COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the Fund for European Aid to the Most Deprived
Date: 2012-10-24
Institutions: European Commission
Subjects: administrative check, aid to disadvantaged groups, co-financing, economic and social cohesion, eligibility criteria, fund (EU), operation of the Institutions

EUROPEAN 
COMMISSION 

Brussels, 24.10.2012  
SWD(2012) 351 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document  

Proposal for a  

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  

on the Fund for European Aid to the Most Deprived 

{COM(2012) 617 final} 
{SWD(2012) 350 final} 

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1. 

INTRODUCTION AND PROCEDURAL ISSUES  

In its 2020 Strategy, the European Union has set the objective to reduce by at least 20 million 
the number of people at risk of poverty or social exclusion. Yet poverty and social exclusion 
are  rising  in  many  Member  States,  raising  concerns  over  the  social  consequences  for 
individuals and society at large. In contrast to increasing needs, the willingness and ability of 
Member  States  to  support  those  who  are  at  the  margins  of  our  society  have  in  many  cases 
decreased. Often the European level is argued to be (co-) responsible for these developments. 

The EU's Food Distribution programme for the Most Deprived people (MDP) was created in 
1987 to make a meaningful use of the then agricultural surpluses. With the expected absence 
of  intervention  stocks  or  at  least  high  unpredictability  over  the  period  2011-2020,  the  MDP 
has lost the original rationale and will be discontinued at the end of 2013.  

However, there continues to be a need for material assistance to the most deprived people. In 
its proposal for the next multiannual financial framework the Commission has reflected this 
and  reserved  a  budget  of  2.5  billion  Euro.  The  main  Union's  instrument  to  support 
employability,  fight  poverty  and  promote  inclusion  is  and  will  remain  the  European  Social 
Fund (ESF). Legal analysis showed that a separate instrument is necessary as the ESF legal 
basis  (Art  162  TFEU)  requires  a  sufficiently  close  link  of  the  supported  activities  with 
employment  or  mobility.  This  impact  assessment  examines  the  range  of  interventions  the 
Fund for European Aid to the Most Deprived (FEAD) could support. 

2. 

CONSULTATIONS  

Discussions in Council, Parliament and with civil society and local authorities on the current 
aid for most deprived under the MDP programme provide meaningful insights and ideas for 
the future.  

The  proposed  significant  cut  of  the  support  provided  under  the  MDP  scheme  in  2012 
following  the  General  Court  ruling  of  13  April  2011  led  to  a  large  number  of  negative 
reactions. Many stressed the importance of this support and pleaded for a continuation of the 
scheme at a time that the needs were increasing.  

Large  charities  and  civil  society  organisations  representing  food  banks,  as  well  as 
organisations working with children and homeless people have expressed repeatedly the need 
for support to be provided beyond 2013 and have contacted Member States representatives as 
well as the President of the European Council. Local authorities also support the continuation. 

Two meetings with umbrella associations representing not only the beneficiaries but also the 
actual  end-beneficiaries  were  held  in  order  to  discuss  the  issues.  In  general  the  possible 
broadening of the scope of the instrument beyond food aid, the fact of placing people at the 
centre of the instrument were welcomed but the associations regretted the reduced budget. 

Member States views about such an instrument are divided: seven Member States argue that 
food support is social policy and a national competence. Others argue strongly in support of 
the  scheme  on  social  and  political  grounds.  Thirteen  Member  States  issued  a  statement  in 
December 2011, in which they requested the continuation of the MDP following 2013. The 
European Parliament has repeatedly and across all political groups expressed strong support 
for the continuation of the programme.  

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In  December  2011,  11  umbrella  associations  wrote  to  the  Commissioner  and  the  Director 
General for Employment, Social Affairs and Inclusion asking for progress to be made towards 
an EU Homelessness Strategy. In their 2012 National Reform Programmes at least half of the 
Member  States  have  referred  to  homelessness  as  a  priority  issue  of  their  social  inclusion 
policies.  In  addition,  the  European  Parliament  called  for  an  EU  strategy  on  homelessness  - 
first in a Written Declaration (2010) and then in a resolution (2011). 

The Compact for Growth and Jobs adopted by the European Council on 29 June 2012 notes 
that "in the implementation of the country-specific recommendations, Member States will put 
particular emphasis on … tackling unemployment and addressing the social consequences of 
the  crisis  effectively  […and]  developing  and  implementing  effective  policies  to  combat 
poverty and support vulnerable groups". 

3. 

PROBLEM DEFINITION 

While the proposed instrument is a new one, it is relevant to look at the still existing MDP 
programme  which  is  the  only  European  Union  programme  currently  reaching  directly  the 
most deprived persons in the EU.  

