Thirty-ninth Report of Session 2012-13 - European Scrutiny Committee Contents


1   Youth Employment Initiative

(a)

(34677)

7589/13

COM(13) 144

(b)

(34771)

7533/13

COM(13) 145


(c)

(34772)

7537/13

COM(13) 146


Commission Communication: Youth Employment Initiative



Draft amendment to Commission proposal COM(2011) 607 final/2 — draft Regulation of the European Parliament and of the Council on the European Social Fund and repealing Council Regulation (EC) No 1081/2006


Draft amendment to Commission proposal COM(2012) 496 — draft Regulation of the European Parliament and Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Council Regulation (EC) No 1083/2006

Legal base(All) —
Documents originated 12 March 2013
Deposited in Parliament (a)  19 March 2013

(b)  and (c) 18 March 2013

Department(a)  and (b) Work and Pensions

(c) Business, Innovation and Skills

Basis of considerationEMs of 26 and 27 March 2013
Previous Committee ReportNone; but see HC 86-xxxi (2012-13), chapter 4 (6 February 2013)
Discussion in CouncilApril/May
Committee's assessmentPolitically important
Committee's decisionFor debate in European Committee B

Background

1.1  At its meeting on 7/8 February 2013, the European Council agreed to establish a Youth Employment Initiative with a budget of 6 billion for the period 2014-20 to support Member States' efforts to implement the youth employment package put forward by the Commission last December and, in particular, its proposal for a "Youth Guarantee" to help young people enter the labour market. Our Thirsty-first Report, agreed on 6 February 2013, describes the content of the youth employment package.[1] The most important element is a Council Recommendation which urges Member States to establish Youth Guarantee schemes ensuring that all young people up to the age of 25 receive "a good quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education" and setting out a number of guidelines to inform the design of each scheme.[2] The Recommendation was agreed by the Employment, Social Policy, Health and Consumer Affairs Council on 28 February.

The Commission Communication — document (a)

1.2  The Communication describes the scale of youth unemployment, averaging 23.6% across the EU as a whole, but notes that it is particularly acute in certain regions and Member States and presents a serious threat to social cohesion as well as to the longer-term competitiveness of the European economy. The purpose of the Youth Employment Initiative is to provide a dedicated source of EU funding to tackle youth unemployment in regions with levels of youth unemployment exceeding 25%. Half of EU funding (€3 billion) would take the form of targeted investment from the European Social Fund to support the sustainable integration of young people not in employment, education or training into the labour market, with the remaining sum being drawn from a dedicated youth employment budget line.

1.3  The Commission envisages that implementation of the Youth Employment Initiative should form part of a comprehensive strategy for tackling youth unemployment, reflecting differing national, regional and local circumstances, and that funding will be subject to the usual procedures for developing cohesion policy programmes for the period 2014-20. As a result, changes are needed to two draft Regulations currently under consideration in the Council and European Parliament, the first establishing the overall strategic framework for EU cohesion policy for the period 2014-20 (the draft Common Provisions Regulation), and the second setting out the thematic objectives and investment priorities for the European Social Fund.

Proposed changes to the draft Regulation establishing the European Social Fund for 2014-20 — document (b)

1.4  The European Social Fund (ESF) is one of the EU's Structural Funds. It provides targeted financial assistance to regions across the EU to help reduce disparities in levels of social and economic development. ESF interventions focus specifically on improving employment opportunities for workers within the EU's internal market by encouraging geographical and occupational mobility and by helping workers to adapt to change. In October 2011, the Commission proposed a draft Regulation identifying the principal objectives underpinning ESF support and more detailed investment priorities for the period 2014-20.[3] During the course of negotiations, the Council has agreed a series of "partial general approaches" on the draft Regulation and other EU cohesion policy instruments. The only outstanding issue is the budget, which depends on the Council and European Parliament reaching agreement on the EU's Multiannual Financial Framework for 2014-20.

1.5  The Commission has proposed a number of changes to the draft Regulation which would recognise the Youth Employment Initiative as a core element of the European Social Fund for 2014-20, focussing specifically on the sustainable integration into the labour market of young people aged between 15 and 24 in eligible regions who are not in employment, education or training. The Commission anticipates that the injection of additional specific funding to tackle youth unemployment should yield tangible results relatively quickly. It therefore proposes more intensive monitoring and evaluation of the Youth Employment Initiative against a set of specific indicators. Whilst Member States would still be required to make a financial contribution to their national programmes implementing the European Social Fund, the additional funding provided by the Youth Employment Initiative would not be subject to the principle of co-financing.

