Examination of Witnesses (Questions 130
- 159)
WEDNESDAY 21 MAY 2003
MS TAMARA
FLANAGAN, MS
SANDRA TURNER,
MR RAY
PHILLIPS AND
MS BARBARA
LOVE
Q130 Chairman: Can I immediately
apologise to our second group of witnesses for delaying them.
We have got Ms Tamara Flanagan, who is the Chair of the Third
Sector European Network and Director of the European and Statutory
Funding, of Community Service Volunteers. We have got Ms Sandra
Turner, who is Assistant Director, European Funding, Community
Service Volunteers. Mr Ray Phillips, who is the Director of the
London Voluntary Sector Training Consortium; and Barbara Love,
who is ESF Development Officer, in the Scottish Council for Voluntary
Organisations. You are all very welcome. Ms Flanagan, to make
the best use of the time that we have got together, we have got
one or two areas of questions we would like to run through, but
perhaps you would like to open the proceedings by telling us what
the perspective is from the voluntary sector in relation to ESF
and Structural Funds generally?
Ms Flanagan: I suppose the first
thing to say is that the voluntary and community sector in the
UK is exemplary. You have been to other countries, I know, and
you will know that their voluntary and community sectors have
nothing like the access directly to European Funds that we have.
And that is a tribute to the Department's commitment to partnership
over the years, DfEE and now the DWP, they have taken particular
measures to make sure that the voluntary and community sector
can be fully engaged, and the partnerships in the regions reflect
that also. And it is this partnership then that drove us to make
the submissions to the Select Committee, because it is our perception,
that of TSEN, that the access of the voluntary and community sector
at large is challenged by some of the policy changes that we have
seen in the last year, notably co-finance. I must say, and you
may be surprised to hear the voluntary and community sector speaking
with one voice at this table, that there are voluntary and community
organisations who can well use co-finance, for whom it is an advantage.
Our particular preoccupation is with the hardest to reach, people
with disabilities, it is around community projects and capacity-building
where we perceive that the use of co-finance, with Government
programmes as the main match funding, is not readily accessible
to those particular groups, and that is our particular concern.
A note of caution that I wanted to sound at the beginning of the
proceedings is about figures. I have noticed in evidence from
last week and today that often you are being given figures, and
it is our sense that really it is quite difficult to have reliable
figures at this time because direct bidding in this programme
has just been running until the end of 2002. So when people talk
about "the period" are they referring to a period when
the voluntary and community sector was very heavily involved through
direct bidding, or less involved because more co-finance is being
introduced, what are the comparators? Are they talking about the
whole of the UK, taking your point earlier, England, Scotland
and Wales, or are they talking just about England; and, in terms
of co-financing organisations, are they talking about the 47 Learning
and Skills Councils, who have 47 different ways of doing things,
or Jobcentre Plus, or the Local Development Agencies, such as
here in London, or the Regional Development Agencies in other
regions. We will give you figures too, but just a note of caution,
in terms of the availability of reliable figures, when we discuss
the impact, as we perceive it, on the sector. Just one last thing,
since you asked me to do a bit of a round-up. I think it is fair
to say that the voluntary and community sector has been very,
very heavily involved with ESF. In the last programme, we were
responsible for 35% of the expenditure, and that is because the
voluntary and community sector were driven into the arms of ESF,
as we often say, by the fact that government programmes did not
suit the constituencies with whom we worked, they the programmes
needed to be worked with for long periods, they needed very hard
outcomes, in terms of things like outcome-related funding, and
there were quite narrow perspectives about employment and training
focus for individuals engaged in training programmes. It was European
funding that enabled us to work very successfully with hard to
reach groups, people with mental health problems, people with
disabilities, people in difficult communities. We found this exceptionally
useful, which was why, despite all of the, you might say, arcane
difficulties with ESF, we went wholeheartedly into using it, we
can give you the numbers of projects. But perhaps Ray has something
to add, from a regional perspective, in terms of the overview
here.
