EN Official Journal of the European Union C 13/40

Opinion of the European Economic and Social Committee on ‘Principles for effective and reliable welfare provision systems’

(own-initiative opinion)

(2016/C 013/08)

Rapporteur: Mr Bernd SCHLÜTER

On 22 January 2015, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on:

Principles for effective and reliable welfare provision systems.

(own-initiative opinion)

The Section for Employment, Social Affairs and Citizenship, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 1 September 2015.

At its 510th plenary session, held on 16 and 17 September 2015 (meeting of 17 September), the European Economic and Social Committee adopted the following opinion by 130 votes to 46 with 10 abstentions.

1. Conclusions and recommendations

1.1. The EESC advocates clearer EU strategic priorities in social policy. This means learning from the crisis, the policies adopted to address it and the loss of trust among the general population.

1.2. The European Commission is urged to frame general social policy principles as part of a solid work programme. The EESC presents proposals for these principles in point 4 below. This effort could be based on a flagship initiative, governance rules or a White Paper. The starting point should be improved comparative data collection at EU level and in the Member States. Pure input indicators (how much money a given Member State spends on a given welfare service or benefit) are not sufficient to indicate the quality of a welfare provision system.

1.3. The responsibilities of the Member States and the political and cultural differences between welfare systems must be heeded and a consensus pursued between Member States as far as possible when framing social policy principles with the aim of bringing about upward convergence of welfare standards.

1.4. These social policy principles should form a substantive basis, for instance, for future recommendations to the Member States as part of a more effective European Semester (1). However, the principles should also be applied through the Structural Funds, the open method of coordination and the social impact assessment as set out in Article 9 TFEU. A binding social protection floor should be aspired to as part of these measures. The existing legal bases should be used to achieve this.

1.5. Social policy principles should form a basis for the action of the EU institutions, especially in economic governance, fiscal control and crisis management.

1.6. The social partners are key players in social insurance systems financed and managed jointly by employers and employees and other systems that have developed by negotiation between the social partners. They should be involved in the framing of social policy principles. Civil society actors and associations of welfare providers, social businesses, local authorities, welfare authorities, social insurance bodies, users and consumers should also be involved within their areas of responsibility.

1.7. In this opinion the EESC will set out specific proposals for social policy principles in relation to welfare provision systems. The goal is to improve the effectiveness and reliability of the services and benefits of social protection systems, as well as social security and health systems, irrespective of the nature of the service provider and the type of service or benefit provided. The EESC is concerned above all with guaranteeing the provision of modern public interest-orientated social services in all EU countries from a legal and financial standpoint.

1.8. The EESC recognises the diversity of systems and considers among other things the goals, form and substance of welfare provision, the balance between solidarity and personal responsibility, legal guarantees, funding and quality. It also looks at the position of users and welfare providers. The Committee sees a need to safeguard basic welfare provision by having common rules at EU level.

2. Introduction: Background and current state of play

2.1. The foundation of European social policy includes human rights, the lessons of the two world wars (2), the principle — enshrined in the Treaties — of the social market economy, the goals of the Europe 2020 strategy, the needs of productive national economies, the duty to combat poverty, the social, employment and health policy chapters of the Treaties, the objective of social cohesion and the common competition rules in Article 3 TEU. Article 151 TFEU stipulates that the objective of social policy is to promote employment, improve living conditions, ensure proper social protection and combat exclusion. The European social model is the expression of a unique community of values and culture (3) that melds democracy and the rule of law with social responsibility and solidarity. The EESC would like to strengthen this model and ensure its future viability.

2.2. The EESC firmly believes that social policy should be a pillar of EU policy, both in its own right and as a means of promoting long-term growth and employment (4). The Committee commends the progress already made in employment policy, on many aspects of coordination and in industrial safety. It affirms the investment function (5) of effective welfare provision systems and points to the moral, social and material cost of neglecting social policy. The EESC believes that efficient, innovative national economies and reliable, efficient and effective welfare provision are interdependent. Modern welfare systems can make national economies more resilient in crises; they promote employment and indeed create high employment potential, including for disadvantaged regions (6). In today’s technology-driven information society, and in the light of demographic trends (7) and migration, there is no long-term competitive edge to be gained by limiting spending in areas such as active inclusion, empowerment of job-seekers and opportunities for children and young people. Developing existing systems based on common principles could help to promote equal opportunities and fair competition within the EU.

