Lords disagree that UK should stop getting European Social Fund

30 March 2010

The House of Lords EU Committee has today criticised the Government's position that prosperous member states, including the UK, should stop receiving European Social Fund (ESF) cash which is intended to improve employment prospects for workers throughout the internal market

Under such a move the UK could stand to lose billions of euros' worth of EU funding, with no clear plan of what would follow in its place.

Between 2007-13 the UK will receive nearly €4.5bn from the ESF. This would be phased out after 2013 under the Government’s current policy advocating withdrawal of the Fund from richer member states.

The Committee argues that the ESF is a 'concrete expression' of solidarity among all of Europe's citizens and it stresses its importance in improving people’s employability and contributing to employment opportunities across the EU.

It should not, the Committee suggests, be focused exclusively on poorer EU countries. The Committee also points out that there are pockets of deprivation and high levels of unemployment even in richer member states such as the UK.

Related to this regional variation in employment patterns, the Committee emphasises the need for regional flexibility to be built into the ESF. This would enable regions to provide effective support for people in their area, for example tailoring support and targeting funding according to local employment patterns and skills needs.

The Committee also sets out suggestions for how the operation of the ESF can be improved. These include;

  • assessment of the successes of ESF-funded projects should not be judged solely on 'hard' outcomes of the numbers finding work. This leads programme providers to focus on those who are easier to assist back to work, possibly ignoring 'harder to reach' groups who may not find employment during the lifetime of a programme but will still gain significant benefit from taking part and which could lead to employment further down the line
  • to ensure this the Committee recommends the Government reconsider their approach of increasingly withholding payment from providers unless they get people into work and keep them there. It argues that failure to secure a job does not in itself indicate a flaw in the activity
  • to ensure ESF providers do not cherry pick those individuals who are easiest to get into work the Committee recommends that delivery bodies be contractually obliged to demonstrate that they are delivering to the hardest to reach groups

Commenting Baroness Howarth, chairman of the House of Lords EU Sub-Committee on Social Policy and Consumer Affairs, said:

"We strongly disagree with the Government’s position that more prosperous member states should stop receiving ESF funding. Such a move could mean the UK would lose out on significant funding which is vital in helping the unemployed back into work in poorer areas of the UK.

"The UK will receive nearly €4.5bn from the ESF between 2007-2013; to lose that sort of investment in improving employment prospects in the current economic climate would be very damaging.

"One of the key features of the ESF is that it is an expression of solidarity between EU citizens so it would be wrong to limit access to it only to poorer member states.

"It is also important to remember that there are pockets of severe depravation and citizens facing real difficulties in entering the labour market even in the richest EU countries.

"We do suggest that the ESF is improved so it doesn’t focus solely on 'hard outcomes' of people immediately finding work. This will mean providers favour those closest to finding employment. It is important the ESF also helps harder to reach groups."

The current indicative allocation of ESF funds to English regions for 2007-2013 is set out below. This gives an indication of the level of EU investment each region could stand to lose if ESF funding is withdrawn from more prosperous member states.

  • Cornwall and Isles of Scilly - €196.4m
  • East of England - €230.3m
  • East Midland - €248m
  • London - €490.8m
  • Merseyside - €205.3m
  • North East - €238.6m
  • North West (excl. Merseyside) - €336.2m
  • South East - €228.8m
  • South West (excl. Cornwall) - €144.1m
  • South Yorkshire - €180.7m
  • West Midlands - €372.4m
  • Yorkshire and Humber (excl S.Yorkshire) - €214.9m

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