As part of its proposals for a long-term EU Budget for the period 2021-2027, the European Commission proposes to establish a renewed European Social Fund, the ‘European Social Fund Plus’ (ESF+).
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What is new about the ESF+ Regulation?
Over the past 60 years, the European Social Fund has been the EU’s main financial instrument to invest in people, helping them to get better jobs and ensuring fairer job opportunities for all EU citizens.
In the same spirit as the current European Social Fund, the European Social Fund+ will be the main EU financial instrument to invest in people, and a key vector to strengthen social cohesion, improve social fairness and increase competitiveness across Europe. In the future, the priorities of the European Social Fund+ will be even more closely aligned with the recommendations and country analysis provided under the European Semester of policy coordination, and they will be geared towards making the principles of the European Pillar of Social Rights a reality on the ground.
The ESF+ Regulation is the result of a merger of the existing European Social Fund (ESF), the Youth Employment Initiative (YEI), the Fund for European Aid to the most Deprived (FEAD), the Employment and Social Innovation Programme (EaSI) and the EU Health Programme. This is a major step towards streamlining and simplifying existing rules across Funds and will help increase synergies between the different components of the Fund to ensure a better impact.
How does the future ESF+ budget compare to the current one?
For the 2021-2027 period, the Commission proposes to allocate 101.2 billion in current prices from the EU budget to the ESF+. Hence, the share of the European Social Fund Plus from the overall Cohesion Policy budget would increase from the current actual share of 23% of the Structural Funds to 27%.
How much funding is allocated to each of the components of the ESF+?
The overall figure of 101.2 billion includes 100 billion for the ESF+ under shared management with the Member States. At least 25% of this amount will be allocated to fostering social inclusion and at least 4% to fighting material deprivation in order to pursue the priorities and activities of the current FEAD. Moreover, Member States with a rate of young people neither in employment nor in education or training (NEET) above the Union average in 2019 will be required to dedicate at least 10% of their shared management strand of ESF+ allocations to support youth employment. The remaining 1.2 billion are under direct management: the Employment and social innovation strand with 761 million and the Health strand with 413 million. These two strands will provide the means to test innovative solutions in a cross-border approach, for instance to support labour mobility in Europe and to help Member States to the health systems of tomorrow.
What are the objectives of the ESF+?
The main objective of the ESF+ is to contribute to a more social Europe and make the European Pillar of Social Rights a reality on the ground, also as a way to contribute to upward economic and social convergence across Europe. ESF+ funding will also contribute to the implementation of the employment guidelines as defined under the European Semester of policy coordination and to the overall objective of smart, inclusive and sustainable growth beyond 2020 (UN’s sustainable development goals) such as ensuring a high level of human health. The initiative will help to improve employment opportunities, raise the standard of living, facilitate labour mobility and increase economic, social and territorial cohesion as set out in the Treaty on the Functioning of the European Union (TFEU) and the EU Charter of Fundamental Rights.
The ESF+ will invest in 3 main areas: (1) education, training and lifelong learning; (2) effectiveness of labour markets and equal access to quality employment; (3) social inclusion, health and combatting poverty.
How will the ESF+ support the roll-out of the European Pillar of Social Rights?
The ESF+ Regulation makes a direct link between the objectives of the ESF+ and the three chapters of the Pillar: 1) equal opportunities and access to the labour market (including quality and inclusive education and training systems), 2) fair working conditions and 3) social protection and inclusion. ESF+ programmes will have to reflect these priorities in line with the principles of the Pillar. Country-specific priorities will be discussed in the light of the recommendations and analysis provided under the European Semester of policy coordination. The definition of such priorities should be done in an inclusive manner, as the ESF+ proposal aims to strengthen partnerships. The fund will promote the involvement of all stakeholders throughout the different stages of its implementation, including public authorities, economic and social partners, relevant bodies representing civil society and bodies responsible for promoting social inclusion, fundamental rights, rights of persons with disabilities, gender equality and non-discrimination. Member States are expected to allocate an appropriate amount of ESF+ resources in each programme for the capacity building of social partners and civil society organisations.
How will the link between the ESF+ and the European Semester process be reinforced?
The Commission’s proposal establishes an even more direct link between the European Semester and ESF+ investments than is already the case under the current European Social Fund. The country-specific recommendations adopted in the context of the European Semester as well as other key policy challenges jointly identified by the Commission and Member States will be the starting point of ESF+ programming, and Member States will have to allocate sufficient ESF+ resources to help address these challenges and recommendations.
There will be two main rounds of definition of priorities to ensure that investments are well aligned to the country-specific policy challenges: Member States will do so once at the start of the programming period, and once more in the context of the mid-term review of the operational programmes. Monitoring will take place as part of the annual cycle of the European Semester.