2.3. One of the purposes of welfare and healthcare systems and equivalent systems is to achieve necessary social equity, combat poverty, and ensure subsistence support and social harmony. Almost every EU citizen is reliant on the support of welfare services at certain times of their life. Among other things, welfare systems ensure adequate pension provision and assistance from qualified professionals for people requiring care or support.

2.4. Employers and employees have an interest in, for example, a good work-life balance, health promotion and empowerment. Professional welfare provision helps people to communicate and cope with everyday life, furthers their skills, and supports them with problems such as addiction and crises and with care and education in the family.

2.5. The EESC observes that substantial differences exist in the effectiveness, reliability and efficiency of welfare systems (8). Well-functioning systems exist in many Member States, but all countries would nevertheless benefit from a general debate about social policy. Minimum subsistence protection by means of welfare provision (minimum income), professional social services and effective integration into employment and society are not guaranteed everywhere. Healthcare in particular is often not universally accessible — for instance where someone is unable to afford official or unofficial extra charges. Professional services, including non-residential care, support for people with disabilities, and help with educational or developmental problems are not available in all regions and Member States. The EESC observes that collective financing and legal safeguards sometimes need improving.

2.6. A recent study from the Bertelsmann Foundation (9) demonstrated wide disparities in the efficiency of welfare systems and alarming trends in wealth and poverty in the EU and the Member States, and called for the EU to step up its social policy efforts. The study also showed that effective welfare systems are feasible, even where GDP is relatively low, and that inadequate welfare systems may still be seen where GDP is relatively high. Increasing poverty is a threat to social harmony and economic development (10). Social policy proposals should also be put forward to address both the growing divergence between the Member States and worrying political developments.

2.7. The substantive basis for recommendations to the Member States and for crisis policies should be improved. Instead of calls for humanitarian measures after the event, the EU should adhere to consistent social policy principles. The controversial use of taxpayers’ money to bail out banks engaging in high-risk activities should be reasonably proportionate to investment in the proper functioning of welfare systems. The internal market rules, e.g. in relation to state aids and public procurement, are already having a substantial impact on welfare systems and services without having being obviously evaluated on social policy criteria.

2.8. Under the new Treaty objective of a social market economy (11), internal market policy should be complemented by social policy elements (12). The EESC echoes current calls (13) on the Commission and the European Council to flesh out social policy promises and implement measures (14).

2.9. A new phase of European social policy could build on the following earlier efforts: the Council’s call for a guaranteed minimum income, dating back to 1992 (15); its adoption of the Social Agenda in 2000; the requirement under Article 12 of the European Social Charter that the parties maintain a system of social security; the objectives of social cohesion and protection of services of general interest contained in the EU Treaties (16); the minimum standards for welfare systems published by the ILO (17); the still valid EU White Paper on Social Policy published in 1994; the right to a decent existence laid down at EU level (18); key benchmarks contained in the UN Convention on the Rights of Persons with Disabilities.

2.10. In its opinion SOC/482, the EESC, like the European Parliament (19), the Committee of the Regions (20) and other relevant organisations, calls for an adequate minimum income (21). The Committee has actively promoted discussion about welfare provision, social businesses, social investment, employment, Article 9 TFEU, the youth initiative, economic governance and services of general interest. This opinion is directly related to numerous other EESC and EU documents which cannot be cited individually.

3. General comments: objectives and content of the opinion

3.1. This opinion focuses on one aspect of a necessary social policy agenda, namely improving the effectiveness and reliability of social protection, and of the social security and healthcare systems. It considers welfare provision that is wholly or partly financed through taxes or social insurance systems and that falls within the scope of public social policy under social legislation or joint (employer/employee) agreements in a way that can be monitored. The nature of the service provider is not the deciding factor here.‘Welfare provision’ as discussed in this opinion may be delivered by central and local administrations, social insurance bodies, independent social businesses and charities or undertakings with various legal forms. All these are covered by the term ‘welfare providers’ if they deliver social services themselves. The concept ‘welfare provision’ embraces all types of service and benefit here, including services and cash payments in the social and healthcare sector. ‘Social insurance’ denotes joint (employer/employee), contribution-based and/or statutory social insurance arrangements and/or mutual insurance arrangements, which play a role in social security systems regulated by social law or joint (employer/employee) agreements.

3.2. Care needs to be taken in discussions and translations when it comes to social policy, owing to the multiplicity of welfare systems, services and benefits, terms and definitions. The systems of the Member States reflect their national social policies, culture and history. These should be further developed on the basis of the European social model. A reasonable balance must be achieved between the diversity of systems and the need for common principles (22).

