A4-0327/97

Resolution on the future of the European Social Fund

The European Parliament,

- having regard to the EC Treaty, in particular Articles 123, 130b and 3(i) on the establishment of the European Social Fund,

- having regard to Rule 148 of its Rules of Procedure,

- having regard to the Commission reports entitled 'Employment in Europe - 1995' (COM(95)0396 - C4-0384/95) and 'Employment in Europe - 1996' (COM(96)0485 - C4-0553/96)),

- having regard to the Commission's first report on economic and social cohesion (COM(96)0542 - C4-0016/97),

- having regard to the Commission communication on Objective 4 and ADAPT (SEC(96)2150 - C4-0645/96),

- having regard to the Commission document entitled 'Agenda 2000 - for a stronger and wider Union' (COM(97)2000 - C4-0372/97),

- having regard to its resolution of 28 November 1996 on the Commission report entitled 'Employment in Europe - 1996' and the Commission communication entitled 'Action for employment in Europe: a confidence pact' ((OJ C 380, 16.12.1996, p. 84.)),

- having regard to its resolution of 12 March 1997 on the Commission's White Paper entitled 'Education and training - teaching and learning - towards the learning society' ((OJ C 115, 14.4.1997, p. 85.)),

- having regard to the report of the Committee on Employment and Social Affairs and the opinion of the Committee on Budgets (A4-0327/97),

A. whereas under Article 123 of the EC Treaty the European Social Fund has the task of improving employment opportunities for workers in the internal market by increasing their mobility and facilitating their adaptation to industrial changes, in particular through vocational training and retraining, and contributing thereby to raising the standard of living,

B. whereas under Article 130b of the EC Treaty the European Social Fund is intended to contribute to strengthening economic and social cohesion in the Community,

C. whereas the European Social Fund is expressly referred to in Article 3(i) of the EC Treaty as an instrument of the EU's policy in the social sphere,

D. whereas the European Social Fund accordingly has a dual role, namely to contribute to economic and social cohesion both as an instrument of employment policy and as an instrument of social policy,

Social cohesion

E. whereas social cohesion consists not only of giving all citizens equal access to the labour market but also of increasing everyone's opportunities of participating in society on equal terms,

F. whereas economic and social cohesion as an expression of solidarity contributes significantly to acceptance of the idea of European integration among European citizens and thus forms a vital foundation for the European Union,

G. whereas the discrepancy between the regions in terms of unemployment has increased to such an extent that unemployment in the 25 regions worst affected by unemployment is four times as high as in the 25 regions with the lowest unemployment,

H. whereas (in 1993) 57 million people in the EU lived in households earning less than half the national average income and thus falling below the poverty line,

I. whereas all Member States, with the exception of Spain, Ireland and Portugal, have been affected by this growth in poverty; whereas one in five people in Portugal, the UK, Greece, Ireland, Italy and Spain live below the poverty line,

J. whereas the disparities in employment and prosperity between Member States are declining but those among regions are growing,

K. whereas these trends seriously endanger social cohesion in two respects, firstly at regional level since the discrepancy between regions with high and lower unemployment has increased, and secondly in vertical terms since the social cohesion between rich and poor, between people with and without opportunities for participating in society within the same Member State or region, has decreased,

Active employment policy

L. whereas considerable efforts in terms of state transfers by the Member States are needed in order to reduce from 40% to 15% the proportion of households in the EU Member States living below the poverty income line,

M. whereas expenditure on an active labour policy, averaged throughout the Community, represents only one third of total expenditure on employment policy, whilst two-thirds are spent on passive employment measures (income support); whereas the proportion of expenditure on active labour policy as a percentage of GDP has fallen since 1990,

N. whereas the Social Fund, as the Community social instrument with the largest budget in the field of social policy, is the only structural fund which benefits people directly and is the flagship of the EU's efforts to combat unemployment and hence social exclusion,

O. whereas the European Council has been calling since the Essen Summit for a strengthening of active employment policies,

P. whereas the European Council in Amsterdam, in its resolutions on stability, growth and employment, placed employment promotion on the same footing as efforts towards budgetary and economic convergence,

