Bold Dutch initiative on defence spending accountability

June 10, 2014 11:26 am

The Dutch National Audit Office, the Algemene Rekenkamer, has taken a rather unprecedented step today. They’ve been concerned about the lack of transparency around NATO’s budget, which they say hampers accountability of the taxpayer-funded organisation. Rather than write some concerned letters, they’ve set up an English website that sets out an overview of what is known and what isn’t known about how NATO spends the money the member states give it and calls for much more transparency.

Given the pressure on public finances, it’s a bold and timely move by the Dutch Rekenkamer. But it throws up an interesting conundrum: accounting for international contributions. The EU regularly gets flak for inaccuracies in its budget. While the European Court of Auditors has signed off the EU budget every year since 2007, there is a 3-5% error rate normally in how the money was spent. That’s mainly down to the member states, who spend 80% of the budget – mainly on decentralised programmes like agriculture and regional funding. But there’s a lot of media attention for this and often newspapers will say the budget wasn’t signed off due to the errors.

Similarly for international development. The perception is that it is difficult to account for how aid was spent, given the distances and layers of government, agencies and NGOs involved in spending the aid. People say a great deal ends up in the pockets of corrupt government officials. That’s why the Coalition Government reviewed bilateral and multilateral aid when it came into office. This review was intended to ensure money was effectively and accountably spent, which it by and large is.

One area where we don’t actually have much debate about is the collective defence spending through organisations like NATO. The UK contributes more than £200m annually and troop deployment on NATO missions come on top of that. That’s maybe not as much as the net contribution to the EU (£12bn) or overseas aid (around £10bn) but it is, nonetheless, a significant amount of money. More importantly, given the stakes involved, especially with continuing tension in Ukraine, given the fact that we don’t really know how NATO spends its budget of more than a billion pounds on our collective defence is worrying.

Of course, some information will be classified and rightly so. But as the Algemene Rekenkamer points out, NATO does not always disclose spending information when it’s not classified. We can’t, therefore, see whether the money is spent well. Is it value for money? Maybe it is, maybe it isn’t. We’ve seen in the UK that it’s important to scrutinise the money spent on defence, to make sure we are safe and the military can perform at its peak capacity. It’s therefore only right that we get a fair chance to assess and verify NATO’s spending independently. After all, we expect that scrutiny of other international organisations and there is no reason why NATO should be a special case.

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