Proposed changes to the draft Common Provisions Regulation for 2014-20 — document (c)

1.6  The draft Common Provisions Regulation establishes common rules governing five EU Funds, including the European Social Fund.[4] Most of its provisions, excluding the budget, have been agreed by the Council in a series of partial general approaches. The changes proposed by the Commission to the draft Regulation are intended to take account of the introduction of the Youth Employment Initiative. They establish the resources available for the Youth Employment Initiative (already agreed by the European Council, but subject to a broader agreement between the Council and the European Parliament on the Multiannual Financial Framework for 2014-20 ) and require the Commission, each year, to set out the annual breakdown of funding available to Member States and eligible regions from the Youth Employment Initiative. This funding will not be subject to the "performance reserve" which seeks to reward the most effective and efficient national programmes by setting aside a small proportion (5%) of the total allocation of EU cohesion funding for each Member State (by category of region and by Fund) pending a mid-term performance review. This is because the Commission proposes to "frontload" funding from the Youth Employment Initiative in the expectation of achieving concrete results more quickly.

1.7  The changes would also require Member States, in submitting annual implementation reports on their national programmes, to include specific information on the Youth Employment Initiative. A new Annex to the draft Regulation establishes the methodology for the allocation of funding to eligible regions with a rate of youth unemployment of more than 25%.

The Government's view

1.8  The Department for Business, Innovation and Skills has overall responsibility for EU cohesion policy, including the draft Common Provisions Regulation, but the European Social Fund is the responsibility of the Department for Work and Pensions.

1.9  The Minister for Employment (Mr Mark Hoban) agrees that the Youth Employment Initiative should be included within the regulatory framework established for the European Social Fund (ESF) in a way that enables its implementation to be assessed separately, but adds that the Government

"will want to ensure that the proposals on monitoring, publicity and financial support do not increase the complexity of the ESF or create unnecessary additional administrative burdens for managing authorities or beneficiaries."[5]

1.10  He notes that the changes proposed by the Commission relate to its original proposal, whereas the Council has agreed a partial general approach on a compromise text covering all elements of the draft Regulation, with the exception of the budget. The Government will therefore seek to ensure that any changes are consistent with the Council's approach. He says that eligibility for support from the Youth Employment Initiative (including any allocation for the UK) will be based on youth unemployment figures for 2012 produced by Eurostat which are not yet available. He expects the Irish Presidency to seek agreement in Council to the changes proposed in April or May so that they may form part of a possible First Reading agreement with the European Parliament on the overall package of EU cohesion policy measures. This should enable the Youth Employment Initiative to become operational from 1 January 2014.

1.11  Turning to the proposed changes to the draft Common Provisions Regulation, the Minister for Business and Enterprise (Michael Fallon) says that the Government will seek to ensure that the resources available for the Youth Employment Initiative, and the criteria for allocating them, continue to reflect the agreement reached by the European Council in February. He explains how the allocation of funding will work:

"The sum of money available will be divided by the number of unemployed between the ages of 15-24 in regions with more than 25% youth unemployment in 2012. Each eligible region will receive an allocation which reflects the percentage of unemployed between the ages of 15-24 in the region proportionally to the overall number of unemployed between the ages of 15-24 in all eligible regions. The allocation for each Member State is the sum of the allocations for each of its eligible regions. This money will be matched with ESF funding."[6]

1.12  He notes that funding will only be available to Member States which have put in place a comprehensive strategic policy framework for tackling youth unemployment, including a Youth Guarantee scheme, and adds:

"The Government will seek to ensure that the new conditionality set out in the amendment to the CPR [Common Provisions Regulation] is a direct and necessary precondition for use of the YEI [Youth Employment Initiative] and matched ESF funding, and that it respects the principles of proportionality and subsidiarity."[7]

Conclusion

1.13  We accept that changes to the draft Common Provisions Regulation and the draft Regulation on the European Social Fund are necessary to establish the level of resources for the Youth Employment Initiative and how they are to be disbursed. We note that the changes proposed by the Commission appear to reflect what was agreed by the European Council in February and are broadly acceptable to the Government. However, we also note that the proposal to establish a Youth Employment Initiative, with a specific budget line to target investment towards regions where the rate of youth unemployment exceeds 25%, was not subject to any prior scrutiny. We agree with the Government that Member States and regions should have the flexibility to determine which interventions are most effective and how to make best use of available resources to tackle youth unemployment. We would like the Minister to explain what added value he expects the Youth Employment Initiative to bring to existing efforts to tackle youth unemployment, particularly in the UK, and recommend the documents for debate in European Committee B.





1   See headnote. Back

2   See para (1) of the final text of the Recommendation agreed by the Council, document 6944/13, at http://register.consilium.europa.eu/pdf/en/13/st06/st06944.en13.pdf. Back

3   See (33218) 15247/11: HC 428-xli (2010-12), chapter 7 (9 November 2011). Back

4   See (33217) 15243/11: HC 428-xli (2010-12), chapter 1 (9 November 2011). The other Funds are the European Regional Development Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. Back

5   See para 21 of the Ministers' Explanatory Memorandum. Back

6   See para 7 of the Minister's Explanatory Memorandum on document (c). Back

7   See para 19 of the Minister's Explanatory Memorandum on document (c). Back


 
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