In 2000, the European Commission launched a far reaching administrative reform initiative, the purpose of which was to reform and overhaul its working methods, financial management systems and personnel policy. Four “pillars” of reform were established. Firstly, creating a culture of service and efficiency. Secondly, examining strategic planning and programming. Thirdly, reviewing its personnel policy. Fourthly, reforming its auditing, financial management and control policies. Five key principles governed these measures namely, independence, responsibility, accountability, efficiency and transparency.

This report, which covers the period from February 2004 to the present, responds to a specific request from the European Parliament, on the Commission’s legislative work programme 2005, and for an account of the reform process launched in 2000. In preparing this report, the Commission has taken stock of progress thus far. Additionally, it has prepared an account of future developments in the field of strategic planning, financial and human resource management and new working methods. In summary, the report makes the following findings:

Creating a culture of service and efficiency: Reform has brought significant improvements to transparency within the Commission and has led to an efficiency drive in how it responds to public requests. A “Code of good administrative behaviour” has led to a set of rules which seek to offer the public an open and transparent service. A record number of people are seeking access to Commission documents – as witnessed by a 70% increase in requests between 2003-2004. The Commission has also strived to implement improvement to European governance, through measures such as the 2002 Action Plan on Better Regulation. In September 2005, the Commission presented the results of a screening programme under which the Commission announced it was withdrawing 68 pieces of pending legislation. In other areas the Commission has simplified its working methods and procedures in order to improve and help co-ordinate its internal workings. To guarantee that resources are spent as effectively as possible, the Commission is increasingly externalising a lot of its implementation of certain programmes to executive agencies.

Strategic planning and programming: The Commission’s “Strategic Planning and Programming Cycle” (SPP) requires managers to prepare policies by setting high-level objectives, which in turn feed through into resource allocation and operation planning. This is followed by a monitoring phase as well as ex-post reporting. ABM instruments are integrated into the Commission’s working methods and used for the purpose of communicating with the other EU institutions. Further, when presenting the Commission’s work programme for 2005, the Commission President Barroso expressed his wish to work even more closely with the other institutions to deliver common objectives. This was later boosted by the Framework Agreement between the Council and the European Parliament, in which regular bi-lateral dialogue at the highest level was stressed. Commission President Barroso has also placed a new emphasis on communication, listening to the citizens and working for and with them.

- Personnel policy : New staff regulations were adopted in March 2004. These were complemented by implementing rules relating to personal liability, professional incompetence and contracts relating to contract and temporary staff. The gradual phasing out of auxiliary staff began in 2004 and in June 2005 EPSO launched a competition for contract staff to set up its data base. In 2005 the third full exercise of the new staff appraisal system was completed. Training has played a significant role in the Commission’s human resources policy, with the average number of training days per official in 2004 being 9.1. In addition, the Commission adopted the “Fourth Action Programme for Equal Opportunities for Women and Men at the Commission.”

Audit, financial management and control: The 2004 Annual Activity Reports (AAR’s) drew a globally satisfactory picture of the management and control situation. In the same year preparations were undertaken for the transition to accrual accounting by 1 January 2005. The Internal Audit Service (IAS) concluded a series of in-depth audits throughout 2004 with the result that the IAS and IAC’s now apply common minimum standards for audit reporting and in particular on the rating of audit observations/recommendations.

To conclude, the internal reforms undertaken by the Commission in 2000 amounted to a major modernisation exercise involving an overhaul of its working methods, procedures and regulations. This achievement was made possible through the efforts of its internal staff. Now that the reform process per se has been concluded, the Commission is determined to build upon its achievements and to ensure that its resources, both financial and human, are used to best effect. The Commission remains committed to delivering strategic objectives and to focusing attention on the formulation of effective policies. To achieve these ends, the Commission proposes to continue the process of consolidation and simplification of internal procedures, to enshrine a policy of continual learning, to build upon its successes in the field of accountability and transparency and lastly to enhance its management culture based on a policy of responsibility and improved external communication.

By 264 votes in favour to 201 against with 37 abstentions, the European Parliament has adopted a resolution on the Commission's legislative and work programme for 2005.

This comprehensive overview included the following points, amongst others:

- A more competitive and cohesive European Parliament : the Parliament welcomes the central importance attached to implementing the Lisbon Strategy and support attempts to target fewer and more complementary objectives. They invite the Commission to review the EU's Sustainable Development Strategy alongside the Lisbon Strategy. They also stress the importance of action at Member State and regional level as well as by the EU and call for rigorous impact assessment of all new initiatives.