Mr Phillips: Thank you, Chair,
and thanks for the invitation to give evidence to you. In the
London context, we are still in the process of putting a full
picture together, and so, in our particular written evidence to
you, we were mindful of the fact that we did not really want to
quote figures too much. We are very much aware, for example, as
you heard from the previous contribution, that 66% of Jobcentre
Plus's returns at the moment are located against the voluntary
sector; what we are not sure about is 60%, of how that configures,
in terms of a voluntary sector contribution, but also, on top
of that, what we are not clear about is, whenever we look at these
percentages, percentages of what. I think the biggest concern
we have got in London and elsewhere is the total visibility of
the programme. We are invited, both my colleague and myself, to
the National Monitoring Committee, and are aware of the fact that
at the minute it is not easy to see the full picture, the 100%
picture, because of IT failures, and I believe they are being
remedied. But, of course, until that comes through and you actually
see the full 100% picture, you cannot be very convinced about
what the ESF programme looks like at the moment. We do know in
London that we are well on line for the N+2 targets, and on many
occasions we have been reminded that that is because of the initial
impact of direct bidding and what it was able to achieve, in the
very difficult, early situations of the programme. One other thing
I would like to mention, and I will come back to, I think, it
is very much a feature of the London discussions and elsewhere,
nationally, we are very, very concerned that in the development
of new procedures we do not lose sight of the social inclusion
agenda, and, I think what we would like to say, in words of very
few syllables, is that there is not enough "joined-upness"
in the way in which the DWP operates across the employment and
social inclusion agendas. We are aware of separate discussions
that go on between the voluntary sector and the employment side
of DWP, of separate discussions that go on with the social inclusion
side, we are aware of the National Action Plan on Social Inclusion,
saying that they want to see the Structural Funds used for social
inclusion, yet we do not get a sense of "joined-upness"
within the Department about this and the need to see more promotion
of the social inclusion agenda. It is this part of the agenda
that we feel is at risk if the small groups and the voluntary
organisations that we work with within the regions get disengaged
from the Fund.
Q131 Chairman: I am very interested
just to follow that. My understanding is that social inclusion
actually is the Office of the Deputy Prime Minister as much as
it is the DWP. I stand to be corrected about that.
Mr Phillips: There is a special
section within the DWP that is in discussion with the voluntary
sector, discussing the National Action Plan on Social Inclusion
(NAPSI). And a lot of the groups that come out of the socially
excluded are asking for resources to develop the work and the
infrastructural support, and there is no obvious, forthcoming
technical assistance model available to them, because it seems
to be a bit of a closed book when you move out of one section
of the DWP into another.
Ms Flanagan: The National Action
Plan on Social Inclusion was actually co-ordinated by a member
of staff from the DWP.
Q132 Chairman: So, if you have identified
the problem, is there an obvious remedy, or does that have to
be in the hands of whatever is happening?
Mr Phillips: We are going to be
meeting, as a sector, with members of the Department, making this
issue clear, that in the context of the National Action Plan on
Social Inclusion you will not deliver the mobilisation of relevant
actors, which is the current, if you like, banner under which
so much of the work on the employment and social inclusion sides
go, and it includes us. You will not get that to happen unless
you offer support out in the field.
Q133 Chairman: I want to come on
to co-financing in just a moment, but is that lack of co-ordination
a product of having changed the system, or does this track all
the way back to the beginning of time, with Social Funds, Structural
Funds, generally?
Mr Phillips: I think there are
all sorts of opportunities available now to Government, with the
DWP, bringing those two agendas together, and in London we had
our London FRESA[30]
launched by Ivan Lewis, and he commented on the capacity of the
Government, with the DWP, to bring those two agendas together.
But our fear is that it is not happening, not in terms of delivery,
and in particular our concern, within the context of the Social
Fund, is that a lot of the groups that we work with on the social
inclusion side of the ESF agenda are being squeezed.
Ms Flanagan: It is fair to say,
when the first National Action Plan on Social Inclusion was written,
it was written rather rapidly, because it was requested by the
European Union very quickly, and much of the implementation that
was described in that National Action Plan on Social Inclusion
was linked to the existing policies already, particularly those
elaborated in "Opportunities for All", which may be
a policy document you are all familiar with. And so there were
not laid down particular ways of financing the implementation
of the NAPSI particularly, although the second one, which is in
the process of being put together, we might well imagine, with
the Lisbon Agenda, which is what Ray is talking about, mobilising
all actors, might well be looking at some resourcing of policy
implementation.
Q134 Chairman: That is something
we will certainly take up with the Minister when we see him; but
you are offering that, it seems to me, in a constructive way.
Mr Phillips: Yes, indeed.
Q135 Chairman: These things are not
easy, and, if people are acting in good faith, sometimes that
can be taken into account. That is very helpful.
Mr Phillips: Absolutely; constructive.
Q136 Chairman: Do you get the sense,
I am beginning to pick up a little bit of a sense, and it is true
of your written evidence, which is also very helpful to have,
that you are being shoe-horned? Some of the work that you would
really, really like to do, left to your own devices, with a small
parcel of money, you could get on with, but you are shoe-horning
your efforts, simply to stay within the rules, and we have all
got to stay within the rules, I think everybody understands that,
and that you might be able to be more effective if you were left
a little bit to your own devices, in terms of the work that you
want to do, particularly with the hardest to help groups; is that
right?
Ms Flanagan: I think, as we said
earlier, that is what characterised our involvement with the programme.
It might be that somebody, in terms of the providers, could give
you a bit of a perspective about the extent to which our projects
no longer fit the bill, particularly with competitive tendering
in some of the co-finance organisations, where we have very narrow
specifications.
