Memorandum submitted by Community Service
Volunteers CSV (ESF 18)
CSV is a national charity using ESF
funds for over 20 years providing training and advice to over
CSV is an active member of the Third
Sector European Network whose chairperson is the CSV Director
of European and Statutory Resources. She sits on the English Monitoring
Committee, administered by the DWP.
Previously relations with the DfEE
were felt to be very positive.
The major change in the administration
of ESF is the introduction of Cofinance.
CSV found the consultation on Cofinance
limited and meaningless.
Cofinance is itself perceived to
be unhelpful for those working with the hard to help, in particular
those working with people with disabilities and capacity building
CSV believes it may be the case that
FE Colleges and schools are being funded to work with groups who
have extensive support needs because they are perceived to be
in need of funds or known to CFOs.
CSV has concerns about shrinkage
of the programme and loss of resources for those furthest from
the labour market.
CSV has concerns about accountability.
CSV believes the introduction of
Cofinance runs counter to the government's policies on promoting
active communities, promoting inclusion and developing the VCS
as service providers.
1.1 CSV is a national agency operating across
the UK in the fields of volunteering, training and regeneration.
It has a turnover of approximately £28 million employs over
450 staff and runs some 300 projects. CSV uses European funding
(Objective 3) in all nine English Government office regions, outwith
the Objective 1 areas.
1.2 In 2002 CSV provided training and information
and training advice to over 30,000 individuals using some £3
million from the European Social Fund.
1.3 CSV has been accessing European Social
Funds since the early 80s and is one of the limited number of
organisations employing specialist staff to monitor the use of
it's European funding.
1.4 In the time CSV has been using these
funds the Department of Employment, the DfEE, the DfES and now
the DWP have variously administered them. CSV accessed funds when
they were dispersed on a sectoral basis through NCVO and subsequently
through the Government Offices following regionalisation in 1998.
1.5 CSV is an active member of the Third
Sector European network, TSEN is a group comprising the regional
voluntary sector support agencies for providers using ESF funding
in England and a number of national agencies with a constituency
of approximately 20,000 providers.
2. POSITIVE EXPERIENCES
2.1 The administration of Objective 3 funds
by the DfEE and the development of Agenda 2000 was a model of
good practice in engaging the voluntary and community sector that
was the envy of other European member states.
2.2 CSV as part of the VCS was able to participate
in the design of the current programme agenda 2000 through a thoroughgoing
consultation process. This included contributing to the identified
priorities of the English Operational Programme, design of core
selection criteria, allocation of funds (to a limited extent)
and aspects of the programme's management including the retention
of advance payments which ensured that the VCS which has operated
substantially in the parts of the programme designed for the disadvantaged,
was able to continue providing for the hard to help; those groups
who have not traditionally been able to access government programmes.
2.3 CSV, as part of the VCS was able to
transmit to the DfEE in the year 2000 that a delay in implementing
the new Objective 3 programme due to protracted negotiations with
the European Commission would have dire consequences for the VCS
infrastructure of projects working in training and regeneration.
The department was sensitive to the predicament of the VCS and
introduced the Gap Guarantee Fund to support the VCS through 6
months of uncertainty while the programme's introduction was delayed.
As a result the infrastructure remained in place
and many VCS providers were able to undertake training and regeneration
activities in the new programme.
CSV like much of the VCS works with the hard
to help, people who will not readily translate into hard outcomes
such as jobs or higher-level qualifications such as NVQ3 and the
needs of these groups were reflected in the subsequent design
of particularly Policy Field 2Equal opportunities for all
and promoting social inclusion of the new programme.
3. CHANGES IN
Under the aegis of the DWP the administration
of ESF Objective 3 has shifted dramatically in the last two years
with the introduction of Cofinance.
4.1 Cofinance is an integrated system whereby
European funds are matched with mainstream government programmes
or other regeneration funds to enable the training provider to
access one stream of funding.
The provider is no longer required to find match
funding (55% of the project value) their project is funded 100%
by the Cofinancing Organisation. The scheme was first introduced
in Learning to Succeed as part of the strategy for post 16 funding,
the consultation that followed was piecemeal and ill organised.