Parliament calls for further action to complete the single market, notably in energy, transport, telecommunications and financial and other services. It invites the Commission to review its proposal for a software patents directive (in line with the decisions already taken by the Legal Affairs Committee and the Conference of Presidents). On financial services, Parliament support approval of measures already in the pipeline, but ask the Commission to avoid bringing forward new proposals unless they are duly justified and assessed. They applaud steps to improve the business environment, including entrepreneurship and good corporate governance, while stressing the importance of consistency in the contract law area. Parliament welcomes the high priority given to strengthening the EU's research and development effort.

MEPs state their belief that a strong competition policy and the effective enforcement of its rules are extremely important in improving competitiveness. They welcome the Commission's plans to promote competitive practices in a number of sectors, while supported the aim of ensuring less, better focussed state aid - though there should be no discrimination between the Members States on this matter.

Parliament call for the essential structure of the Stability and Growth Pact to be safeguarded in any proposed reform, in particular regarding the three per cent deficit rule, but also with more attention to be paid to the public debt position of the Member States. Cohesion policy, they assert, is important in its own right, but also as a method for achieving the Lisbon objectives. They support the Commission's efforts to persuade Member States that the Trans-European Network projects should be planned and financed on the basis of support both from the EU budget and, where possible, through public-private partnerships.

- Improving Europe's quality of life : Parliament says the effective implementation of the EU Biodiversity Plan will require appropriate financial resources, including for the Natura 2000 network. They call for the Commission and Parliament to work together to find a balanced solution on the REACH proposals. They also say it is time to update the rules on animal health and welfare in the light of new scientific developments. They call for the use of renewable and innovative energy solutions to reduce dependence on fossil fuels.

Parliament welcomes the ongoing reform of the Common Agricultural Policy, but is concerned that this should not lead to distortions of competition among farmers in the Member States, while opposing renationalisation. On the other hand, MEPs regret the lack of proposals on the Common Fisheries Policy, given the large number of outstanding issues for the fundamentally important fisheries sector.

Parliament looks forward to concrete guidelines for the manifold challenges linked to an ageing population, especially proposals to provide the highest possible quality of life for the elderly, while ensuring sustainable pensions and health systems. They call on the Commission to work with Member States to increase the labour market participation of people over the age of 55, and call for a stronger emphasis on a 'child-friendly' working environment. They repeat that a strong and vibrant social dimension is an important component of a successful and dynamic economy. Parliament also calls for adequate EU funding for education, culture, youth and media programmes, and looks forward to the Commission communication on youth policy. It also wants to see detailed proposals on how to tackle the gender pay-gap in coming years.

- A safer Europe for the citizen : Parliament stresses the need to seek an appropriate balance between increased security for citizens and proper protection for their fundamental rights. This requires a proper evaluation of measures already adopted. The fight against terrorism and organised crime is critical to building a safer Europe, and the Commission should urgently work on clearer definitions of certain cross-border crimes. Parliament welcomes the common approach to border control, asylum and immigration, including better external border security and agreements with third countries. They call for national governments to forewarn other Member States before taking significant unilateral steps in this area. They also call for the creation of a proper EU legal base for Europol.

Parliament wants the new European Centre for Disease Prevention and Control to be up and running as soon as possible, and stresses the need for early warning and immediate response mechanisms for natural disasters and health crises. It calls for intensified research into HIV/AIDS medication.

On consumer protection, the need for simplification of the rules on cross-border contracts is stressed, while opposing the merging of consumer policy and public health programmes.

- A stronger Europe in a safer world : Parliament calls for the steady and determined development of the EU's common foreign, security and defence policies to help project European values on the world stage. It wants to see rapid agreement on the setting up of the joint external action service, in a way which protects the prerogatives of both the Commission and Parliament.

A high priority on implementing a comprehensive neighbourhood policy is requested, while developing a strong new Eastern dimension and a strengthening and deepening of the Euro-Mediterranean dialogue. MEPs also ask for every possible effort to be made to achieve the reunification of Cyprus.

Parliament calls again or a strengthening of EU-US relations, including a genuine Transatlantic Partnership agreement, with commitments to remove the remaining trade barriers by 2015. MEPs oppose any lifting of the embargo on arms sales to China. They also call for clear and balanced EU input into the process of finding a lasting peace between Israel and a viable, democratic Palestinian state. They welcome the EU's positive role in the reconstruction of Iraq and in efforts to prevent Iran form acquiring military nuclear capability.