Q137 Chairman: Have you got any examples,
Sandra, of projects which you have tried to put into the new system
and had rejected because they do not fit the criteria?
Ms Turner: Since July 2002, when
the biggest direct bidding round came to an end, obviously we
have been looking at the new opportunities that were opening up,
we were not against co-financing, on the contrary, open to it,
and obviously we have been looking for opportunities. I think
the example that is most worrying is about a project based in
Bristol, an example of a café based in the community, in
existence for over 20 years, and a part of the work of the café
has been financed under ESF, and particularly they work with people
with learning disabilities, people who have Down's syndrome. And,
through the help of ESF, these people have the opportunity to
get out of the usual drop-in centre, they actually have the opportunity
to receive meaningful training and put into practice their skills
in a real working environment. Now we have tried the co-financing
options, but, unfortunately, the LSC at that time said to us that
that was a target group that they were not covering. Thankfully
then, in that region, in the South West, there was still direct
bidding, and we were able to prolong the life of this particular
project for another 12 months. Our worry, however, is that, because
co-financing is becoming more and more diffuse and direct bidding
is on the go, after the end of the project, in June, all other
projects which work with similar types of groups, people with
mental health problems, etc., etc., from December 2003, we simply
do not know what is the future of the project, and we could face
a situation where not only projects are closed but doors are closed
to these types of client groups.
Q138 Mr Dismore: Just to pick up
there; what you are telling us now seems to be very different
from what we heard in the previous evidence session. I do not
know if you were here and were listening in, but the impression
we were being given by the Government Office for London representatives
was that these hard to reach groups are still able to access ESF
through the co-funding arrangements, and what you are saying is
that is not correct?
Ms Turner: I am not saying it
is not correct, I do not have the information to tell you whether
it is correct or incorrect, I can only speak from my experience
and the experience of an organisation which has been working with
these groups for over 20 years now. And it seems to me that, all
of a sudden, our options to continue to use ESF to do the work
that we want to do are becoming slimmer and slimmer, and we cannot
quite understand why, because, obviously, we have been funded
for a long time, that means that we have been delivering good
projects, with good outcomes. So that is what I am here to tell
you, that is my experience.
Ms Flanagan: It may be worth adding
that there is segmentation in the market, and one of the things
that we did, in preparation for this meeting, actually, but also
for the mid-term evaluation, was look at the coverage the co-financing
organisations offer in each of the regions; and it is in this
segmentation of different co-finance organisations targeting particular
activities in particular areas, maybe geographical, maybe communities
of interest, maybe skills needs, that these groups which Sandra
is describing fall between. There are whole regions in the analysis
that we sent to you for example not covered in the South West
they have retained direct bidding, which happens to cover this
eventuality, but in London there is no longer direct bidding at
the moment, so that there are people falling between the narrow
specifications of particular co-financers, covering particular
kinds of interests. I think it was in Enfield, I should send you
a note on this, because I do not want to give you incorrect information,
but one of the London analyses showed that there would be no direct
training of beneficiaries at all, only trainers, in that particular
co-finance organisation. So there is this segmentation that we
describe in our submission which gives rise to these gaps, which
could be underpinned by direct bidding.
Mr Phillips: In the original design
and, if you like, in the original prospectus for co-financing,
there was the argument put that there would be a percentage of
the programme reserved for direct bidding, particularly in the
context of a CFO programme not being able to meet all contingencies,
that there were gaps, and I think it was a fairly sensible arrangement
to have a fine-tuning system. We regret, in London, that at the
moment there is not a direct bidding arrangement that can pick
up gaps. What we are grateful for, with the Government Office,
is that we are now mapping to see if there are gaps, but, of course,
the problem is going to be that if we find gaps it is going to
be rather late. But I think the important thing to bear in mind,
in London, we had a European programme that had a well-publicised,
pan-London, regional bidding round, we have now got ten CFOs who
issue prospectuses and tenders. There are all sorts of problems
out in the field now, and if you are seriously suggesting that
it is simpler for a bidder out in the field now in London to access
the Fund, when they have got to look in ten different directions,
ten different timetables, ten different sets of priorities, that
is—
Q139 Mr Dismore: Does that include
the LSCs?
Mr Phillips: There are five LSCs,
we have got Jobcentre Plus, the Association of London Government,
the London Development Agency, Connexions, and also Business Link
for London. We have ten co-financing organisations; it is a logistical
problem, almost, one might say, nightmare, it is not easy, it
is certainly not simple, and I think the issue is how do you get
the delivery to match the ambition. But what we are saying, as
a sector, is that, okay, everybody is taking on the challenge
and moving it forward, but why get rid of the fine-tuning mechanism
that could have been there with a direct bidding round; and it
is not just London. London at the moment has got that situation,
but, as I understand, where the regions are headed, there is going
to be very little room for manoeuvre around a direct bidding fine-tuner.