The MDP has never sought to resolve food poverty. Yet, in many cases the MDP represents 
the main source of food aid. During the discussions with the umbrella associations, all insisted 
that the predictability of the European support via the MDP was an essential element for their 
operations. A termination of the MDP without substitution threatens this acquis and could be 
perceived as a demonstration of the lack of interest of the European Union in pressing social 
questions.  

There  is  a  considerable  leverage  effect  as  the  charitable  organisations  involved  provide  the 
bulk of the means for running the food aid distribution and parts of  the food  aid itself. The 
ratio of total resources mobilised to MDP inputs is around 3. 

There is uncertainty as to the exact reach and impact of the programme. However, the existing 
open  approach  to  target  group  definition  is  found  adequate  with  beneficiaries.  In  addition, 
detailed  criteria  would  impose  heavier  administrative  burdens  and  increase  the  cost  of 
assistance as such criteria must be checked.  

Eight  per  cent  of  all  European  citizens  or  about  40  million  live  in  conditions  of  severe 
material deprivation and cannot afford a number of necessities considered essential in 
Europe to live a decent life. Poverty and social exclusion are not uniform across the EU. In 
general, problems are more acute in eastern and southern Member States.  

Besides  aggravating  the  pre-existing  levels  of  poverty  and  social  exclusion,  the  economic 
crisis has also reduced the ability of a number of Member States to sustain social expenditure 
and  investment  at  levels  sufficient  to  reverse  this  negative  trend.  In  the  period  2009-2012, 
social protection benefits in-kind are expected to fall relative to GDP in most Member States. 
Cash social protection benefits should decrease relative to GDP in nearly half of the Member 
States.  

The  inability  to  access  appropriate  quantities  and  quality  of  food,  concerned  8.7%  of  the 
European population in 2010. The number of persons experiencing food deprivation declined 
steadily  until  2009  when  the  trend  inverted.  Social  support  provided  by  Member  States  and 

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regional and local authorities never or rarely focuses specifically on access to food, except for 
subsidies for school canteens, or meals delivered at home to the elderly or disabled.  

A  particularly  severe  form  of  material  deprivation  is  homelessness.  The  extent  of 
homelessness  is  however  difficult  to  quantify  and  data  should  be  improved.  Nevertheless 
estimations  indicate  that  there  lived  4.1  million  people  homeless  in  Europe  in  2009/2010. 
Homelessness  is  increasing.  Even  more  worryingly,  a  new  profile  of  homeless  people  is 
emerging which consists of families with children, young people and people with a migrant 
background.  While  there  are  variations  in  the  roles  of  NGOs  and  the  state  as  providers  of 
services for homeless persons in Europe, the predominant model is that local authorities have 
the main responsibility for enabling and steering such services and NGOs are the main service 
providers, financed to a large extent by municipalities. 

Focusing on developments across Member States the risk of poverty or social exclusion for 
different  age  groups  indicates  that  the  crisis  has  often  over  proportionally  hit  children  and 
young  adults.  5.9  %  of  households  in  the  EU  cannot  afford  new  clothes  for  their  children 
and 4.5% not even two pairs of properly fitting shoes (including a pair of all-weather shoes). 
This  corresponds  to  approximately  6  million  children.  Children  suffering  from  material 
deprivation are less likely than their better-off peers to do well in school, enjoy good health 
and realise their full potential as adult.  

NGOs  and  civil  society  organisations  provide  a  variety  of  support  to  children  also  going 
beyond the provision of food adapted to children's specific needs and health awareness. The 
support is – for instance – related to clothing, recreational and leisure activities (which remain 
a  challenge  for  many  disadvantaged  children  and  are  essential  to  their  development)  or 
parenting  support  (e.g.  awareness  raising,  advice,  sometimes  combined  with  play  activities 
involving children).  

EU action is justified on the grounds of Article 174 (TFEU) which provides for the Union to 
"promote  its  overall  harmonious  development"  and  on  article  175  (TFEU)  which  makes 
provisions for specific actions outside the Structural Funds.  

EU-level action is necessary given the level and nature of poverty and social exclusion in the 
Union,  further  aggravated  by  the  economic  crisis,  and  uncertainty  about  the  ability  of  all 
Member States to sustain social expenditure and investment at levels sufficient to ensure that 
social cohesion does not deteriorate further and that the objectives and targets of the Europe 
2020 strategy are achieved.  

4. 

OBJECTIVES 

The  general  objective  of  the  Fund  for  European  Aid  to  the  Most  Deprived  (FEAD)  is  to 
contribute  to  the  achievement  of  the  poverty  reduction  target  of  the  Europe  2020  strategy 
thereby increasing social cohesion in the European Union. 

The specific objectives are: to alleviate the worst forms of poverty in the European Union and 
to help to coordinate efforts, to develop and introduce instruments to promote social inclusion 
of the most deprived persons.  