Parliament is gravely concerned that none of the eight Millennium Development Goals for sub-Saharan Africa have been met or are on track to be met by 2015. It says the international community must dramatically increase both the quality and quantity of its development assistance.

The Commission's aim to build a strong coalition for further post-Kyoto action on climate change is encouraged, while also encouraging the USA to bring forward its own proposals in this field. They also underline the importance of a multilateral approach to trade policy and a successful conclusion of the Doha Development Agenda. They stress the importance of progressively removing import barriers on goods from developing countries and progressively eliminating all forms of EU export subsidy on agricultural products.

- A Europe that works better - closer to the citizen : the House welcomes the Commission's commitment to applying an impact assessment process for all legislative measures of substance. They invite the Commission to develop a more ambitious approach for guaranteeing Member States comply with their obligations to implement EU directives. They also want a considerably more ambitious approach to the simplification of existing legislation.

Parliament stresses the paramount importance of making Europe work better and bringing it closer to the citizens, and that therefore the EU institutions should work together to help ensure the ratification of the Constitution.

Lastly, Parliament welcomes the Commission's emphasis on value for money and accountability as well as the suggestion of a roadmap aimed at securing a positive statement of assurance from the Court of Auditors. They again call for reforms to the EU Financial Regulation to remove all obstacles to proper implementation. They ask the Commission to create a secure and comprehensive internal control environment for the EU budget to address the problems arising from 'shared management' and to take a much tougher approach with decentralised paying agencies. Parliament emphasises the importance of including 'fraud-proofing' measures in all relevant legislative texts and expect the revision of the OLAF regulation to enhance that body's independent status. It urges the Commission to adopt a pro-active approach to encourage whistle-blowers to come forward, while stressing that the complete and successful implementation of the new accounting system is a priority for the year ahead.

By 264 votes in favour to 201 against with 37 abstentions, the European Parliament has adopted a resolution on the Commission's legislative and work programme for 2005.

This comprehensive overview included the following points, amongst others:

- A more competitive and cohesive European Parliament : the Parliament welcomes the central importance attached to implementing the Lisbon Strategy and support attempts to target fewer and more complementary objectives. They invite the Commission to review the EU's Sustainable Development Strategy alongside the Lisbon Strategy. They also stress the importance of action at Member State and regional level as well as by the EU and call for rigorous impact assessment of all new initiatives.

Parliament calls for further action to complete the single market, notably in energy, transport, telecommunications and financial and other services. It invites the Commission to review its proposal for a software patents directive (in line with the decisions already taken by the Legal Affairs Committee and the Conference of Presidents). On financial services, Parliament support approval of measures already in the pipeline, but ask the Commission to avoid bringing forward new proposals unless they are duly justified and assessed. They applaud steps to improve the business environment, including entrepreneurship and good corporate governance, while stressing the importance of consistency in the contract law area. Parliament welcomes the high priority given to strengthening the EU's research and development effort.

MEPs state their belief that a strong competition policy and the effective enforcement of its rules are extremely important in improving competitiveness. They welcome the Commission's plans to promote competitive practices in a number of sectors, while supported the aim of ensuring less, better focussed state aid - though there should be no discrimination between the Members States on this matter.

Parliament call for the essential structure of the Stability and Growth Pact to be safeguarded in any proposed reform, in particular regarding the three per cent deficit rule, but also with more attention to be paid to the public debt position of the Member States. Cohesion policy, they assert, is important in its own right, but also as a method for achieving the Lisbon objectives. They support the Commission's efforts to persuade Member States that the Trans-European Network projects should be planned and financed on the basis of support both from the EU budget and, where possible, through public-private partnerships.

- Improving Europe's quality of life : Parliament says the effective implementation of the EU Biodiversity Plan will require appropriate financial resources, including for the Natura 2000 network. They call for the Commission and Parliament to work together to find a balanced solution on the REACH proposals. They also say it is time to update the rules on animal health and welfare in the light of new scientific developments. They call for the use of renewable and innovative energy solutions to reduce dependence on fossil fuels.

Parliament welcomes the ongoing reform of the Common Agricultural Policy, but is concerned that this should not lead to distortions of competition among farmers in the Member States, while opposing renationalisation. On the other hand, MEPs regret the lack of proposals on the Common Fisheries Policy, given the large number of outstanding issues for the fundamentally important fisheries sector.

