House of Commons - Twelfth Report of Session 2013-14

Twelfth Report of Session 2013-14 - European Scrutiny Committee Contents

18 Strengthening cooperation between public employment services

(35104)

11474/13

COM(13) 430

Draft Decision of the European Parliament and of the Council on enhanced cooperation between Public Employment Services (PES)

Legal base Article 149 TFEU; co-decision; QMV

Document originated 17 June 2013

Deposited in Parliament 26 June 2013

Department Work and Pensions

Basis of consideration EM of 16 July 2013

Previous Committee Report None

Discussion in Council Possible general approach at the EPSCO Council on 15 October 2013

Committee's assessment Politically important

Committee's decision Cleared

Background

18.1 Member States are responsible for developing and implementing their own economic and employment policies, but the EU Treaties establish a framework for the coordination of national policies with a view to achieving the objective of "full employment and social progress."[51] Article 145 of the Treaty on the Functioning of the European Union (TFEU) provides that the EU and Member States shall "work towards developing a coordinated strategy for employment and particularly for promoting a skilled, trained and adaptable workforce and labour markets responsive to economic change." Although the EU Treaties preclude any harmonisation of national laws, Article 149 TFEU makes provision for the adoption of "incentive measures" which are designed to:

"encourage cooperation between Member States and to support their action in the field of employment through initiatives aimed at developing exchanges of information and best practices, providing comparative analyses and advice as well as promoting innovative approaches and evaluating experiences, in particular by recourse to pilot projects."

18.2 Public employment services are services provided to employers and job seekers by bodies or organisations operating under public law, such as Jobcentre Plus in the UK. Whilst the business models under which they operate differ from one Member State to another, and may include responsibility for unemployment and other benefits, public employment services have a crucial role to play in implementing active labour market policies and in promoting the mobility of workers.[52]

18.3 In particular, the Commission has underlined the need to strengthen cooperation between public employment services in order to meet the headline target for employment set out in the Europe 2020 Strategy, which seeks to increase labour market participation amongst those aged between 20 and 65 from 69% in 2010 to 75% in 2020. In its Agenda for New Skills and Jobs, the Commission suggested that public employment services should act as "transition agencies", delivering a more comprehensive range of services covering skills assessment, profiling, training and career guidance, as well as better matching of skills to labour market needs.[53]

18.4 Guidelines issued by the Council in 2010, which are intended to inform the employment policies of Member States, recognise the important role of public employment services in developing and implementing active labour market policies.[54] More recently, the Council has also called for improved cooperation between public employment services to boost their effectiveness in responding to labour market needs and in facilitating geographical and occupational mobility.[55]

The draft Council Decision

18.5 The purpose of the draft Council Decision, which is based on Article 149 TFEU, is to establish an EU-wide Network comprising the Commission and public employment services nominated by Member States which would:

develop and implement evidence-based benchmarking systems to assess the performance of public employment services across the EU, establish methods for mutual learning, and share data, knowledge and best practice;
provide mutual assistance through various means of cooperation, including the exchange of information and staff, and support the implementation of country-specific recommendations issued by the Council within the framework of the 2010 employment guidelines;
adopt and implement a concept for modernising and strengthening public employment services in key areas;
prepare reports in the employment field on its own initiative or at the request of the Council or Commission;
contribute to the implementation of policy initiatives in the employment field; and
adopt and implement an annual programme that sets out the working practices of the Network, what it intends to deliver, and how benchmarking systems will be implemented.

18.6 The Network would operate from 1 January 2014 to the end of 2020 and is intended to contribute to the implementation of the Europe 2020 Strategy, improve the functioning and closer integration of labour markets across the EU, increase labour mobility, and help tackle social exclusion. The draft Decision would require the Network to cooperate with other labour market stakeholders. It would be funded from the employment strand of the Programme for Social Change and Innovation for the period 2014-20.[56] The Commission estimates that approximately €3 million would be required to fund the benchmarking and mutual learning activities of the Network and a further €1 million for Network meetings and studies.