How will the ESF+ simplify the management and payment of funds?
One major novelty will be to make it easier for national ESF authorities and project implementers to report and indicate costs. To address the need for simplification and focus on the achievement of results, the ESF+ Regulation will notably broaden the use of simplified cost options for reimbursing Member States on the basis of lump sums or standard costs previously agreed with the Member States. When for some national authorities, it is difficult to come up with an average price, for instance in the context of a new training programme, the Commission will itself propose an average price for some standard measures such as training, based on data from all Member States while taking into account national contexts. The Commission would reimburse each Member State a specified amount once a training measure has been successfully completed.
In addition, the ESF+ Regulation also makes use of the new option to reimburse Member States on the basis of the achievement of results or conditions.
Furthermore, monitoring and reporting requirements will be significantly reduced, and data collection requirements will be simplified.
How will support to disadvantaged groups and the most deprived be ensured under the ESF+?
Under the proposed rules, at least 25% of the ESF+ will be allocated to advance social inclusion. Disadvantaged groups, such as the inactive and long-term unemployed, children, marginalised communities such as the Roma, the most deprived and non-EU nationals are specifically identified under the inclusion policy strand of ESF+.
The ESF+ will integrate support for the most deprived, currently implemented through the European Fund for the Most Deprived (FEAD), with food aid, basic material assistance and accompanying measures. At Union level at least 4% of the resources of the ESF+ strand under shared management should support the most deprived.
FEAD and ESF projects are often managed separately in the current regulatory context, and project requirements differ. Evidence shows, however, that merging the two funds would allow for a more strategic policy approach, strengthening the link between material assistance support (supported by FEAD) and comprehensive social support and professional activation (supported by ESF). The need for better coordination between FEAD and ESF projects has been underlined by FEAD stakeholders themselves.
This being said, the merger will not affect the rules applicable to access support for the most deprived. The FEAD-strand will continue to benefit from simpler rules, to make sure the fund remains accessible to an even wider range of beneficiaries, notably small non-governmental organisations.
Will targeted support to youth employment be maintained under the ESF+?
The Commission’s proposal builds on the achievement of the Youth Employment Initiative during the 2014-2020 programming period, the main financial instrument to roll out the Youth Guarantee. Since 2013, around 18 million young people have registered, and 11 million have received an offer of employment, continued education, training or apprenticeship. There are now 2.2 million less young unemployment and 1.4 million less young people not in employment, education or training.
To continue to get young people with a foot on the job ladder, the present proposal aims to ensure that Member States facing high rates of young people not in employment, education and training (NEET) will be required to allocate at least 10% of their ESF+ resources to youth actions. These can be targeted actions to support youth employment, in particular in the context of the roll-out of national Youth Guarantee schemes. This simplifies some of the programming requirements with a view to facilitating the roll-out on the ground for both authorities and beneficiaries. In addition, all Member States will be able to programme additional funding to support youth employment where this is considered a challenge in the context of the European Semester and the relevant country-specific recommendations.
What will the role of the ESF+ for the integration of non-EU nationals?
The Commission is committed to support Member States’ efforts towards the long-term integration of legally present non-EU nationals. The ESF+ will support the longer-term socio-economic integration of these non-EU nationals with measures to reduce poverty, promote social inclusion and health, and combat discrimination and inequalities. The ESF+ will do so in complementarity with the Asylum, Migration and Integration Fund (AMIF), which will cover shorter-term needs.
Since 2014 the number of non-EU nationals migrating to the EU has increased, in particular the number of refugees. Evidence shows that migrants face considerable difficulties to enter the labour market compared with EU citizens. Therefore, more investment in migrant integration is needed. As the Union’s main instrument for investing in people, regardless of their nationality or citizenship status, the ESF+ is the appropriate tool to address this need.
The Regulation proposal includes a specific objective concerning the integration of non-EU nationals as well as a monitoring indicator.
How will the recently adopted Common Provisions Regulation affect the ESF+?
The Common Provisions Regulation (CPR) establishes the framework for most shared management Funds, including the ESF+.
Changes to the rules under the Common Provisions Regulation which will positively affect the ESF+ are:
- Increased flexibility over the seven-year period will be foreseen until 2025. Allocations for the last 2 years will be made on the basis of a mid-term review. The content of programmes will be more streamlined and strategic, for example through a common programme template for ESF+, the European Regional Development Fund and the Cohesion Fund;
- Continuation of electronic transmission of data, which has proven to significantly reduce the administrative burden;
- The tasks and responsibilities of different bodies in the management and control system are set out in a clearer way;
- Less administrative burden through a significant reduction of the number of controls and audits, while keeping measures in place that prevent possible misuse of funds.