The current support period

Q. whereas the administration of Social Fund support is too complicated and too time-consuming since it involves seven objectives, 13 Community initiatives and the authorization of over 900 programme planning documents,

R. whereas the restrictions laid down in the Community support frameworks, operational programmes and single programme planning documents have in the past frequently proved too rigid and inflexible, and whereas too many amendments required the approval of the Commission, thus considerably increasing administrative costs,

S. whereas the payment deadline set out in the regulation, which states that the end-recipient must be in possession of the Structural Fund appropriations three months after the Commission has paid these appropriations to the Member States, is frequently not complied with,

T. whereas delays in payment often prevent Social Fund measures from being implemented on time and can result in considerable financial burdens for financially weak end-recipients,

U. whereas the European Social Fund should not be implemented centralistically and bureaucratically by the Member States,

V. whereas the integrated planning approach in multi-fund programmes enables strategic, targeted and coordinated measures to be implemented within one region,

W. whereas particularly positive results have been achieved in support for urban problem areas by means of broad partnership alliances using the 'pathway' approach, whereby the local administration obtains the involvement in the planning process not only of the social partners but also of local interest groups and the general public,

X. whereas in the implementation of multi-fund programmes at regional and local level an integrated planning approach can be achieved only with considerable difficulty in view of the differing procedures for the intervention of the various Structural Funds,

Y. whereas in the first half of the current support period the flow of appropriations from the Social Fund has noticeably lagged behind the financial plan because

- the Structural Fund Regulations were adopted too late by the Council,

- the introduction of the new Objective 4 entailed entirely new support criteria and standard requirements, and because there were significant difficulties in obtaining the acceptance of national administrations and enterprises for Objective 4,

- the internal coordination problems between the Commission DGs involved (V, XVI and IV) resulted in delays to the approval of planning documents at the stage of the consideration of the programmes submitted,

- in some cases a divergence of views between the Member State and the Commission on concrete measures to realize the objectives of the European Social Fund made it harder to adopt the programmes speedily,

- the payment of further appropriations was linked to the rate of overall (national) implementation, which fails to take account of the actual implementation of the individual (regional) programmes,

- the Member States and regions have not always supplied the necessary matching funds,

Z. whereas the almost automatic carry-over of unused Social Fund appropriations at the end of a programming period to subsequent budgetary years leads to an accumulation of funds beyond the capacity of Member States to absorb them,

Challenges for the Social Fund

AA. whereas the renewed Social Fund must accord with the employment objectives of the Amsterdam Treaty,

AB. whereas the speed of industrial change is still increasing and requires many new qualifications while devaluing many of the old ones; whereas, however, most workers are unable to participate continually in professional training and retraining schemes, with the result that the existing gap between the qualifications required on the labour market and those which workers actually possess is still widening,

AC. whereas, as a result of industrial change, workers with low levels of qualifications and those aged over 45 are in particular danger of unemployment,

AD. whereas the transformation of the world of work will require in future not only new forms of work but also an alternation between phases of work and phases of professional training (otherwise known as 'lifelong learning'),

AE. whereas none of the EU Member States yet has vocational training and retraining systems which are adequately prepared to cope with these future demands,

AF. whereas the competitiveness of the European Union on world markets is decisively affected by the extent to which promising industries and services at the highest level can be persuaded to set up in the European Union, which can only be done if a properly qualified workforce is available,

AG. whereas over one quarter of the 18 million registered unemployed in the European Union (5 million) are young people under 25,

AH. whereas women are proportionally harder hit by unemployment than men (12.5% as against 9.5%),

AI. whereas long-term unemployment in the EU has risen to a level where it now represents over 50% of the unemployed, and whereas over 30% of the unemployed have had no work for over two years, with women and the over-45s again being disproportionately affected,

AJ. whereas one tenth of the unemployed are disabled and whereas the disabled are disproportionately affected by unemployment,

AK. whereas the proportion of unemployed among the socially excluded is significantly higher than among the rest of the population,