Because  the  instrument  is  to  be  implemented  in  shared  management  the  identification  of 
operational  objectives  would  ideally  take  into  account  the  ex-ante  evaluations  of  the 
individual operational programmes. These are yet to be conducted. At the European level the 

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operational objectives, for which the monitoring system will need to provide consistent data 
on the European level are to: 

1. 

2. 

Assist needy people with basic goods;  

To have a multiplier effect of at least 2. The multiplier effect is estimated as the ratio 
of total resources mobilised to the EU resources provided.  

5. 

POLICY OPTIONS 

Common to all options considered is that implementation will be under shared management 
through  operational  programmes.  These  are  proposed  by  the  Member  States,  decided  on  by 
the  Commission  and  last  for  seven  years.  The  Commission  plays  an  information  brokering 
and supervisory role. Actual implementation is done by Managing Authorities. Depending on 
the programmes, the Managing Authorities either organise a central purchase of the material 
assistance goods to be distributed or leave this procurement to the beneficiaries themselves. 
The  options  considered  do  not  differ  in  terms  of  the  allocation  of  resources  to  the  Member 
States. 

The  main  issue  concerns  the  scope  of  the  actions  of  the  new  instrument.  The  options  range 
from essentially a successor instrument to the current MDP dispensing Food Aid (option 1) to 
a  more  fundamental  rethink.  Under  the  Food  Assistance  (option  2),  the  programme  could 
finance a number of measures or services directly related to the delivery of food aid. With a 
broad scope (option 3), food aid would not anymore be the only element but other forms of 
material  assistance  and  corresponding  accompanying  measures  would  be  possible.  These 
would be related to homelessness and child poverty, two areas which play a key role for social 
inclusion and show a clear worsening trend as a result of the crisis. These areas are so far not 
taken up by other community instruments, such as the ESF. Accompanying measures directly 
related  to  the  material  support  provided  would  further  strengthen  integrated  approaches  to 
poverty alleviation and the fight against social exclusion in line with the European platform 
against poverty and social exclusion.  

Making  a  meaningful  use  of  agricultural  surpluses  was  at  the  core  of  the  MDP.  The  use  of 
intervention stocks is discarded from further analysis on the technical grounds that (i) using 
intervention stocks reduces budgetary transparency and encourages to act upon expectations 
about the future development of prices for these agricultural products in a programme aiming 
at  providing  support  to  the  most  deprived  people  within  the  EU;  (ii)  a  regulation  which 
foresees the use of intervention stocks is necessarily more complex; and (iii) the forecasts are 
that the opportunity will not arise anyway due to the expected absence of intervention stocks 
(on balance) in the future. Nevertheless, it may be justified to foresee an optional use.  

The impacts of the different options are presented and compared in the table below. Thereby 
the  operational  objective  to  assist  needy  people  with  basic  goods  is  directly  reflected  in  the 
number of people supported and whether the most urgent needs are actually addressed. The 
operational  objective  of  a  multiplier  of  at  least  2  has  been  translated  into  the  questions 
whether  the  options  manage  to  mobilise  the  resources  and  whether  overall  administrative 
requirements are reasonable.  

The effects on social inclusion and on employment and the labour market refer very much to 
the general objective. It is considered as too ambitious though to claim a strong direct or even 
measurable link between the instrument and these impacts. 

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Table 1. Expected impacts.   

Option 0 – No funding  Option  1  –
Food  aid  only 
(baseline) 

Option  2  – Food 
assistance 

Option  3  – Broad 
scope  

Number 
of 
people supported 

- 

0 

- 

0 

No programme – no 
people supported 

Direct effect 
estimated at 2.1 
million per year

Direct effect 
estimated at 2.13 
million per year 

Direct effect 
estimated at 1.96 
million per year. 
Slightly less than the 
baseline as some of 
the resources 
available are spent on 
accompanying 
measures 

Reaching 
most 
(having 
highest 
value) 

the 
deprived 
the 
added 

Effect  on  social 
inclusion 

- 

- 

0 

0 

0 

+ 

Same 
target  group, 
but  more  effective 
offer 

One problem of 
serious 
deprivation 
(lack of food) is 
no 
addressed, 
guarantee 
that 
this  is  the  most 
urgent need 

+ 

The greater flexibility 
offered should allow a 
targeting better 
matched to the needs 
in each MS/ region 

++ 

The better targeting 
on the most urgent 
needs should increase 
the social inclusion 
effects 

Employment and 
labour market 

?? 

0 

+ 

+ 

The employment and 
labour market effect of 
option 0 depends on the 
use of the money. In case 
the money foreseen for 
this scheme would go to 
the ESF there would 
possibly be a neutral or 
positive employment and 
labour market impact 

? depends on how the 
resources would be 
allocated to other 
programmes but 
probably overall 
negative in comparison 
with the baseline 

Overall 
impact 

social 

Combining food-aid 
with other activation 
measures following a 
chain of support 
might lead more 
efficiently to 
employment 

As compared to 
option 2 some of the 
participants may be 
even further removed 
from the labour 
market (f.i. children). 
However, this could 
be offset by the 
greater flexibility to 
address local 
situations. 