And I think, in programmatic terms, that is overambitious.
Ms Love: We do not have co-financing
in Scotland, here is a contrast. What we found in Scotland, and
we are completing the figures on this, is that for ESF in the
Objective 3 area 40% of the total grants are awarded to voluntary
sector organisations. They are very successful; in the Highlands
and Islands Special Transitional Area, in their ESF section, 23%
is awarded to voluntary associations. We are completing research
at the moment to show how much of the match funding for that comes
from the types of bodies who would actually co-finance if it were
the same system as in England; and some of the evidence that we
are getting is that the bodies are actually providing their own
money, so the likes of the Scottish Council for Voluntary Organisations
do not need a co-finance match because they are using the ESF
money as additional money.
Q140 Mr Dismore: In the old match-funding
way?
Ms Love: The match funding comes
from their own Association, and ESF is additional.
Q141 Mr Dismore: Yes, that is what
I am saying, an old, traditional match funding?
Ms Love: Yes.
Q142 Mr Dismore: But the message
I am getting from Ray, and I think from the others, is that the
answer to this is probably, if co-funding is the way, to make
sure that you have got a direct bidding safety-net to catch the
things that fall through. To what extent do you think that the
voluntary and community sector are speaking with one voice on
the whole issue of the merits and demerits of co-financing? I
seem to get that impression from you three, but do you think that
is the general view?
Ms Flanagan: Can I say, at the
outset, that there are people who can use co-finance and who find
that welcome; but equally there are a large number of voluntary
and community organisations who were, happy to look for match
funding. In the East Midlands, we found when we did an analysis
of the projects who were using Policy Field 2, which is the inclusion
policy field, that less than 2% of their match funding came from
mainstream programmes, they were using things like the Community
Fund, they were using SRB, they were using trusts and foundations.
And one of the issues that some of our members raise is the shrinkage,
in terms of those funds going to other places, now that they are
not being required to match, or, in their terms maybe, not being
doubled by being attached to ESF.
Q143 Mr Dismore: That is the next
question really. To what extent do you think that the effect of
co-funding has been to increase the overall amount being accessed
by the ESF, or reduce it, compared with the traditional direct
bidding way of doing things?
Ms Flanagan: I am sorry, I do
not quite understand that question.
Q144 Mr Dismore: I think what I am
saying is, one of the criticisms of the old way of doing it was
that not all the money was being spent, effectively, through ESF;
so do you think that the effect of switching to co-funding has
meant that more money is now being accessed through ESF than previously
was the case?
Ms Flanagan: Not by the voluntary
and community sector; certainly more money has been committed,
whether or not it has been spent we are yet to know, we have not
seen the report on that, because large sums have been committed
to Learning and Skills Councils, or other CFOs, to organise the
expenditure. In terms of the access to the funding, the difficulty
is that the mainstream government programmes exist anyway, for
example, Modern Apprenticeships exist, Work-Based Learning for
Adults exists. And, since they add the match to the ESF, the direct
ESF used by a co-financed project will last less long, that is
one of the difficulties, because actually they are using 100%
ESF to run the programme, with the exception of those CFOs who
are able to match with what is called a Local Initiative Fund,
which is a kind of more free pot that some Learning and Skills
Councils certainly have, and there may be examples of that being
used for co-finance. But, by and large, we are actually talking
about a part of the programme which is in situ, and then
the ESF funds being used 100% to run the other part.
Q145 Mr Dismore: But you are not
saying that the effective ESF is simply to be subsumed into existing
programmes?
Ms Flanagan: No.