3.3. The EU should create a common forum for discussion about social policy, draw up modern standards and take initiatives itself. It should promote convergence between welfare systems as they continue to evolve. Social policy principles could provide a substantive basis for the Commission’s recommendations, especially in the context of the European Semester, the Europe 2020 strategy, the open method of coordination and application of the social impact assessment under Article 9 TFEU (23). Such principles should also provide the substantive basis for a binding social protection floor and for the action and governance (24) of the EU institutions themselves, especially in relation to crisis management, fiscal control and economic governance.

3.4. The future sustainability of welfare provision systems needs to be assessed. Welfare providers should be bound by democratically legitimised social welfare goals while preserving their conceptual autonomy.

3.5. Decisions about welfare provision are generally taken by welfare authorities, social insurance bodies or third party service providers such as doctors prescribing a specific treatment. It is important to separate the issue of delivering and financing welfare from decisions about entitlement to welfare: for instance, purely cash benefits may be paid to a person with or without the obligation to use certain professional services. Social services may be delivered directly by local authorities, other welfare authorities or social insurance bodies. However, if such services are delivered by independent welfare providers, the legal relationship and funding may be subject to very different rules. For instance, there are procurement systems, service level agreements between welfare providers and funding bodies, reimbursement arrangements, voucher systems and non-case-specific direct support from welfare providers, especially in the sphere of advice and prevention. With contract and voucher systems, the public funding body pays the welfare provider directly based on case numbers. All systems need to be examined to establish whether adequate legal protection and sufficient user choice and participation options exist.

3.6. The social partners play a key role in social insurance systems in particular. They should therefore be key contributors in the framing of social policy principles. National and local welfare authorities, social insurance bodies and independent welfare providers are pivotal players in welfare provision, which means that their representatives must also be consistently involved in their areas of responsibility.

3.7. Bearing in mind that a reasonable balance must be achieved between the competences of Member States, shared European values and fair competition within the EU, the following principles are intended to provide a factual basis to stimulate further EU action on social policy.

4. Principles of welfare provision systems

4.1. Social protection floor: guarantee of basic welfare provision, including subsidiary subsistence protection/minimum income for people without an adequate income, e.g. from work, pension or other welfare provision. This includes developing common indicators for basic welfare provision (25). This financial subsistence protection should be at least sufficient to cover the real costs of food, accommodation, clothing, water, energy and basic healthcare.

4.2. Need: development and provision of modern, professional social and healthcare services for different problem situations, including for families, people with disabilities, the sick, the unemployed, lone parents, children, family caregivers, refugees, young people with developmental problems (26), parents with parenting issues, care in the home and other services in private homes (27), and help with overindebtedness (28), addictive behaviour, homelessness and psychosocial problems. Effective social services include advice, supervision, guidance, support, care, empowerment and education, treatment and therapy (29). Because there are many reasons for unemployment and because it is important to prevent the downward spiral into poverty, it makes sense to deploy active labour market measures that are legally guaranteed to support prompt reintegration into the labour market, and until that reintegration is achieved to secure decent benefits for all jobseekers, particularly young workers seeking their first job and women wishing to return to work after a long career break.

4.3. Precise definition of aims: development of clear social policy goals for welfare provision, e.g. equal opportunities and intergenerational equity, active inclusion, compensating for disadvantage, work-life balance, protection against life’s risks, prevention, crisis measures, participation in the labour market and in society, material provision for old age, empowerment, etc. This goes together with a clear definition in social law of the categories of services and benefits: monetary and/or service-based, non-residential, residential, etc. A balance should be achieved between users’ right to decide for themselves and the objective of ensuring the effectiveness of welfare provision.

4.4. Accessibility: ensuring that welfare provision, and above all social services, is affordable and accessible on a non-discriminatory basis wherever and whenever they are needed. Accessibility is facilitated by collective and sustainable funding, transparency as regards the services and benefits available and a specific legal guarantee with appeal and complaints procedures. Where they exist, cash contribution requirements should be balanced and should not constitute a bar to access. Bureaucratic procedures to verify actual needs can be counterproductive in the case of certain services such as drug dependency programmes or help with psychosocial problems. In particular, counselling and prevention services should be actively offered to users.

4.5. Proportionality: services and benefits should be necessary and appropriate in their form and extent. Discretionary decisions and social legislation should take this into account. The cost should be in reasonable proportion to the expected outcome of the welfare service or benefit provided. The proportionality principle should also be applied to a person’s legal obligation to use a service or adopt any other course of action, and to the relationship between rights and obligations.

