Vol. 477 No. 1
37 Mr. E. O'Keeffe asked the Minister for Agriculture, Food and Forestry if he has undertaken that the funds for Feoga payments of approximately £1.4 billion per annum, which pass through his Department pending recoupment from Brussels and which leads to an annual borrowing requirement of £270 million, should be managed by the National Treasury Management Agency. [3470/97]
In April 1996, the Comptroller and Auditor General published a Value for Money Report on the borrowing activities of the Department of Agriculture, Food and Forestry for FEOGA purposes. While the report concluded that the borrowing and associated risks were managed quite well by the Department, it did recommend, inter alia, that consideration be given to the involvement of the National Treasury Management Agency — NTMA — to a much greater extent in the management of the borrowings involved.
Since then, following discussions with my colleague, the Minister for Finance, our officials have examined the feasibility of transferring the treasury management functions of FEOGA to the NTMA. A critical factor in considering such a change is its impact on the various budgetary aggregates, particularly on the Maastricht measure of general Government debt. Clarification was sought by the Department of Finance from the EU Commission last year on the relevant accounting conventions. The clarification sought, which was received very recently, established that the bulk of FEOGA borrowings should be classified as part of the general Government debt irrespective of the management arrangements. This has removed an important constraint on the transfer of FEOGA borrowing to NTMA.
In the light of the clarification received, proposals which would enable the treasury management functions of FEOGA to be transferred to the NTMA are currently being formulated.