4.2 Whilst the DWP invited the VCS representatives
to contribute to the Cofinance Project Board it was clear that
little attention would be paid to the concerns expressed by the
VCS. Concerns about the narrowing of the programme, the loss of
match funding and regional partnerships, additionality and the
social justice focus of the programme were marginalised as narrow
Although we were involved in substantial consultation
about the European Social fund-Cofinancing Consolidate Guidance
for CFOs with the Cofinance Project Leader, and a number of significant
amendments were promised such as the need for CFOs to make advances
to projects, projects being able to retain Match Funding in cash
and in kind thereby lengthening their project, in the event some
were not made and others CFO choose to ignore.
4.3 Cofinance was introduced in 2001, at
that time CSV ran seventeen projects in 8 Government regions,
25% of these projects were for people with disabilities, 20% for
young people at risk of offending and out of school, 20% were
for refugees. The remaining 35% were media training projects for
women and people from ethnic minorities who are underrepresented
in the media.
4.4 In 2003 CSV runs eleven projects in
4 regions directly funded by Government Offices and three national
projects. Four of CSV's projects are funded by an LSC; sixteen
project bids made to CFOs were rejected.
CSV has been a very active member of TSEN (The
Third Sector European Network) and tried to engage with the DWP
on the unforeseen consequences of introducing co finance for its
projects working with the hard to help.
CSV PROJECTS WORKING
5.1 It became apparent in 2002 when many
Government Offices were moving towards dispersing substantial
amounts of funding through Cofinance that the coverage afforded
by Cofinance plans across the nine regions would be piecemeal,
this gave us cause for concern since few of the early CFOs and
indeed to the present day, are interested in providing for those
with disabilities. In those areas where we were providing projects
for people with disabilities GONE and GOSW the Learning and Skills
Councils and Job Centre + did not submit activities for this group
as part of their Cofinance Plan or indeed their prospectus.
5.2 In the Northeast the GO has allowed
some direct bidding which means CSV is still able to provide for
this group for the time being and similarly in the Southwest direct
bidding is being allowed for this group however since it is the
intention of all GOs to move to virtually 100% Cofinacing from
April 2003 we are very concerned about the future of these projects.
5.3 As a general point CSV projects along
with many VCS projects are subject to the vagaries of CFO agendas
in terms of geographical coverage and extremely precise targeting.
Many CFOs exhibit little interest in providing support for those
working with the disabled, virtually none of those in regions
where CSV operates are providing support for capacity building
measures or anti discrimination measures. There are clearly geographical
inequalities under the Cofinance system, in some cases targeting
is so precise as to be exclusive rather than promoting social
inclusion. E.g. the LSC for Tees Valley operating in Policy field
2 is only proposing to support projects working with seventeen
year olds in their last year at school undertaking GCSEs. Job
Centre+ in the Northeast does not operate in Policy Field 2
thus CSV projects wishing to provide for anyone but 17 year olds
are precluded from applying for European funds that in the case
of Tees Valley were used to great purpose in the past for capacity
5.4 A similar picture of CFOs picking and
choosing areas of training to cover emerges as a pattern in London,
the Southwest and East Midlands and West Midlands. The report
commissioned from Alex Fraser Associates
by the DWP on the implementation of Cofinance in 2002 suggested
there was a tendency for CFOs to be driven by their own priorities
rather than Regional Development Plans, that in the experience
of CSV has been borne out.
5.5 Further, in some areas there is a perception
that work previously undertaken by the VCS, working with the hard
to help is now the subject of ESF Cofinance funding for colleges
through Learning and Skills Councils where the colleges are less
well placed to offer support but perceived as being in need of
6. MATCH FUNDING
6.1 CSV was able to mobilise approximately
£3 million of match funding per annum, some cash match but
also significant amounts of match funding in kind from colleges
and the media as well as volunteer time quantified according to
a DWP schedule. This imaginative measure on the part of the DWP
gave CSV projects the opportunity to access European funds for
projects that had an abundance of good will and active citizens
but limited cash income.