Mr Phillips: I think also it would
be fair to say that we are looking at exactly what the full picture
is going to be, because at the moment it is not easy to see what
the 100% picture is, we are waiting to get the information out
when the IT is up and running. But, the issue about whether the
voluntary sector speaks with one voice, let us make it clear who
we are. We are regional training networks who work very closely
with Regional Government Offices, and we are funded through technical
assistance; we are in a partnership arrangement to secure the
delivery of the programme. Now it would be fair to say that you
have seen evidence from a number of the Regional Training Networks,
we are provider-based, therefore we are very conscious of the
problems of delivery, we are accountable to delivery agents on
the ground, so we are very, very open to the problems of the slip
between cup and lip, what happens when you actually try to carry
out an ambitious programme on the ground, does it run or does
it fall. These are the concerns that we have got. I mentioned
earlier on the problems of a number of different co-financing
agencies coming together in one region, the lack of what has now
become parlance, the lack of a road map, there needs to be some
sort of guidance at regional level. Now we are working on that
to improve things, but, as I say, we would like to see the option
of direct bidding retained as a fine-tuner. There are other issues,
practical issues, about co-financing that have to be borne in
mind. The value of the previous system, where you could draw in
match funding from a number of different sources, is that, effectively,
you were locking in the programme to a lot of other agencies on
the ground, so that was almost, through the financial mechanism,
some local accountability, instead of money being dropped down
through national programmes, which might not actually correspond
as finely as they might with regional priorities. And that was
very important, so there was a financial accountability that went
out. The other issue is, of course, that the ESF is a difficult
programme to get going, and when you are match funding and you
have got some funding in place, and you are trying to negotiate
the start of a programme, there are delays. We had a 30% upfront
facility, which meant that when the match did come, very often
late, we had a lump of it coming through and we could rely on
the other match that was already running; because of the issues
of timing, that was never entirely satisfactory. But what it has
been replaced with, in some significant cases, is now on long
negotiating periods with CFOs, with no money on the ground whatsoever,
because you are waiting for 100% of the money to come through,
and this actually has caused a lot of pain and a lot of grief
for a lot of organisations, certainly in London. It is attention
to that sort of detail that needs to be borne in mind. If you
look at some of the early guidance that was put down by the DWP,
on the fact that providers should be no worse off than before,
two significant things are missing with the CFO system, as a general
rule, lack of upfront funding as an automatic position, because,
according to the Social Exclusion Unit as well, the voluntary
sector needs upfront funding to survive, because you cannot build
up reserves.
Ms Turner: Can I just add to what
Ray was saying. I think an unhelpful way of paying for projects
from the voluntary and community sector is, I am not sure whether
all of the co-finance organisations have this system in place,
but we certainly know of some that pay projects on delivery of
outputs, so you get a certain amount for starters, you get a certain
amount for completers, and a certain amount for qualifications;
and that is fine, but it is not fine for very disadvantaged groups,
whose progress perhaps could be measured in a different way. There
is no measurement for soft outcomes, that the last direct bidding,
certainly, we got to a stage where the DfEE was working on a tool-kit
and we had some measures of outcomes; what has happened to all
that, it has just simply disappeared.
Mr Phillips: A further important
issue is the lack of appeals systems. We are really very concerned
about the lack of appeals systems. The programme essentially is
a social justice programme, and I know this is a discussion that
went on at the national evaluation of co-financing the first time
round because I was representing the sector on that group. The
concern was, why should you have an appeals system, in the commercial
world you do not appeal against a contract going elsewhere. But
the group had to be reminded that we are talking about a social
justice programme here, and, in that context, there needs to be
a mechanism for reviewing decisions, or, at least, giving a chance
for projects to come through; and that intransigence, that inflexibility,
is one that needs to be attended to. It is not to say that it
cannot be done within co-financing, but in a number of significant
cases, and Jobcentre Plus has been mentioned, that scheme has
not been volunteered, and it does put the field at a considerable
disadvantage.
Q146 Mr Dismore: My last question,
following on from those points, is, do you think that the way
co-financing is working is operating within the EU rules?
Ms Flanagan: The Department have
been at great pains to work with the Commission to ensure that
the situation that they have with co-financing is within the EU
rules, they spent a lot of time talking to the Commission about
what would be a satisfactory system. I think it was part of those
negotiations that actually gave rise to these quite narrow tenders
that we now see when contracts are being let, because in order
for co-financers to take responsibility for the audit of those
who are their providers, and in order for them to secure contract
costs, not just the actual costs spent, it had to be that co-financing
organisations were involved with not grant-giving but contract-letting.
It is the competitive tendering element, which I know was agreed
on the basis that that would suit or would be consistent with
the European Regulations, which has given rise to some very specific
sorts of contracts which, the ones we are seeing, are ending up
being exclusive rather than inclusive. Not to name names, but
there was an example given of a contract let by one Learning and
Skills Council for a specific skill, brick-laying, on a specific
estate in an area, for women, and it was our determination that
if some of the resources of the co-financing organisation are
being used in these very precise ways it does not leave much room
for getting on with helping the most disadvantaged that you said
yourself, Chair, earlier.
Mr Phillips: One of the most difficult
rules is additionality, and I do not think, until we see the whole
100% programme, we will be able to come to firm conclusions about
additionality.
Q147 Mr Goodman: I was going to ask
if you were aware of any particular projects that are losing out
as a result of co-financing, but I think Sandra has already given
a very telling example of that, unless there is anything else
anyone would like to add?
Ms Flanagan: I know there is a
project from the South West that we were asked to mention, which
was described as a flagship project, in terms of working with
people who were being rehabilitated after drug use, and this project,
which featured as one of the examples of best practice which we
showcased at our conference in September, was taking people who
were coming out of rehab. and working closely with them in a pathway,
integrated approach to developing their skills and their ability.
