Select Committee on Work and Pensions Minutes of Evidence

Examination of Witnesses (Questions 160 - 176)



  Q160  Chairman: You would expect them to be rigorous, so that is not a complaint?

  Ms Flanagan: It goes with the territory, with European funding.

  Q161  Chairman: That is helpful. A final question from me now. What quality of consultation was there in the creation of the co-financing organisations, were you given a fair crack of the whip at saying how they should be brought into being and what their identities should be?

  Mr Phillips: We were in regular contact with Ken Lambert in the Department, who was one of the chief architects of the programme, and we made lots of points, which are reflected in the documentation but not necessarily worked out in practice. We were also invited onto the Fraser associates review of co-financing. I have been going along to those meetings, and we have been able to put our points there. In London, we have been invited by the Government Office to go in on some of the visitations that were made when applications were made, and we have helped the London and European Programmes Committee, as a member, to exercise some sort of oversight of what is going on. So we have been involved to a considerable degree, but there is a sense in which it was looking at points of detail rather than points of principle.

  Q162  Chairman: Not to any great effect?

  Mr Phillips: A limited effect.

  Ms Flanagan: No; our importance is nothing like as meaningful as it has been previously.

  Chairman: That answers the question; that is a fair and accurate and helpful answer.

  Q163  Mr Stewart: I would like to ask a few questions about the future. As you know, the current programme finishes in 2006, and the centre of gravity obviously will be going eastwards, with the ten new accession countries. What strategy does the voluntary sector have to deal with this major loss of ESF indeed across the whole of the UK?

  Ms Flanagan: Some of the voluntary sector will have welcomed the opportunity to get closer to the statutory funding programmes, and perhaps even by their involvement with statutory funding through co-finance rendered sensitive the statutory programmes to be able to better address the needs that they are working with; so that would be one sort of exit strategy. There is another question around post-2006 which we talked earlier about, the proportion of the funds that could be used for the inclusion agenda, and one of the projects that we are working on is looking at earmarking in the Structural Funds particular funds for inclusion and developing civic society allied to the new treaty that is coming out, with references to the need for a European-wide approach to developing civic society. But I could not give you an answer which covered all of the range of the perspectives in the voluntary sector and its exit strategies; that is just a couple.

  Mr Phillips: I think enlargement poses a very big challenge for Europe, and it is one that, as an active member of the Union, we should take on with both hands; I noticed, in the evidence submitted to you by the Commission at one of your earlier hearings, that one has to realise the Structural Funds are a bond for the whole Union, and everybody buys into that and everybody is looking for support, as a common membership organisation. My regret is very much that in the Green Paper that came out on the future of regional policy there was actually no reference whatsoever to the social inclusion agenda, and at meetings that have taken place on that there have been apologies for that not being mentioned. I think that, in a 100-page document, it is more than an apology that is needed not to have mentioned the social inclusion agenda. Then to turn and say that the Commission is not radical enough; and, going back to some of the earlier discussions we have had, no reference at all to the Frameworks for Regional Employment and Skills Action, which are key to so much of the work going on between sectors at a regional level. So one wonders where a lot of the vision is, in terms of the future, on the governmental side; on the voluntary sector side, I think it is a real challenge, because, as we said earlier, we have never had a big stake in the capital investment that goes on through the Structural Funds. We are minor players there, if players at all, where the main contribution has been in the revenue side, the human resources side. Essentially what is happening with the Structural Funds is that they are homing in on social inclusion and the issues of inequality, and the fact of the matter is that we have become a prosperous but more unequal society, and there are major issues there that we have got to tackle. We would see the sector making a major contribution in delivering on that equalising agenda, and we would expect the Structural Funds to come in, across Europe, to address this particular agenda.

  Ms Love: In Scotland, SCVO have been looking again at trying to see if the services can actually be delivered in line and along with public services, on some sort of commercial basis; and they are also undertaking a survey to find out exactly how many people, as in real jobs, in the voluntary sector, are directly involved with ESF funds. The mid-term evaluation that has been carried out, only some of the drafts are available; the monitors who came in from the independent consultants, from the ones that have been made available, have stressed that most of the projects would not have run had they not had ESF. So there does appear to be real additionality there. The other part of the thing is this, when you do your applications in Scotland there is already an emphasis on seeing in your application how this is transitional and what your exit strategy is and how you will actually move through ESF, if it is no longer available.

  Ms Turner: From the point of view of the service provider, already we are worrying about exit strategies, projects are ending in June and December and, as I said before, we have people in projects sitting there wondering what is going to happen after that. We can only hope that the problems that we had with co-financing are problems of implementation, that is being ruled out very quickly without perhaps thinking about what the consequences would have been for certain sectors, and we hope that these will be addressed, and that the work that the voluntary sector is doing with certain groups will be able to continue, perhaps in a different way. If there is no ESF to be had, obviously, certain projects will exist, but not providing the added value that ESF can provide.