AL. whereas new forms of cooperation between local authorities, social partners and non-governmental organizations at local and regional level must be used to overcome the employment crisis,

AM. whereas the range of tasks allotted to the Social Fund has already on repeated occasions in the past had to be adapted to meet new challenges,

The targeted use of limited funds

AN. whereas the Commission considers that, from the year 2000, the appropriations for the Structural Funds should for the first time be set at a percentage of GNP (0.46%), which means a dynamic adjustment to economic growth and inflation,

AO. whereas, the social context having changed, it is necessary to define criteria more appropriate to the needs of the people, especially in urban areas, in order to facilitate the complete and effective utilization of all financial resources,

AP. whereas limited funds must be used in a targeted and appropriate manner in order to guarantee maximum efficiency, and whereas allocating appropriations on the basis of fixed national entitlements makes it more difficult to divide these appropriations up among the individual structural funds in a targeted and appropriate manner,

AQ. whereas in past programming periods it was not possible to commit some structural fund appropriations, which led to the repayment of EU funds to national budgets,

AR. whereas failure fully to take up appropriations in time can no longer be accepted in a situation where funds are limited, without prejudice, however, to monitoring of the quality of measures,

AS. whereas a system of incentives or rewards may help improve the full take-up of appropriations,

Enlargement

AT. whereas the accession of new Member States from Central and Eastern Europe should be preceded by an adequate preparation period during which the necessary economic catching-up process can proceed with Community support, so that enlargement does not threaten economic and social cohesion,

AU. whereas an assessment should be made as to whether the existing structures of the funds are appropriate for prospective Member States, which are mainly struggling to carry out national adjustments, and consideration be given to whether a special fund ought not to be set up for prospective Member States to coordinate all financial assistance to them during the pre- accession period and render accession far simpler,

Codecision for the European Parliament

AV. whereas the draft Treaty negotiated by the Heads of State and Government in Amsterdam allows the European Parliament a right of codecision only for the implementing regulation on the European Social Fund and not for the framework and coordinating regulations, to which the assent procedure applies (Article 130d of the EC Treaty),

Horizontal and regional support

1. Has become convinced that, in view of the risk to social cohesion in both its regional and vertical dimensions, the dual intervention structure of the Social Fund - i.e. the targeting of both horizontal and regional objectives - should be retained even after the end of the current support period and that in the future too the horizontal objectives of the ESF must be pursued in the regional objective zones (alongside regional objectives);

2. Favours a drastic reduction in the objectives of the Structural Funds and the Community initiatives;

3. Calls for the two horizontal Objectives 3 and 4 to be combined into a single objective;

4. Supports the view that only one Community initiative should be retained for human resources support and that the measures financed by NOW, Horizon, Integra and Youthstart should be continued in the framework of this new Community initiative, which should be supplemented by measures to combat discrimination on the labour market and at the workplace in accordance with Article 13 of the EC Treaty as amended by the Amsterdam Treaty, in order to promote equality of opportunity;

5. Requests that adequate resources should also be made available from the Social Fund in the context of all other Community initiatives (e.g. for the benefit of border regions or regions undergoing economic restructuring);

Extension of measures eligible for support

6. Considers it necessary that a wide spectrum of measures eligible for support should be incorporated in the Social Fund regulation with a view to dealing with the variety of problems in the Member States;

7. Is convinced, in view of the high level of unemployment in certain population categories, that the current measures eligible for support under the Social Fund (Objective 3) in favour of the young unemployed, women, the long-term unemployed, the disabled and the socially excluded, should be retained;

8. Considers it essential to step up the preventive employment policy which has been embarked upon with Objective 4 and the Community's ADAPT initiative, gradually adopting more preventive measures (under Objective 4) so as to prevent Member States from resorting exclusively to the traditional remedial action, considers that industry too must shoulder its financial responsibilities and advocates greater involvement of representatives of the two sides of industry;

9. Calls for the innovative and transnational measures under the Community initiative to be retained;

10. Further calls for the innovative nature of ESF intervention to be strengthened overall and for the support measures to be extended to embrace new spheres of action, including in particular the following measures and objectives:

- support for further post-diploma or post-graduate education to tackle the consequences of the gulf between supply and demand in the field of qualifications on the labour market; this should be achieved in cooperation between universities, the two sides of industry and the Member States' authorities,

- promotion of local employment initiatives,

- support for the development of new models for the organization of working time,

- support for measures which open up opportunities in the 'third sector¨, such as social, cultural and environmental services,

- support for the establishment, adaptation and further development of vocational training systems, particularly in the form of life-long learning,

- stepping up on-the-job retraining, particularly for workers with a low level of qualifications,

- promotion of retraining and vocational reorientation of workers over the age of 45, who are at particular risk of long-term unemployment, and measures to maintain their employability,

- flanking measures which promote the mainstreaming of Social Fund initiatives in favour of women, such as child and dependant relative care,

- support for opportunities to obtain environmental protection qualifications which may offer a good chance of employment,

- fixed-term accompanying social education measures which will serve, after starting work, to consolidate the reintegration into working life of the long-term unemployed, women, the young, the disabled and the socially disadvantaged,

- accompanying measures which support the reintegration into the labour market of certain workers at risk of social exclusion, e.g. vocational counselling and guidance and measures to combat illiteracy,

- special measures to make it easier for the disabled to participate in all measures supported by the Social Fund,

- measures for the qualification of those setting up businesses;

11. Calls in particular for encouragement to be given to measures to improve the opportunities for women to participate in all manner of initiatives (mainstreaming), including care of dependants and positive discrimination measures;

12. Calls for the retention of the principle that equality for men and women is a Community employment objective to which structural policy measures must contribute, and for effective checks to ensure that it is complied with;

Allocation of appropriations

13. Calls for the appropriations released to the Structural Funds to be allocated among the funds initially in accordance with the political priorities of the Community, and for the special role of the Social Fund in promoting social cohesion - and the political priority accorded by the Community to promoting employment - to be reflected in a correspondingly high level of funding;

14. Calls for the allocation of appropriations from the Social Fund to the Member States and regions in the light of their needs based on objective criteria (per capita GDP, rate of unemployment, the number of unemployed people, unemployment in target groups, distribution of income, etc.) to take place only after the structural fund appropriations have been allocated to the individual funds;

Reserve and incentive scheme

15. Regards the creation of a reserve amounting to 5% of the Social Fund appropriations as an appropriate instrument to cope, at the funding allocation stage, with any changes to the problem areas which the Social Fund is intended to combat;

16. Proposes that this reserve be used as an incentive to use appropriations efficiently by allocating it for the last three years of the programming period (2005-2007), and having regard to changes in the problem areas to be tackled, as a reward for those Member States and regions which have made the best use of the Social Fund appropriations made available to them in the first three years of the programme, considering as a criterion for allocation not only the level of commitment of funds but also the quality of measures;

Reallocation of unused appropriations

17. Proposes that in the review of the regulation the necessary precautions should be taken to enable the Commission, as soon as it becomes apparent that the appropriations made available to a Member State or a region cannot be fully committed during the year for which they are intended, to agree with the competent authorities in the Member States in question on measures to remedy the situation, which must then be implemented before the allocation of further appropriations;

18. Calls on the Commission, should an investigation after the third year of the programming period (2002) and a further investigation after the sixth programming year (2005) reveal that the measures agreed on have not led to the 100% commitment of funds, to make the unused appropriations available for other regions of the same State and, subsequently, of other Member States, the recipient countries and regions to be chosen on the grounds both of the high level of commitment appropriations and of the high quality of the measures carried through;

19. Proposes that the Commission allocate these retrieved appropriations for exemplary measures which it considers should be disseminated or repeated in the same or another Member State;

20. Regards it as desirable for the Social Fund intervention level in such cases to be raised to 90% in the most disadvantaged regions with a GDP per capita of below 75% of the EU average and to 70% in the rest of the Community in order to permit these additional appropriations to be used rapidly without financially overstretching the other partner, and to demonstrate that these measures are by way of a reward;