6.2 The introduction of Cofinace is resulting
in actual shrinkage of the available funding since Co financed
projects are funded for the most part with 100% ESF funds matched
against existing activities. Three unintended consequences arise.
The European funding will support
fewer projects over a shorter period.
Funds that were drawn into an area
such as Community Fund and other monies may now go elsewhere.
The additionality of the programme
is hard to evidence since the criteria governing successful Co
financed projects are those of government programmes.
7.1 CSV has been using ESF funds for over
twenty years, during this time we have paid close attention to
monitoring the use of those funds and the eligible activities
undertaken with them.
7.2 We have a very real concern that the
position in relation to Cofinance in terms of liability is still
unclear. We have been told by the DWP that with the introduction
of Cofinance the CFO will become the "end beneficiary"
that is to say projects will no longer be liable to repay any
monies used for ineligible activity in the event of an audit discovering
such activities. Evidence of eligible expenditure, auditing and
recording of time spent on projects will not be necessary.
It is relatively easy in ESF terms to apply funds
to activities which are not eligible without being in any way
fraudulent, eg if a project makes a Final Claim for 23 beneficiaries
doing 15,000 hours and the evidence/timesheets for one or a number
of beneficiaries is absent or incomplete then all cost relating
to that/those individuals becomes ineligible and must be repaid.
7.3 However the European commission in agreeing
to Cofinancing retained the right for its auditors to "drill
down" to verify the existence of providers and beneficiaries.
No thorough going guidance in terms of eligible expenditure has
been issued by CFOs to our knowledge and project may be unwittingly
engaging in ineligible activity which may rebound on them at a
date in the future, either in terms of CFOs seeking to recover
lost costs or choosing to no longer work with an agency who may
have caused them to repay funds. The commission latterly clarified
that all records of activity and expenditure on ESF projects need
to be kept until three years after the end of the GB programme,
that is until 2011.
7.4 The keeping of records is not onerous
for our charity as we are obliged to account for our activity
and expenditure according to the SORP II regulations, whilst we
are responsible for our activities we can ensure that information
is kept correctly and is audited, we cannot feel that certainty
about other agencies keeping information for which we may ultimately
8.1 The co-financing proposals as a whole
is removing communities from participation in the framing of solutions
and will fracture partnerships, and reverse the whole process
that Policy Field 2 (over a quarter of the programme) is designed
to address. In addition many millions of pounds worth of activity
at grass roots level may be fragmented by losing the ESF "glue"
that binds it into a coherent response to need.
8.2 This at a time when we understand the
agendas of the UK Government, the European Union and the Commission
are moving towards more work with excluded groups, characterised
by the production of the National Action Plan on Inclusion. The
plan variously commits to mobilise all actors, notably voluntary
and community groups to help promote inclusion and discusses how
the structural funds could be used to promote the inclusion agenda.
8.3 The DWP engagement in the promotion
of active communities has been at best slow, one area where the
department could have made a significant contribution through
the operation of Policy Field 2 is now being actively undermined
by the policy of Co finance.
9.1 European Social funds (Objective 3)
have been an important source of support for CSV developing basic
skills, training and integrating the hard to help in further training
The projects historically funded by ESF were
those for individuals unsuitable for government programmes.
9.2 The introduction of Cofinance whilst
helpful in principle has had a number of unintended consequences
which are undermining local provision for hard to help groups,
the virtual abolition of direct bidding to Government Offices
for ESF means that CSV will no longer be able to provide for these
groups or assist in the development of local community responses
to their problems.
9.3 The only way to ensure that both top
down strategic responses and bottom up local responses continue
to be offered to the most disadvantaged groups and communities
is by retaining a mixed economy in the dispersal of European Social
Fund monies by Government Offices as originally suggested by the
DWP in 2001.
Director of European and Statutory Funding
27 March 2003
9 Analysis of CFO in Northeast coverage undertaken
by TSEN Officer 2003. Back
Implementation of Cofinance, Alex Fraser Associates 2002. Back
Cofinancing: The impact on providers, Ken Lambert ESF News April
Information letter from ESFD March 2003. Back