There is something vicariously thrilling about finding out how much your neighbour’s house cost or how high the rent is. So imagine the thrill of an (admittedly long) report from the European Union’s financial watchdog on how the 27-member club could spend its annual €345m on offices in Euroland for its 36,000 staff.

The EU, which includes the Commission, the Parliament, the Council, representing member state governments, as well as the Court of Justice and various committees, occupied 2m sq metres of offices in Brussels, Luxembourg City and Strasbourg in 2005. Other agencies and offices elsewhere were outside the remit of the Court of Auditors’ June 26 survey.

It found that the EU had similar problems to the rest of us with Belgian landlords, often being overcharged, saddled with maintenance costs and locked into long leases. However, it also said a lot of the tens of millions of euros of losses could be avoided.

A preference for renting over buying, poor forecasting of need and a decision to cluster offices together added to costs, it said. Also, the institutions rarely used open tendering but rather closed negotiations that did not always get the best price.

More than 80 per cent of its Brussels space is in the uninspiring European Quarter of Brussels, inflating rents there, though it is diversifying. More than is 70 per cent in Luxembourg is on the even less inspiring, windswept Kirchberg plateau.

There are some gems in the lengthy report. The Commission paid €6m in rent for an empty building after the enlargement from 15 to 25 in 2005 for a year because it could not recruit the translators to fill it. Parliament vacated what is now the Jacques Delors building on Rue Belliard in Brussels in 1998 and handed it over to the Economic and Social Committee and Committee of the Regions. They had to pay out €6m a year for six years before finally refurbishing and moving it. Then there is the parliament’s €143m buy of three buildings in Strasbourg. No account was taken in the purchase price of the decades of rent paid, which had been inflated by the Strasbourg authorities. Parliament is awash with money but now seems to have bought every building it can so will have to find new things to spend on.

The auditors said different EU arms should co-operate more. One deal-sharing scheme fell through because two institutions had different standards. They also said that a bar on the EU borrowing money for mortgages meant if had to rely on more expensive finance from developers.

The auditors say they did not come across any evidence of corruption, though they were not looking for it. Nevertheless, Olaf, the anti-fraud agency, is examining cases involving the Office of Infrastructure that runs building policy, the awarding of cleaning contracts and the provision of offices overseas. There may be more buried among what looks like waste.

June 27th, 2007 in Brussels | Permalink