And, I might say, some of them becoming employed by the project
and then moving out into other, not sheltered, employment, genuinely
applying for posts and getting them, and then moving out obviously
into other employment areas. And they were, interestingly, showcased
also in one of the Department's newsletters as a very good example
of how European money was being used to work with excluded groups.
The Regional Director of SAVAGE, who made a submission, mentioned
to us at our last meeting that this project now does not know
how it will be able to continue, because it is not being able
to fit into the criteria delineated locally for ESF-using projects.
Mr Phillips: One of the class
of organisations in the voluntary sector in London that is facing
problems at the moment are what used to be called Sponsored External
Institutions, they had a special relationship with the Further
Education Funding Council, which meant, in effect, that they were
getting grants, a post-box, through the local college, and effectively
they were recognised as being able to run their own programmes.
The current arrangements in London, which are taking them into
mainstream funding, are not recognising the difficulties of those
particular groups, and there are several big ones in London, the
Newham Women's Training and Education Centre, East London Advanced
Technology Training Centre, they are having difficulties picking
up cover for the sorts of accompaniment costs, like childcare
and others, which they cannot claim through the main programme
in London East. And so I think it would be useful to address the
situation facing external institutions, as recognised previously
by the FEFC, in the current regime.
Q148 Mr Goodman: As well as projects
that were inside the rules, as it were, and now are in danger
of falling outside the rules, do you think there are types of
activities, or projects, that should be funded by the ESF and
are not, or types of projects that are funded and should not be?
Ms Flanagan: There is certainly
an area of projects that we have been concerned with and we have
been talking to the Department about, which is the capacity-building
projects, the whole notion that European funding, as it was used
in the previous programme, the famous Priority 4, can be used
to help communities develop their response to their own identified
needs, and, in that, using organisations who may not usually be
engaged in the kind of European-funded activities of employment,
training, careers advice, and so forth. And these kinds of projects
were very successful, quite a number were built up under the last
programme; there was not a specific capacity-building programme
in Agenda 2000 but rather it was mainstreamed into all of the
policy fields, but, in fact, we have seen that the focus on capacity-building
is no longer as sharp as we would like it, and certainly it does
close down this route of communities developing their own responses.
Q149 Mr Goodman: You mentioned discrimination
and work with the disabled particularly in your evidence, did
you, in that regard?
Ms Flanagan: Yes; there are a
number of measures, activities, to combat discrimination, for
instance, which co-financing organisations do not seem to get
much involved with, and working with those with disabilities equally.
In some co-financing organisations, because I do sound that note
of caution, and in London I know, for instance, that co-financing
organisations are quite heavily involved with specific sorts of
groups, refugees, asylum seekers, the disabled, there may be difficulties
around the universality in this, people falling in some places
between stools.
Mr Phillips: Further to that,
we are in discussion with the European ESF Division on this issue
of capacity-building, and in the submission that we are making
we have drawn attention to the conclusion of research commissioned
by the DfEE on the old Objective 3 Priority 4, which did focus
on capacity-building, and their suggestion that they made that
`we feel it should continue as a separate priorital measure'.
And the feeling is that there needs to be some space created for
the issues around capacity-building, particularly in the light
of mobilising communities, the new thrust coming through the employment
guidelines, and also as a bridge across into this social inclusion
agenda and the work that the DWP is doing, wearing another hat,
so to speak, on another side, with the National Action Plan on
Social Inclusion.
Q150 Mrs Humble: Ms Love, earlier
in your evidence, you said that just over 40% of the schemes in
Scotland were delivered through the voluntary and community sector.
Do you think, and I am going to ask everybody else the same question,
that there is an optimum level of work that can be done through
the voluntary sector, and do you think it is going to go up or
down?
Ms Love: I do think there is an
optimum level. If you further analyse these figures, what you
find is something like 50% of the applications come from 19 organisations,
so there is obviously a capacity element, in that there are only
certain organisations in the voluntary sector that feel they are
able to go into the ESF field, either because of the types of
projects that they want to deliver, or because of either the actual
administration or the perception, that maybe the administration
is too onerous for them actually to take on board, and that they
can get money from an alternative source.
Q151 Mrs Humble: In England, because
of the problems that you have outlined with co-financing, I got
the impression from you that you feel that the work of the voluntary
sector is being marginalised. Do you think that there is more
that you could do, or do you think that the level of your input
is going to go down rather than up?
