reimporting produce after pocketing exporting subsidies. Last year the Commission cynically wrote off 1.1 billion euros as "irrecoverable debt" even though it had "no knowledge of the detail of the transactions in question".

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