4.6. Solidarity: funding of welfare provision should essentially be supported by solidarity-based social insurance systems and fair, solidarity-based tax systems. Collective financing should as far as possible include all social groups and strata. This would enhance the reliability, acceptance and sustainability of financing. Undeclared work (30) and tax avoidance are harmful to welfare systems. Demographic and economic trends may make it appropriate to include all types of income, e.g. also income from capital. Better coordination between taxation and funding systems in the EU could provide a stronger financial basis. Private investment, donations, civic and religious action and grants from foundations are welcome supplements to conventional funding, but cannot constitute legal entitlements or be used to support infrastructure.

4.7. Personal responsibility: job-seekers and those finding it difficult to enter the labour market etc. should be supported through social services and incentive systems with the aim of enabling them to subsist, fully or partially, through their own efforts. People should have access to supplementary cover managed on a not-for-profit basis under negotiated joint agreements that complement public systems. Professional support with developing vocational qualifications and personal skills — such as communication, social and general coping skills — is often required so that people are sufficiently capable of assuming responsibility for themselves and being good citizens. As regards individuals staying healthy, a healthy lifestyle could be promoted by social security systems through preventative measures, incentives and better consumer protection.

4.8. Participation: all services and benefits — alone or in combination — should help people to play their part in society. Social participation embraces occupational, cultural and political participation, as well as sharing in social prosperity.

4.9. Structure: rational configuration of the legal and financial relationship between users, welfare providers (public or independent, depending on the system), welfare authorities and social insurance bodies. Where independent welfare providers are involved in public welfare provision systems, e.g. under social legislation and through funding, the services and benefits they provide, in particular with regard to funding and accessibility, should be based on the principles outlined here. Such welfare providers should be collectively funded and their activities regulated under social legislation so that they are able to make high-quality services and benefits available to the whole population.

4.10. User’s right to decide: users are not passive recipients, but partners in assistance and citizens with entitlements. Within an appropriate budget, they should be able to choose between different types of service or benefit, e.g. residential and non-residential services and other types of service such as sheltered housing. The right type of assistance depends on individual circumstances, on the specific need for professional help as determined by trained experts, on the wishes of the individual and on the local situation. Where independent welfare providers are involved in public welfare provision systems, e.g. under social legislation and through financing, users should be able to choose from a range of providers.

4.11. Legal certainty: services and benefits should be legally guaranteed, for instance under social legislation or similar democratic legal instruments of the Member States. Social security law should cover: legal entitlements; decision-making rules; cooperation requirements for users; and a description of conditions for provision of services/benefits, complaints and appeals options, public oversight of private providers of public services, if applicable, quality rules and access guarantees, infrastructure requirement, type of funding, etc. Legal rights and entitlements of users should at least be guaranteed for basic welfare and healthcare services. Discretionary decisions may take more account of circumstances in some spheres of welfare provision. The well-being of vulnerable people should be subject to special legal protection (31). Independent welfare providers must enjoy a protected legal status and non-discriminatory access to service provision, assuming that systems are not based on a monopoly. In many Member States the position of social policy is underpinned by a constitutional welfare state principle guaranteeing basic welfare provision, including in times of crisis.

4.12. Public interest focus: in particular, third-sector and participatory forms of undertaking and organisation (32), such as non-profit organisations, social businesses, public services, associations, certain types of foundation and cooperative, user associations and other civil society players, should enjoy appropriate financial and legal conditions. There should be a thorough debate in the context of social policy about financing for-profit companies operating in this area through taxes or social security contributions, and there should be adequate oversight and at least a framework for profit distribution.

4.13. Transparency: the use of public funds by welfare providers and public administrations should be transparent. The general public should be able to find out about the reasons for service and procurement decisions, legal bases, etc.

4.14. Joined-up approach: People’s everyday situations, changing life paths, new family constellations, ageing and immigration call for integrated and joined-up services (33). Segregation, exclusion and discrimination should be avoided.

4.15. Level playing-field: users, welfare authorities and welfare providers should have legally enshrined and enforceable rights and duties. If penalties or compensation arrangements exist for breaches of rules, then they should apply to violations not only by users but also by welfare authorities.

4.16. Quality: social services should be backed up by quality assurance measures. Needs assessment and planning and implementation of measures should be based on social research findings and expertise. Personalised services should be enhanced through training, professionalisation and appropriate remuneration and working conditions achieved through free collective bargaining. The Quality Framework for Services of General Interest in Europe (34) can serve as a model for EU recommendations on welfare providers. Where expedient, the mobilisation and guidance of volunteers should be encouraged.