0 

+ 

++ 

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Option 0 – No funding  Option  1  –
Food  aid  only 
(baseline) 

Option  2  – Food 
assistance 

Option  3  – Broad 
scope  

Mobilisation  of 
resources 

 - 

Administrative 
complexity  and 
transparency 

With the discontinuation 
of the programme 
voluntary contributions 
would become more 
difficult 

+ 

No programme – no 
administration (not taking 
into account that without 
the programme these 
people still might need 
support which will be 
more difficult to organise

Overall 
economic impact 

?  

Very much depending on 
the question how these 
people will be supported 
otherwise. 

Environmental 
impacts 

- 

0 

0 

0 

0 

+ 

- 

++ 

-- 

to 

option 

2 
As 
corresponds 
a 
they 
broader  scope 
represent 
increasing 
levels  of  complexity 
management. 
for 
Potential 
overlaps 
with  other  schemes 
notably  the  ESF  also 
increase 

Same consideration as 
for option 2 but with 
possibly greater 
complexity as the 
scope of actions is 
even broader, at least 
if a programme 
chooses to work on 
more than one domain 
only. 

+ 

+ 

++ 

+ 

Legend: baseline 0; - worse than baseline; + better than baseline; -- worse than -; ++ better than + 

On the basis of the experience with the existing support programme one can forecast that this 
programme would allow to help annually around 2 million people depending on the options 
considered.  This  corresponds  to  approximately  5%  of  the  severely  materially  deprived 
population. However the real coverage is likely to be at least twice as big as this estimate does 
not  take  into  account  the  mobilisation  of  additional  resources  from  national  and  private 
sources. These often more than double the total resources available. Moreover, the Severely 
Materially Deprived Persons (SMDP) can only be seen as a very rough proxy for the target 
population. It is used only in the absence of any better one. Only a fraction really qualifies for 
assistance under any of the options considered programme.  

The  social  impact  of  the  FEAD  can  be  expected  to  go  beyond.  By  providing  a  platform 
around which practitioners will be able to exchange information and experiences, it will bring 
significant benefits for many stakeholders in terms of processes. The evidence-based and mid- 
to long-term oriented implementation of the FEAD by means of operational programmes will 
also  encourage  a  dialogue  between  various  stakeholder  groups  and  support  a  strategic 
approach in the future. Improvements of the delivery mechanisms (notably simplification and 
reductions  of  the  administrative  burden)  should  ensure  the  continued  relevance  of  process 

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effects. The FEAD will be an instrument to facilitate a practical dialogue between European 
priorities and social cohesion policies. 

The  environmental  impacts  of  the  FEAD  are  essentially  linked  to  distribution  of  the  goods 
and the reduction of waste. Figures on carbon saving point to an effect in the range of 0.5 to 
1.0 tons CO2 reduction per ton of food. Overall it seems possible to conclude that food aid has 
a positive environmental impact compared to no food aid. The options 1 (food aid only) to 3 
(broad scope) correspond to decreasing volumes of food aid and therefore to decreasing levels 
of  carbon  saving  (from  573  thousand  to  400  thousand  tons).  Making  actions  against  food 
waste  and  encouraging  recycling  eligible  under  the  instrument  in  the  options  2  and  3  may 
compensate in part or in total this effect. While limited, the carbon savings are not negligible.  

Option 3 is the preferred option on the grounds that it will allow the Member States to better 
target  their  interventions  to  their  needs.  Also  the  accompanying  measures  should  ensure  a 
greater sustainability of the results obtained.  

6. 

MONITORING AND EVALUATION 

The programme will be implemented under shared management. Exact targeting and the link 
with  existing  social  support  instruments  will  vary  strongly  between  Member  States. 
Furthermore  the  institutions  actually  receiving  support  rely  to  a  large  extent  on  volunteer 
work  and  donations.  Therefore  putting  heavy  reporting  obligations  on  such  organisations 
should be avoided as much as possible. Still these organisations will need to inform not only 
the Commission about their work but also other donors and the volunteers so to keep up their 
motivation. While identifying a limited number of major lines of activity it should be possible 
to report for each of these lines by a few common input and output indicators on an annual 
basis.  

Such a basic annual reporting will be accompanied by structured surveys at least twice during 
the implementation period. These surveys will aim at: 

1. 

2. 

3. 

providing some insights on the structure of the client population;  

Assessing the importance of the in-kind contributions other than goods; 

Collecting data on the immediate impacts of the aid provided on the persons reached.  

These  surveys  will  form  the  basis  for  the  evaluation  of  the  effectiveness,  efficiency  and 
impact of the operational programmes.  

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