Ms Flanagan: In the last programme
35% of the programme was delivered by the voluntary and community
sector, that is to say, the applicant on the application form,
as we understand it from the Department, was voluntary and community
sector. I think, as Barbara says, there is an optimum point, and
I would not expect us to be delivering the whole programme. But
I suppose one thing that is worth saying, taking Ray's point about
social inclusion, is that the major funds from Europe are actually
all about plant, they are about buildings, they are about building
roads, factories, estates, and so forth; the human resource ones
are actually very, very minor, in terms of the amount of money
that they represent ESF. And the increasing coalition, in the
European Commission's mind anyway, and perhaps in some others,
is about the human resource funds being much more targeted on
these combatting exclusion questions. There is a reality, which
is that many of the voluntary and community sector organisations
are in a good place to respond to that kind of demand; less so,
I would still say, the mainstream government programmes which
require a deal of preparedness already on the part of a trainee
joining a government programme, not least because of the requirement
to have fairly timely solutions, shall I say, and the achievement
of hard outcomes, which are a number of the drivers of those programmes.
I have just come from awarding ceremonies at the Arsenal to young
people who were all part of a young people's work-based training
programme; they do not use any ESF money, they have a great time,
they are doing sports and leisure delivery in that setting, they
are achieving their NVQs, they spend about 18 months in that project,
and that is great, that is a government programme that is working.
But, equally, we have a programme very similar to that, in another
part of London, working with people with quite entrenched difficulties,
who may need to spend two years and not actually achieve NVQ2,
or 3, in that time, and they are the ones who are not going to
suit government programmes.
Q152 Mrs Humble: Following on from
that then, if we were to argue that more ESF funding should be
channelled through the voluntary sector, what arguments would
we use, in what way do you add value, in what way are you doing
something different and better than the statutory sector can do?
Ms Flanagan: I thought that I
had answered that to an extent by talking about reaching the different
groups and being able to provide different sorts of integrated
programmes to bring people from not being the most able and close
to the workforce to being more able and close to the workforce.
I would say, that would be one of our major strengths; although
also helping communities frame their own responses, in terms of
this capacity-building discussion, would also be something that
I would say we are much better placed to do than perhaps mainstream
programmes. But you are going to add something, Ray.
Mr Phillips: Yes. The question
is obviously loaded, when you say different and better, obviously
you are seeking out our value position. A lot of voluntary organisations
are coming out of street-level activity with concerns for particular
disadvantaged groups. ESF has given the voluntary and community
sectors an opportunity to get into dialogue with local training
institutions and establish partnerships, which involve a lot of
local people, and it is this sense of ownership that comes through
the sector. Now this has been seen as complementary to the thrust
of mainstream—ESF work has been described as `non-mainstream'—and,
in that sense, has been very valuable in bolstering and building
up that sort of activity in the community. It is precisely the
agenda that is coming across the Channel, in terms of the new
employment guidelines—the two national action plans on employment
and social inclusion. It is this that we wish to continue to contribute
towards. In a London context, at our optimum level, we used to
contribute about a third; when Agenda 2000 came in there was a
hiatus, because of the changeover from the old TECs to LSCs. Once
these came in, the sector delivered about half of the programme
for that particular bidding round and this has put London in a
good position to reach its N+2 requirements, with the new system
only now bedding in. So, I think, it is important to accept that
the contribution of the voluntary sector is a significant one,
it is not the same as the statutory sector, it complements the
statutory sector, and it makes training sense.
Q153 Mrs Humble: We have been hearing
a lot of contradictory evidence this afternoon, and some of it
has just come out now as well; because, on the one hand, you,
Ray, have just said, in answer to my question, that you feel that
the way that ESF funding is structured is actually encouraging
the voluntary and community sector to get involved, but, on the
other hand, the new co-financing regime seems to be discouraging
involvement, or, at least, putting obstacles in the way. How would
you like to see that problem resolved, or is it a problem?
Mr Phillips: It is a problem and
it is being attended to, there are discussions going on about
how to improve systems, and so forth. I think we have been in
dialogue with the architects of co-financing now for some time,
we have been going along to meetings, pointing out some of the
difficulties, the systemic problems, as we see them, in terms
of upfront funding, appeals systems, building them in. We have
not stopped asking for those things, because we still believe
that the new system is bedding down. ESF has been attractive.
I have been involved with ESF for 20 years, mainly at street level,
and it has been a very good way of opening up discussions between
match funding bodies, local agencies, on the statutory side and
the voluntary sector, and that has been very much valued. And
it is not to say that it is going to go away, but the new systems,
bedding down, teething problems, there are certainly difficulties
of that kind that we are facing at the moment; we are trying to
see through those actually to identify beneath them what are the
systemic problems. And, as I say, returning to an earlier point,
this issue of some residual, direct bidding route, as a fine-tuner,
we feel is essential.
Q154 Mrs Humble: Is part of the systemic
problem actually a possible cultural divide between the way that
the voluntary and community sector works, from that bottom-up
approach, your grass roots work, and Government and the new co-funding
organisations being top-down?