Partnership

21. Advocates a drastic simplification of the programme planning procedure;

22. Calls for the Commission to be given a greater say in defining the objectives pursued with Social Fund interventions, and, in return, for more scope to be given to the Member States, regions and local authorities in implementing concrete measures, in accordance with the subsidiarity principle;

23. Calls for the social partners to be involved in negotiating the intervention framework between the Commission and the authorities responsible in the Member States and for representatives of non-governmental organizations and other groups in society to be involved in implementation and evaluation;

24. Proposes that the Commission, in negotiating the intervention framework, devise quantitative and qualitative objectives jointly with national, regional and local level authorities, leaving it up to these authorities in the Member States, regions and local areas to select the measures eligible for support under the Social Fund regulation which will contribute to achieving the objectives agreed with the Commission;

25. Calls, in the context of these negotiations, for common evaluation criteria to be devised and set so as to permit checks to be carried out on the agreed objectives; in this connection the Commission must ensure comparability at European level; requests that the Member States should be obliged to set up appropriate evaluation systems for this purpose;

26. Urges that the Commission, in the negotiations on the relevant proposals from the Member States, be empowered to set an amount of up to 40% of the available Social Fund appropriations for interventions aimed at achieving specific objectives or measures to aid particular target groups, in order, if necessary, to compensate for any imbalances between the various target groups and objectives in the programming of the Member States;

27. Calls for integrated programme planning in multifund programmes to be consistently pursued;

Simplification of administration

28. Considers that the existing problems with the implementation of Social Fund interventions arise mainly from administrative procedures and lie mainly with the Member States;

29. Considers that the administrative provisions of the Structural Funds must be harmonized, although the independence of the Social Fund must be preserved;

30. Also takes the view that there should be a corresponding harmonization of national administrative procedures;

31. Considers that the planning and authorization procedure must be simplified by increasing the use of uniform programme planning documents instead of the separate planning and authorization of Community support frameworks and operational programmes;

32. Considers it essential to speed up the transfer of Social Fund appropriations to the end-recipient so that they arrive within the payment deadline of three months set out in the regulation;

33. Proposes, in the interest of speeding up payments, that the arrangements be made more precise, by stipulating that every intermediate administrative office must have transferred the Social Fund appropriations onward within 14 days;

34. Urges, in the interest of simplifying the administration of appropriations, that consideration be given to introducing annual tranches in place of payment in three instalments and that the utilization of ESF funds be improved by means of agreements with the Member States on the chain of payments;

Additionality

35. Considers that national expenditure on a strategic social and employment policy must not fall victim to the universal efforts to achieve budget savings;

36. Calls therefore for the principle of additionality of funds to be more precisely defined and more strictly checked, and, where appropriate, for payment of Social Fund interventions to be suspended if this principle is not complied with;

37. Calls for co-financing to be maintained and for the Member States to be allowed to decide themselves how they will raise the requisite funds for co- financing; in this connection contributions from the regions or from the private sector should also be deemed to be co-financing, as should the providing, free of charge, of premises for the implementation of ESF measures, provided that the latter are defined in unambiguous terms in the planning document;

European employment strategy

38. Calls for the experience gained in implementing Social Fund interventions to be included in the European Council's deliberations on the Council and Commission annual reports on employment provided for in the employment chapter of the Treaty of Amsterdam, and for Social Fund interventions to be coordinated with employment policy guidelines;

Enlargement

39. Considers that the accession of the Central and Eastern European countries calls for their gradual inclusion in EU structural support, which implies a need for human resources support measures in accordance with the measures promoted by the Social Fund within the Community;

40. Therefore advocates that resources be stepped up accordingly;

Entry into force/transitional year

41. Calls on the Commission and Council to do everything in their power to ensure that the revised structural fund regulations enter into force on time;

42. Calls, should the Structural Fund regulations be adopted after 1 January 1999, for existing support to be continued for a transitional year in order to ensure a smooth transition from the current support period to the following one;

43. Instructs its President to forward this resolution to the Council, the Commission, the Economic and Social Committee, the Committee of the Regions and the governments and parliaments of the Member States.