  Q164  Mr Stewart: Do you think there is an understanding in the voluntary sector, at the coalface, among ordinary workers in the voluntary sector across the UK, that there is going to be a big bang, post-2006, in terms of loss of funding?

  Ms Flanagan: I think, in the organisations that we are close to, there is a raising awareness, yes, absolutely.

  Q165  Mr Stewart: As you will be aware, the Government has got a consultation out on the future, and what they are looking at, as I understand it, is really a repatriation of Structural Funds and regional policy. What is your view of the opportunities and threats posed by the Government draft policy?

  Ms Flanagan: I think Ray addressed some of these points in what he was saying in the last few minutes about the use of the Structural Funds after 2006. One of the things that is extraordinary about European funding is that it is very long term, if you consider that programmes run for seven years, more than the Government's term of office, there is a kind of determination and objectivity about European programmes which means that they are not the property of particular administrations, which I think is helpful and useful. And certainly the loss of that kind of independence, as well as the loss of that social glue which we have across Europe, as a result of the cohesion funds and the social funds, from our perspective, and I speak as a committed European, would be irreplaceable. In terms of the repatriation of the funds, I think that, again, is a difficult question for the voluntary and community sector, who will be subject to Government Office, regions, different layers of analysis of the needs of regions, as to whether or not that would be very disadvantageous. I think I am struggling a bit with that one, but, generally speaking, I think we would be very unhappy about the loss of funds.

  Mr Phillips: As a consortium and voluntary sector umbrella group we are in contact with about 2,500 organisations that regularly get our newsletters and mailings, and we work very closely with the regional public authorities in presenting the case for London, which one of your Members, Karen Buck, took into the House just a couple of weeks ago. And, in that, we found common understanding with local authority, regional and borough level partners about the importance of the Structural Funds in addressing the urban agenda, and the value that the Funds have brought to London, as a city—it is very often the tale of two cities, because there are two cities in London. We are conscious of the fact that the Structural Funds have provided a focus for a lot of very important regional work, for decades now, and that important momentum is worth keeping. We like the open contact, as a partnership, with the European Union, rather than a role that would be, in a sense, diluted somewhat in the repatriation, renationalisation models that are being posited at the moment.

  Q166  Mr Stewart: Ms Love, do you have anything to add?

  Ms Love: Yes. I think on the ground the local partnerships work really well, so you have local authorities and Scottish Enterprise or HIE (Highlands and Islands Enterprise) and voluntary associations who all come together round the table to discuss things that perhaps would never actually be discussed at that kind of working level in any other forum.

  Ms Turner: I can only support what the others have said so far, and certainly the worry that perhaps the repatriation of Structural Funds will result in the diluting of a European dimension for this country. I am not sure whether that would include community initiatives, which certainly encourage some work, and the voluntary sector has been very active from this country in working in the emerging voluntary sector in the eastern and central European countries. So I am not sure whether that would be lost as well, it would be a sadness.

  Q167  Mr Stewart: Ms Flanagan, you made the point that the advantage of ESF is that it is very important to skill development, and that it is very necessary to train our workforce in some skills. There are, of course, great opportunities for the ten accession countries, and there will be great export opportunities for the UK to these countries. Are you aware, in the voluntary sector, anywhere in the UK, of where there can be training and development of the skills necessary to export to this tremendous new market that is coming on stream shortly, using ESF?

  Ms Flanagan: Are you talking about developing the skills, for instance, with industry that would export, or are you talking about exporting the skills?

  Q168  Mr Stewart: Yes; generally building up the skills that are necessary to export other people's skills, or products, to the ten accession countries?

  Ms Flanagan: I think it would be interesting to ask that question of the new Sector Skills Councils, the voluntary and community sector does not actually have a Sector Skills Council, sadly, but I think it would be they who would be preoccupied with delineating the kinds of areas that they would want to make that investment, in terms of responding to the increased opportunities available from a broader Union.

  Mr Phillips: Bringing it back specifically to Structural Funds and some of the networking that the voluntary sector is involved in, back in 1989 we were involved in setting up, with the support of the European Commission, the European Anti-Poverty Network (EPAN), which has a Structural Funds working group that we input into. Over the last ten years a lot of our experience has been shared around tables with NGOs across Europe. I think the NGOs have got a very valuable role to play in the dissemination of experience across Europe into the new Member States. Enlargement is one of the big issues in front of EAPN at the moment, and the implications of Structural Funds and how we can use them as a mechanism to transfer some of the very good practice that has been discussed is important. We can be rightly proud that over the years this partnership has been valued and effective.