How will the ESF+ interact with other EU instruments investing in people?
To make the European Pillar of Social Rights a reality on the ground, the ESF+ will operate jointly with other relevant funds under the Cohesion and Values headings of the Multiannual Financial Framework (MFF) 2021-2027. The European Regional Development Fund and the Cohesion Fund will continue to support social infrastructure, and Erasmus+ will also help to support skills, upskilling, digital competences. The European Solidarity Corps will continue investing in people’s personal and skills development by providing professional and volunteering opportunities.
In addition, the roll-out of the European Pillar of Social Rights will be supported by a number of instruments and programmes under other headings such as Horizon Europe, the European Agricultural Fund for Rural Development or the Asylum and Migration Fund, adding to the efforts under the ESF+. The ESF+ will also work in complementarity with other EU instruments providing support on the pursuit of reforms, notably the Reform Support Programme.
The streamlined InvestEU Investment Fund will provide 15.2 billion funding, including 4 billion for social investment and skills development under a dedicated window with focus on social enterprises and microenterprises of disadvantaged people. It will replace the current Microfinance and Social Enterprise axis within the Employment and Social Innovation (EaSI) programme.
Finally, the ESF+ and the European Globalisation Adjustment Fund will continue to complement each other, as the ESF+ will continue to support preventive and anticipatory measures, while the EGF will remain a reactive emergency Fund outside the MFF in the event of significant restructuring.
How will the ESF+ support investments in health?
The EU Health Programme will be integrated in ESF+ and its priorities will be in line with the principle of public health policies under the European Pillar of Social Rights.
Already today, the EU Health programme contributes to the effectiveness, accessibility and resilience of health systems of Member States, facilitates access to better and safer healthcare for Union citizens, supports EU health legislation and enhances cross-border cooperation. For instance, under the Health Programme, 24 European Reference Networks have been set up, helping between 27 to 36 million people suffering from rare diseases.
By reducing health inequalities within and between Member States, protecting citizens from serious cross-border health threats, supporting health promotion and disease prevention, the health strand will enhance citizens’ resilience and mobility and help boost healthy lifestyles, complementing action under the ESF+.
What are the main objectives of the health strand?
The health strand of the ESF+ programme aims to support and complement Member States’ efforts to achieve the following objectives:
- Strengthen crisis-preparedness, management and response in the EU to protect citizens against cross-border health threats.
- Empower health systems, by investing in health promotion and disease prevention, supporting the digital transformation of health and care; the development of a sustainable EU health information system; and the national reform processes for more effective, accessible and resilient health systems.
- Support EU health legislation in the area of: medicinal products; medical devices; Health Technology Assessment; substances of human origin; tobacco; cross-border healthcare; and supporting to the Commission’ scientific committees on “Consumer Safety” and on “Health, Environmental and Emerging Risks”
- Support integrated work towards the European Reference Networks (ERNs); the development of cooperation on Health Technology Assessment (HTA) in preparation of new harmonised rules; and the implementation of best practices to support structural innovation in particular in public health.
What are the objectives of the European Globalisation Adjustment Fund post-2020?
The European Globalisation Adjustment Fund (EGF) is a concrete expression of EU solidarity with European workers who lost their jobs. Since its launch in 2007, the Fund has mobilised 611 million targeting 147,000 dismissed workers and young people not in employment, education or training (NEETs).Funding from the Globalisation Adjustment Fund aims at improving the skills and employability of these workers and facilitating the general up-skilling of European workforce, to ensure no one is left behind and help dismissed workers find another job.
What is new for the EGF under the next EU budget?
Currently, redundancy cases are only eligible for EGF support when they are caused by changing global trade patterns or the consequences of the financial and economic crisis. Under the Commission proposal for the next EU budget, a wider scope of significant restructuring events will be eligible for funding. This would ensure that the Fund is flexible enough to respond to current or future economic challenges, such as automation and digitalisation, and become more inclusive.
The Commission also proposes to lower the threshold of displaced workers for a case to be eligible, from 500 to 250. In many regions, very large enterprises simply do not exist, but restructuring events involving a smaller number of redundancies have a very significant impact in those regions.
Finally, the Fund’s co-financing rate which currently stands at 60%, will be aligned with the highest ESF+ co-financing rates for a given Member State. In several cases this would mean that the EU co-finances a higher share of the total cost.
How much funding is allocated to the European Globalisation Adjustment Fund?
The European Globalisation Adjustment Fund will remain one of the special instruments that allow the Union to react to unforeseen circumstances. It is therefore being placed outside the budgetary ceilings of the multiannual financial framework. The maximum amount which could be used by the EGF for the 2021-2027 period is about 1.6 billion (in current prices), on average 225 million per year, compared to 170 million per year today.
Source: European Commission