Parliament looks forward to concrete guidelines for the manifold challenges linked to an ageing population, especially proposals to provide the highest possible quality of life for the elderly, while ensuring sustainable pensions and health systems. They call on the Commission to work with Member States to increase the labour market participation of people over the age of 55, and call for a stronger emphasis on a 'child-friendly' working environment. They repeat that a strong and vibrant social dimension is an important component of a successful and dynamic economy. Parliament also calls for adequate EU funding for education, culture, youth and media programmes, and looks forward to the Commission communication on youth policy. It also wants to see detailed proposals on how to tackle the gender pay-gap in coming years.

- A safer Europe for the citizen : Parliament stresses the need to seek an appropriate balance between increased security for citizens and proper protection for their fundamental rights. This requires a proper evaluation of measures already adopted. The fight against terrorism and organised crime is critical to building a safer Europe, and the Commission should urgently work on clearer definitions of certain cross-border crimes. Parliament welcomes the common approach to border control, asylum and immigration, including better external border security and agreements with third countries. They call for national governments to forewarn other Member States before taking significant unilateral steps in this area. They also call for the creation of a proper EU legal base for Europol.

Parliament wants the new European Centre for Disease Prevention and Control to be up and running as soon as possible, and stresses the need for early warning and immediate response mechanisms for natural disasters and health crises. It calls for intensified research into HIV/AIDS medication.

On consumer protection, the need for simplification of the rules on cross-border contracts is stressed, while opposing the merging of consumer policy and public health programmes.

- A stronger Europe in a safer world : Parliament calls for the steady and determined development of the EU's common foreign, security and defence policies to help project European values on the world stage. It wants to see rapid agreement on the setting up of the joint external action service, in a way which protects the prerogatives of both the Commission and Parliament.

A high priority on implementing a comprehensive neighbourhood policy is requested, while developing a strong new Eastern dimension and a strengthening and deepening of the Euro-Mediterranean dialogue. MEPs also ask for every possible effort to be made to achieve the reunification of Cyprus.

Parliament calls again or a strengthening of EU-US relations, including a genuine Transatlantic Partnership agreement, with commitments to remove the remaining trade barriers by 2015. MEPs oppose any lifting of the embargo on arms sales to China. They also call for clear and balanced EU input into the process of finding a lasting peace between Israel and a viable, democratic Palestinian state. They welcome the EU's positive role in the reconstruction of Iraq and in efforts to prevent Iran form acquiring military nuclear capability.

Parliament is gravely concerned that none of the eight Millennium Development Goals for sub-Saharan Africa have been met or are on track to be met by 2015. It says the international community must dramatically increase both the quality and quantity of its development assistance.

The Commission's aim to build a strong coalition for further post-Kyoto action on climate change is encouraged, while also encouraging the USA to bring forward its own proposals in this field. They also underline the importance of a multilateral approach to trade policy and a successful conclusion of the Doha Development Agenda. They stress the importance of progressively removing import barriers on goods from developing countries and progressively eliminating all forms of EU export subsidy on agricultural products.

- A Europe that works better - closer to the citizen : the House welcomes the Commission's commitment to applying an impact assessment process for all legislative measures of substance. They invite the Commission to develop a more ambitious approach for guaranteeing Member States comply with their obligations to implement EU directives. They also want a considerably more ambitious approach to the simplification of existing legislation.

Parliament stresses the paramount importance of making Europe work better and bringing it closer to the citizens, and that therefore the EU institutions should work together to help ensure the ratification of the Constitution.

Lastly, Parliament welcomes the Commission's emphasis on value for money and accountability as well as the suggestion of a roadmap aimed at securing a positive statement of assurance from the Court of Auditors. They again call for reforms to the EU Financial Regulation to remove all obstacles to proper implementation. They ask the Commission to create a secure and comprehensive internal control environment for the EU budget to address the problems arising from 'shared management' and to take a much tougher approach with decentralised paying agencies. Parliament emphasises the importance of including 'fraud-proofing' measures in all relevant legislative texts and expect the revision of the OLAF regulation to enhance that body's independent status. It urges the Commission to adopt a pro-active approach to encourage whistle-blowers to come forward, while stressing that the complete and successful implementation of the new accounting system is a priority for the year ahead.