Select Committee on Work and Pensions Sixth Report


The European Social Fund (ESF), which is one of four European Structural Funds, aims to improve the employability of individuals across the EU, especially those people who have the most difficulties in the labour market. The ESF supports projects that are involved in employment, training and ways of countering social exclusion.

The Department for Work and Pensions has the lead policy responsibility for ESF, although much of the administration of ESF is delegated to Government Offices and devolved bodies.

We have received evidence from a range of witnesses and have visited a number of projects that are currently supported by ESF. We have been impressed by the effort and commitment of all those involved in ESF and especially those people at the frontline involved in supporting vulnerable people .

Throughout this report there are two persistent concerns about ESF. First, we have been struck by the sheer cumulative weight of the bureaucracy associated with the administration of the fund that organisations are expected to shoulder. Second, we recognise that there is a great deal of uncertainty about future funding, particularly after EU enlargement.

As regards excessive bureaucracy, we believe that the administration of ESF represents a significant burden on local authorities, Government Offices and other public and voluntary organisations. The evidence indicates that many organisations, especially those working in the community and voluntary sector, have a problem managing the administrative burdens flowing from applying for funding, making regular claims and monitoring outcomes. We make a number of recommendations which, taken together, should go some way to easing the burden on service providers. In our view there is an opportunity for the Government to weed out some of the management layers and excessive bureaucracy surrounding ESF.

We also assess the new system of co-financing that the DWP has recently introduced, especially the criticisms that it has attracted. We call for better written feedback to be given to applicants.

With respect to uncertainty about future funding, we recognise the reduction in ESF funding which is likely to hit the UK after the current programming period in 2006. This will leave many service providers currently working in the areas of employment, training and social inclusion in a very difficult position. Although some service providers will, without too much disruption, find alternative sources of funding, other service providers will face such a catastrophic loss of funding that they will be forced to close or drastically scale back their activities. We recommend that the Government uses next year's Comprehensive Spending Review to remove much of the uncertainty about future levels of funding. We also assess the Government's proposals to repatriate regional funding and comment on the omission of the social agenda from the Government's consultative paper.

We recognise that projects must demonstrate added value. However, we are concerned that excessive bureaucracy and financial uncertainty are smothering service providers and that the needs of the final beneficiaries - who in many cases are vulnerable people - are being overlooked.

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