27 Services of general interest: social
services
| (27477)
9038/06
+ ADD 1
COM(06)177
| Commission Communication: Implementing the Community Lisbon Programme: Social services of general interest in the European Union
|
| Legal base | — |
| Document originated | 26 April 2006
|
| Deposited in Parliament | 11 May 2006
|
| Department | Work and Pensions
|
| Basis of consideration | EM of 18 May 2006
|
| Previous Committee Report | None
|
| To be discussed in Council | Not known
|
| Committee's assessment | Politically important
|
| Committee's decision | Cleared, but further information requested
|
Background
27.1 The EC Treaty defines neither "services of general interest"
nor "services of general economic interest". But services
of general interest are generally understood to be services which
are provided by the public or private sector and are subject to
public service obligations. A common justification for the imposition
of public service obligations is the promotion of territorial
and social cohesion. Typically public service obligations include
universal provision at a standard price.
27.2 Services of general interest include services
of general economic interest, which are generally understood to
be such services that operate or compete in a market. They can
range from network industries such as energy supply or telecommunications
to services as diverse as waste collection, port services and
carcase rendering. Non-economic services of general interest can
include services such as education or health provision. But the
boundary between services of general economic interest and non-economic
services of general interest is imprecise and shifting.
27.3 Services of general interest also include social
services such as, for example, social security schemes, help for
persons faced by personal challenges or crises (perhaps drug addiction
or family breakdown), activities to integrate or re-integrate
persons into society (perhaps rehabilitation, language training
for immigrants or occupational training), help to persons with
long-term health or disability problems and provision of social
housing.
27.4 There is a great patchwork of services of general
interest, defined and delivered differently from one Member State
to another. But the provision of services of general economic
interest is subject to many common market rules, such as those
related to competition, including state aids and procurement,
the right of establishment and the free movement of services.
27.5 In May 2004 the Commission published a White
Paper on the role and development of services of general interest.
This was debated in European Standing Committee C in December
2004.[91]
27.6 There is a potential relationship between services
of general interest and the amended draft Directive on services
in the internal market currently under consideration by the Council
and the European Parliament.[92]
The document
27.7 In the White Paper on services of general interest
the Commission foreshadowed a "systematic approach in order
to identify and recognise the specific characteristics of social
and health services of general interest and to clarify the framework
in which they operate and can be modernised". Accordingly
this Communication is that approach in relation to social, but
not health, services. In its introduction the Commission says
the document takes account of the Social Agenda,[93]
the Community Lisbon Programme[94]
and the exclusion of "social services in the area of housing,
childcare and support to families and persons in need" from
the scope of the amended draft Directive on services in the internal
market. It reflects consultations by the Commission of a wide
range of interested parties.
27.8 The first substantive section of the Communication:
- discusses what is meant by
social services in the Community;
- examines their characteristics
as services of general interest, whether economic or non-economic;
- comments on them as a booming sector subjected
to modernisation in all Member States;
- notes, despite services being organised very
differently in different Member States, common aspects of this
modernisation — benchmarking, decentralisation, outsourcing
to the private sector and public-private partnerships and other
forms of funding complementary to public funding; and
- describes a Community framework which welcomes
differences and is favourable to modernisation.
27.9 The second section considers the application
of Community rules in relation to social services noting that:
- case law confirms the freedom
of Member States to define and regulate services, subject to such
considerations as transparency, non-discrimination and public
contract law;
- case law holds almost all social services of
general interest to be economic services of general interest and
thus subject to freedom to provide services, freedom of establishment
and competition rules; and
- evolution of the jurisprudence of the European
Court of Justice on a case-by-case basis creates uncertainty for
public authorities and operators in the social services sector.
27.10 This section then discusses application of
the Community framework to social services in relation to four
frequent situations:
- delegation of a service to
an external partner or a public-private partnership;
- provision of public financial compensation and
its compatibility with state-aid rules;
- regulation of the market, particularly in relation
to freedom to provide services and freedom of establishment (noting
that exclusion from the scope of the amended draft Directive on
services in the internal market does not exempt services from
these general rules); and
- compatibility with the rules on access to the
market.
27.11 The third section of the Communication deals
with better monitoring of and support for social services of general
interest. It first outlines a consultation the Commission will
undertake about:
- the characteristics reflecting
the nature of social services of general interest and their pertinence
in gauging the specific features of such services;
- use of those characteristics by the Member States
when defining the general interest missions of social services
and the arrangements for their organisation, in order to reflect
the Community framework;
- experience of application of Community law in
the field of social services of general interest and possible
problems; and
- how these characteristics, or others, could be
used by the Commission in checking the compatibility of any arrangement
for a social service with Community rules.
27.12 In this section the Commission then notes its
intention to make biennial reports on the application of Community
rules to the development of social services. The first, the study
for which should be completed in 2007, "will concern the
functioning of the sector, its socioeconomic importance, as well
as the implications of the application of Community law".
The Commission concludes that after this report it "will
decide how to follow up this process and identify the best approach
to take, including, giving consideration to the need and legal
possibility for a legislative proposal".
The Government's view
27.13 The Parliamentary Under Secretary of State,
Department for Work and Pensions (Mr James Plaskitt), says the
Government will be responding to the consultation the Commission
announces, particularly about how Community law and European Court
of Justice case law may impact on reform of public services in
the UK. He adds that broadly the Government supports a solution
which removes legal uncertainty from the modernisation of social
services under the Lisbon Strategy for Jobs and Growth.
Conclusion
27.14 This document is a useful summary of the
situation of the social services sector in relation to services
of general interest in the Community. In particular it clarifies
that social services often fall into the category of economic
services of general interest and, as such, are subject to the
general Treaty rules underpinning the Community's common market.
It also highlights the need to establish legal clarity for social
services in this situation.
27.15 We clear the document but should like to
see in due course the Government's response to the Commission's
consultation. We shall of course scrutinise any legislative proposal
which may emerge subsequently.
91 (24595) 9824/03 (25476) 7549/04 (25679) 9643/04:
See HC 42-xxiii (2003-04), para 1 (16 June 2004) and Stg Co
Deb, European Standing Committee C, 1 December 2004, cols.
3-30. Back
92
(27409) 8413/03: See HC 34-xxvi (2005-06), para 3 (26 April 2006)
and HC 34-xxviii (2005-06), para 2 (10 May 2006) and Stg Co
Deb, European Standing Committee, 16 May 2006, cols. 3-22.
Back
93
(26381) 6370/05: See HC 38-xi (2004-05), para 4 (15 March 2005)
and HC 34-i (2005-06), para 44 (4 July 2005). Back
94
(26765) 11618/05: See HC 34-x (2005-06), para 22 (16 November
2005). Back
| 