Ms Flanagan: I think somebody
said, in one of the submissions, that strategy is always seen
as top-down, but we think it can also be bottom-up, and that is
a very clear explanation that you have just given, about some
of the difficulties with which we grapple, and, indeed, I might
say, sometimes not only us. An evaluation was done for the Department
by Fraser associates about the implementation of co-finance and
they did remark that even some Government Offices felt that co-financers
may be driven more by their agendas, which may derive from other
places than the local region, than by the regional development
programmes, which, in European terms, are usually the vade-mecum
of the European programme in that area.
Mr Phillips: Just going back to
the cultural divide, I would be much more in favour of talking
about rich mix. In the early documentation about co-financing,
there is this recognition of the need for top-down and bottom-up
to work together, I cannot remember the precise page, but certainly
it is in the early documentation; but, the reality is, it is difficult
at the moment to get that actually to work. This is our preoccupation
at the minute, to try to get that partnership up and running,
with new institutions that are not, in a sense, locally streetwise
yet; in terms of some of the institutions in London, they have
been going around for many, many years, whether as co-financers
or not, but others are very much new kids on the block, and it
is a case of trying to work out that new partnership.
Q155 Mrs Humble: Apart from your
observation about an appeals process, is there any other, specific
request that you could make to us about how to improve that situation,
for us then to consider?
Mr Phillips: Why should voluntary
organisations have to work so hard to get the issue of upfront
funding recognised; it is something that has been recognised elsewhere,
in some of the other government literature about the importance
of upfront funding for the voluntary sector that cash flow activity,
and monthly funding regimes are not what a lot of voluntary organisations
want, quarterly regimes are much more friendly, and that makes
upfront funding also more important. So I think that is an issue
that, for us, has stuck in the throat somewhat, that the European
Commission makes money up front available to national government,
they made the Agenda 2000 regime more friendly by moving money
across to Member States early on as an upfront contribution, I
think the percentage was 7%. But when it comes down to provider
level we cannot get that upfront funding, it has really to be
argued for, and you have to go cap in hand to make the case, and
we are not sure that the case is recognised when it is put.
Ms Love: Can I come in here and
say that, in Scotland, that was a point that was very strongly
argued by the voluntary sector and other sectors, and if you have
an ESF project in Scotland, on the date you begin it you get 30%
up front, then you do quarterly claims and you receive the actual
expenditure about a month after you put in the quarterly claim,
until you reach the 80% limit. So, in actual fact, the cash flow
in Scotland has been greatly improved by the change that they
made when they put in this new system.
Q156 Mrs Humble: But, Tamara and
Ray, are you saying that does not happen in England?
Mr Phillips: We have lost it.
Ms Flanagan: It can happen but
it does not always. This talks to the wide variety of CFO arrangements,
because what Ray was saying earlier about our involvement with
the architects of co-finance is absolutely correct, we were invited
by the Department to sit on all the boards and discuss with the
authors of the handbooks what things would be stipulated; but
it has to be said that the wide variety of CFOs, in different
areas, with different preoccupations, do not observe all of the
things that are in the guide to the running of co-financed projects.
So in some parts of the country that 30% will just not be an automatic
right; in other parts of the country, it might. And the same thing
goes for different sorts of match funding, it actually says in
the co-finance guidance that providers should be allowed to bring
match funding of their own, to enrich a programme; this is not
observed by most co-financing organisations. The use of volunteers,
time, quantified, which is the most brilliant notion thought up
by the DWP a couple of years ago, which enables volunteer organisations
to attract cash to pay for small numbers of staff, or whatever;
it ought to be allowed, according to the guide, it is not, in
some areas, actually in most areas.
Q157 Chairman: One of the things
that the Department told us, and I was interested when, I think,
Ray mentioned it earlier, or maybe it was Tamara, that some of
the stats are still provisional, they said to us that monitoring
of data indicates that 90% of beneficiaries are completing their
courses and three-quarters find work or move into further education
or training; now these are big claims. Do you have any sense that
those figures, given the provisional nature of what we have got
at the moment, in terms of the data, are anything like right?
Ms Flanagan: I am not sure that
we are the people to answer for the whole of the DWP's programme
delivery.
Q158 Chairman: But using your own
experience?
Ms Flanagan: In terms of our sector,
the figures are not that high, but, of course, the ESF programme
is delivered across a range of sectors, and is that referring
to the previous programme which ended in1999?
Q159 Chairman: I do not know, that
was the interesting point that Ray raised with us and we will
need to check that. Okay; so that is a difficult question for
you to answer. Let us just speed on; two quick, very important
but brief responses. Firstly, what is your experience of the assessment
procedures that are visited on you by the monitoring process,
are they overburdensome?
Ms Flanagan: They are rigorous.
30 Frameworks for Employment and Skills Action. Back
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