  Q169  Mr Stewart: Ms Love, do you have any experience, in the Scottish context?

  Ms Love: We have already had people across visiting us from Hungary who we are involved with, visiting both the PME and the voluntary sector, and the local council and the health board, and they had come over specifically to see if people from a small area, rather than a sort of larger area, would be able to help them with establishing their own programme complement, and how they could probably administer their own funds.

  Q170  Mr Stewart: In terms of modelling with best practice?

  Ms Love: Yes.

  Ms Flanagan: The best advice I have given at the moment though is, it is very early in those countries' development for us to be working with them that closely.

  Ms Turner: We had a few examples of partner organisations in Central and Eastern Europe, where their voluntary sector is coming along very strongly, and the governments themselves are very interested that the voluntary sector develops, where they looked at us for provision of training for trainers, or development of skills in terms of volunteer management, how to set up a volunteer centre, and things like that. So that is happening already in a small way.

  Mr Stewart: Thank you very much.

  Q171  Chairman: Ms Love, just a parochial question, finally, from me, and you may not know the answer to this. Do you get any sense that there is a move in Scotland, and for all I know in Wales, to think about following our sister organisations south of the border, in terms of developing a system of co-financing rather than staying with the one that we have got?

  Ms Love: Not at the moment. I said, there are certain things, like there is a global grant for going through Objective 3, which is 1% of Objective 3 funding, which is £4 million, which is co-financed, and it is actually administered by SCVO. So at the moment you have got something like 124 small voluntary organisations in Scotland who are drawing down just about £1 million in direct grants, mostly for capacity-building. Again, in the Highlands and Islands Special Transitional Programme area you have got CED[31] fund, which are co-financed, so that the individual gets 100%, and a pound of that is public and a pound of that is ESF CED, or ERDF CED. So there are examples of co-financing; it is not that it is not done, but it is done in a smaller way.

  Q172  Chairman: But there is no sense of a strategic move to the system, because we think it is better for us north of the border; is that the view of the voluntary sector?

  Ms Love: North of the border, there is no sense in moving to co-finance.

  Q173  Chairman: Are you confident, and again you might not know the answer to this, that, nevertheless, we will be able to access and spend and commit all of the funds that we are entitled to?

  Ms Love: I think we are at N+3 already in some ESF areas.

  Q174  Chairman: So there is no danger of an underspend, as far as you are aware?

  Ms Love: With ESF, I do not think there is any danger of an underspend.

  Q175  Chairman: If there is an underspend, it will be Objective 2, rather than anything else?

  Ms Love: I do not know so much about Objective 2, but ESF and Objective 3, I think, are both well past their targets.

  Q176  Chairman: That is good to know. Is there anything that you think we have missed out that you would like to leave us with final thoughts of?

  Ms Flanagan: Yes; just one point about the coherence of Government department policy. One of the things that we have been minded to say in our submission is not understanding why, on the one hand, we have the Home Office encouraging the development of capacity-building, and so forth, in the voluntary and community sector, through the cross-cutting review, and future-builders, and so on, and encouraging other Government departments to support that agenda, and then, in other Government departments, like the DWP, a much narrower focus on the achieving of quite precise training and employment outcomes. In the DTI we have seen the social economy transported to social enterprises again, and a narrowing down of that focus, which does not necessarily make it very hospitable to the voluntary and community sector development. We are wondering which Government department we should be believing, in the sense of if it is about building the sector, or if it is about a sharp focus on achieving targets and outcomes, in government programmes.

  Mr Phillips: If I may come back, just very briefly, to the DWP itself, within that Department you have got different teams working on the Social Fund vis-a"-vis the employment agenda and the issue of National Action Plan on Social Inclusion, and the sector really would like to see some "joined-upness" there. And the very useful role of technical assistance in building up what we have been talking about today in the sector, that sort of technical assistance role needs to be taken across into the work that is going on around the Social Inclusion Action Plan. I know those discussions are going on at the moment, and I know that when you put this issue of technical assistance to some officials in the DWP they just do not know what you are talking about, and it seems crazy.

  Chairman: Ladies and gentlemen, that has been really very useful for us. I think you have given us a lot to think about, and we will get a chance to pose some of these questions directly to the Minister and his team of advisers when he comes, and I hope we will get some sensible answers which lead to positive recommendations that try to help and assist with the valuable work that you continue to do, day in and day out, on our behalf, and thank you very much for that. Thank you very much for your appearance.

31   Community Economic Development. Back

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