4.17. Coordination: management of cross-border issues relating to social security and social protection should be improved. The capacity of finance providers and taxpayers and contributors should be considered here, as well as the principles of social solidarity and proportionality. It is important to avoid placing a disproportionate burden on those national systems that are particularly efficient.

Brussels, 17 September 2015. The President of the European Economic and Social Committee Henri MALOSSE

(1) For example based on more consistent oversight and assessment of how recommendations are implemented and linking with the Structural Funds (OJ C 170, 5.6.2014, p. 23).

(2) Thus Winston Churchill in his 1946 speech in Zürich: ‘We must build a kind of United States of Europe’.

(3) EU Charter of Fundamental Rights; European Social Charter.

(4) OJ C 143, 22.5.2012, p. 102.

(5) See COM(2013) 83, 20.2.2013; OJ C 226, 16.7.2014, p. 21.

(6) OJ C 143, 22.5.2012, p. 23; OJ C 271, 19.9.2013, p. 91; OJ C 226, 16.7.2014, p. 21.

(7) OJ C 161, 6.6.2013, p. 27.

(8) European Semester documents; Caritas Europa: The Future of the Welfare State, 2012; Social Protection Platform documents.

(9) Social Inclusion Monitor Europe (SIM) — Index Report Social Justice in the EU — A Cross-National Comparison, 2014.

(10) OECD: In It Together, 2015. In most OECD countries the gap between richest and poorest is at a 30-year high, with the richest 10 % of the population earning 9,6 times as much as the poorest 10 % in the OECD as a whole. In the 1980s this ratio was 7,1.

(11) Article 3(3) TEU.

(12) E.g. Friends of Europe, Social Union, 23.3.2015.

(13) See EU social investment package; KU Leuven, 2014: Social Protection at the Top of the International Agenda, 2014; EESC conference: Towards a more effective Europe 2020 — civil society’s proposals for boosting social inclusion and competitiveness in Europe,4.12.2014; EESC opinion on An Action Plan for Europe, April 2014.

(14) See for instance: COM(2014) 902 final, 28.11.2014; Mission Letter to Commissioner Thyssen, 1.11.2014; Juncker Priorities, 12.9.2014; meetings of the Luxembourg Council presidency and social affairs ministers on 16 and 17 July 2015; strengthening of the social dimension; reports of the Social Protection Committee.

(15) Council Recommendation of 24.6.1992 (OJ L 245, 26.8.1992, p. 46).

(16) For example: Articles 2 and 3(3) TEU; Articles 2(3), 14, 56, 107, 162 et seq., 168, 174 and 175(3) TFEU and Protocol No 26 of the Treaty on the Functioning of the EU (TFEU).

(17) ILO 2012 Recommendations; ILO 2014-2015 World Social Protection Report.

(18) EU Charter of Fundamental Rights, Article 1 in conjunction with Article 34(3).

(19) Resolution of 20.10.2010 (2010/2039(INI)) (OJ C 70 E, 8.3.2012, p. 8); Resolution of 15.11.2011 (2010/2039(INI)) (OJ C 153 E, 31.5.2013, p. 57).

(20) http://toad.cor.europa.eu/corwipdetail.aspx?folderpath=ECOS-V%2f012&id=20923

(21) OJ C 170, 5.6.2014, p. 23.

(22) Bearing in mind the right of Member States to define the fundamental principles of their welfare systems, as set out in Article 153(4) TFEU.

(23) See Conference of the European Trade Union Institute held on 3 February 2015: The sovereign debt crisis, the EU and welfare state reform.

(24) The Council presidency submitted proposals on the social dimension of the governance framework to the social affairs ministers in July 2015.

(25) OJ C 170, 5.6.2014, p. 23.

(26) Arbeitsgemeinschaft für Kinder- und Jugendhilfe (Child and Youth Welfare Association): The European Dimensions for Child and Youth, 2015.

(27) OJ C 12, 15.1.2015, p. 16; OJ C 21, 21.1.2011, p. 39.

(28) OJ C 311, 12.9.2014, p. 38.

(29) See Dahme/Wohlfahrt, 2015.

(30) OJ C 458, 19.12.2014, p. 43.

(31) For example, children and young people, pregnant women and people without legal capacity.

(32) EESC work on the Social Business Initiative.

(33) Kocher/Welti, 2010.

(34) See Communication on ‘A Quality Framework for Services of General Interest in Europe’ (COM(2011) 900 final).