The European Social Fund (ESF) is the EU’s main tool to support employment through investing in human capital. Two proposed Regulations for 2014-20 establish new ESF priorities and funding rules. During trilogue negotiations, compromise on several issues proved very difficult to reach.
Common provisions – initial proposal
The Common Provisions Regulation (CPR) is a general regulation that aims to establish common provisions for five Funds including the ESF. The original European Commission (EC) proposal establishes ‘thematic objectives’ to prioritise spending in all funds, and allocates to the ESF a minimum overall share of the total cohesion policy resources (originally proposed to be 25%, or €84 billion in 2011 prices). Groups of regions within the EU (less-developed, transition and most developed regions) would be required to allocate specific proportions of cohesion resources to the ESF. The EU’s food aid programme, the Fund for European Aid to the Most Deprived (FEAD), previously funded under the Common Agricultural Policy, would be included in the ESF envelope.
A 2013 revision to the original proposal also dedicated ESF funds to cover half of the €6 billion budget required for the Youth Employment Initiative, a new ESF measure to encourage employment in the age group hardest hit by the financial crisis.
ESF previsions – initial proposal
In parallel with the general CPR Regulation, the EC’s proposal for a European Social Fund (ESF) Regulation aims to align the instrument to Europe 2020 targets (particularly as regards employment, education and the fight against social exclusion), strengthen the social dimension and simplify administrative procedures, particularly for beneficiaries of small grants. In line with the general cohesion strategy, each Member State (MS) would have to concentrate ESF resources on four out of 18 ‘investment priorities’ that support four social-related thematic objectives, namely, promoting employment and mobility; investing in education; promoting social inclusion; and enhancing institutions. In addition, 20% of ESF funding in all MS would be earmarked for combating social exclusion and poverty.
The report of the Regional Development (REGI) Committee (rapporteurs L. van Nistelrooij, EPP, Netherlands; C. A. Krehl, S&D, Germany) on the CPR replaced mandatory ESF spending levels with ones based on previous spending in 2007-13, and funded FEAD from resources other than those dedicated to the ESF.
The report of the Employment and Social Affairs (EMPL) Committee on the ESF (rapporteur E. Morin-Chartier, EPP, France) re-affirmed the 25% ESF funding level and earmarked 20% of ESF funds for social exclusion and poverty reduction. In addition, it dedicated a small allocation to local and regional partners, encouraged recognition of social innovation and offered MS the ability to concentrate on more options from an increased and expanded set of investment priorities.
Negotiations between the European Parliament, Council and the EC related to the both the CPR and the ESF Regulation were long and intense. In terms of the CPR, following a June 2013 agreement, only 23.1% of cohesion funding (minus the resources needed for the Connecting Europe Facility and FEAD) would be allocated to the ESF. The minimum ESF allocation for 2014-20 would be approximately €71 billion, lower than the allocation for 2007-13.
In the negotiation of the ESF Regulation, the EP was successful in maintaining the strict 20% minimum allocation for fighting social exclusion and poverty; in increasing MS choice to five out of 19 investment priorities; and in allowing MS to set the upper age limit for the Youth Employment Initiative to 30 years (instead of 25) if they so choose.