18.7 In its explanatory memorandum accompanying the draft Decision, the Commission notes that cooperation between public employment services dates back to 1997 when an informal advisory group was established to promote the exchange of information and mutual learning. As participation in the advisory group was on a voluntary basis, the Commission suggests that it was unable to generate a sufficiently robust evidence base to inform the development of effective and widely-disseminated benchmarking and mutual learning practices. The draft Decision seeks to strengthen and expand existing cooperation so that public employment services are able to "act in unison...in the face of the current economic crisis." The Commission considers that a more formal structure is needed in order to increase participation in the activities of the Network as well as its "potential to contribute to the development of innovative, evidence-based policy implementation measures in line with the Europe 2020 objectives."[57]

The Government's view

18.8 The Minister for Employment (Mr Mark Hoban) notes that the UK has been involved in cooperation between public employment services (PES) since the inception of the advisory group in 1997 and its transformation into an expert network — the European Network of the Heads of Public Employment Services — which brings together, on a voluntary basis, all EU Member States plus Iceland. Norway, Liechtenstein and Switzerland. He highlights the importance of UK participation as a means of promoting UK policy more widely, including acceptance of the use of private partners in delivering employment programmes, such as the UK's Work Programme, adding:

"UK participation is welcomed by other PES in the EU; many cite Jobcentre Plus as inspiring their reforms. Most recently we have been providing expert support to the PES in Greece and Portugal on their reform plans.

"Currently, Spain and Poland are engaged in raising tenders for private sector employment programme delivery. UK companies are involved in the bidding."[58]

18.9 He also cites ways in which the UK has been able to learn from experience, in other Member States, notably the "ground breaking" use of digital services in the Netherlands, customer profiling in Germany, and the competency based recruitment methodology used in Belgium. The Minister recognises, however, that the voluntary basis on which cooperation is currently established can "limit the scope to encourage performance improvement in some public employment services" and that full participation could "significantly assist in supporting structural labour market reforms."[59] He continues:

"The Government agrees it is crucial to optimise PES delivery capacity thereby increasing cross-Europe activation and reducing unemployment. This can yield obvious economic benefits along with a reduction in migration 'pull factors' to lower unemployment areas, such as the UK."[60]

18.10 He suggests that the draft Decision respects the principle of subsidiarity on the grounds that:

"It will encourage cooperation and exchange of good practice, but not enable the Commission to impose new policies or specific delivery vehicles on Member States. We believe that the objective of encouraging EU wide participation in mutual learning activities, instituting mechanisms to identify low performance by PES and the identification of potential structural labour market problems arising from these would benefit from EU wide action."[61]

18.11 The Minister welcomes the scope for public employment services to cooperate more closely with the Council's advisory Employment Committee (responsible for monitoring the employment situation in the EU and Member States' employment policies) in order to provide evidence for the development of employment policies. He adds:

"We would support a structure which can, subject to agreement amongst Network members, enable consideration of how Member States put into operation Europe 2020 objectives to increase employment.

"The Government agrees we should support Europe-wide mutual learning programmes and open comparative assessment of PES (provided that this does not constitute the de facto introduction of targets and 'league tables'). This activity (bench-learning) can only operate effectively if all Member States participate. This would not be possible unless the Network was placed on a formal legal basis. These processes could be used by Member States to illustrate how they are delivering agreed policies."[62]

18.12 The Minister welcomes provision for the Network to prepare reports and consider broader policy questions and to support implementation of country-specific recommendations, provided these do not encroach on areas of Member State competence and respect the principle of subsidiarity. However, he suggests that the draft Decision should be amended to give formal observer status within the Network to the European Confederation of Private Employment Agencies, the Federation of European Employers, and the European Lifelong Guidance Policy Network, as their attendance at meetings would provide a valuable insight into private sector labour requirements.

18.13 The Minister anticipates that a general approach may be agreed at the EPSCO Council on 15 October 2013.

Conclusion

18.14 We note the Government's support for the draft Decision and consider that the legal base proposed — which provides for "incentive measures" to encourage cooperation between Member States on employment whilst expressly precluding any harmonisation of laws — is appropriate. Although the draft Decision raises no legal issues, it is one of a number of measures recently proposed by the Commission, such as the Council Recommendation establishing a Youth Guarantee[63] and a Youth Employment Initiative,[64] which are intended to provide practical tools to tackle high levels of unemployment in many parts of the European Union and to encourage more active labour market policies. We therefore consider that it may be of political interest to the House but are content to clear it from scrutiny.