Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents


19 Tackling youth unemployment — the Youth Guarantee

Committee's assessment Politically important
Committee's decisionNot cleared from scrutiny; further information requested; drawn to the attention of the Work and Pensions Committee, the Business, Innovation and Skills Committee, the Scottish Affairs Committee and the Welsh Affairs Committee
Document details European Court of Auditors Special Report — EU Youth Guarantee: first steps taken but implementation risks ahead
Legal base
Department

Document number

Work and Pensions

(36779), —; Special Report No. 03/2015

Summary and Committee's conclusions

19.1 In April 2013, the Council adopted a Recommendation establishing a Youth Guarantee. Its purpose is to encourage Member States to develop schemes ensuring that all young people under the age of 25 receive a good-quality offer of employment, continued education, an apprenticeship or traineeship within four months of leaving formal education or becoming unemployed.[ 177] This Special Report, agreed by the European Court of Auditors in February 2015, considers whether the Commission has provided appropriate support to Member States in setting up national Youth Guarantee schemes, as well as potential risks which could have an impact on the effective implementation of the schemes. The audit performed by the Court focusses on the Commission's assessment of Youth Guarantee implementation plans submitted by five Member States (Ireland, Italy, Lithuania, Portugal and France) but also draws wider conclusions on the risks to effective implementation which are relevant to all Member States, including the UK. These concern:

·  the adequacy of funding for Youth Guarantee schemes;

·  the assessment of what constitutes a "good-quality offer" of employment, traineeship or apprenticeship; and

·  monitoring and reporting arrangements.

19.2 The Court indicates that future reports will continue to focus on youth unemployment, including the implementation of EU initiatives at Member State level.

19.3 The Minister for Employment (Priti Patel) notes that the 2013 Council Recommendation is not binding and that "there is no question of implementation being required of a Member State". She says that the UK "does not have a youth guarantee scheme of the kind envisaged by the EU" and that the Special Report "raises no policy issues of concern to the Government".

19.4 Although the Minister says that the UK "does not have a youth guarantee scheme of the kind envisaged by the EU", the UK has, in common with other Member States, presented to the Commission a Youth Guarantee Implementation Plan (in March 2014).[ 178] It is disappointing that the Minister provides no information on its content, particularly as Annex III to the Special Report indicates that the Commission considered the UK's Plan to be "very limited". We ask the Minister to explain the basis for this assessment and to indicate how any concerns raised by the Commission have been addressed.

19.5 We note that Croydon, Hartlepool and Pembrokeshire have all taken part in pilot projects to develop practical recommendations for implementing national youth guarantee schemes and related activities supported by the European Social Fund and the Youth Employment Initiative. The Minister makes no mention of these in her Explanatory Memorandum. We ask her to provide further information on the outcome of these pilot projects.

19.6 We would welcome the Minister's views on the three Recommendations made by the Court of Auditors in its Special Report. In particular:

·  The Special Report indicates that the UK is one of a number of Member States that have not so far disclosed the amount of national funding being made available to support the implementation of their national Youth Guarantee Implementation Plans. Does the Minister agree with the Court of Auditors that a clear and complete overview of the cost of all planned measures to combat youth unemployment under the Youth Guarantee scheme (or national equivalent) is necessary to enable the Commission to assess overall funding needs?

·  What are the Government's criteria for determining whether job offers, apprenticeships, traineeships or continued education are of a "good quality"?

·  Would the Government support action at EU level to define a minimum set of "qualitative attributes", as envisaged in the Court's second Recommendation?

·  Does the Government consider that monitoring mechanisms are sufficiently comprehensive to demonstrate a clear link between implementation of the Youth Guarantee (or national equivalent) and increased opportunities for young people in the labour market, so that investment decisions can be made on the basis of evidence of what works well?

19.7 We also ask the Minister to provide a copy of any Conclusions relating to the Youth Guarantee agreed by the Employment, Social Policy, Health and Consumer Affairs (EPSCO) Council at its meeting in June. Meanwhile, the Special Report remains under scrutiny. We draw it to the attention of the Work and Pensions Committee, the BIS Committee, the Scottish Affairs Committee and the Welsh Affairs Committee.

Full details of the documents: Special Report of the European Court of Auditors — EU Youth Guarantee: first steps taken but implementation risks ahead: (36779), —, Special Report No. 03/2015.

Background

19.8 The Council Recommendation establishing a Youth Guarantee ("the 2013 Recommendation") was agreed at a time of stubbornly high youth unemployment in many Member States. Eurostat data reveal that, by the end of 2014, nearly five million young people under the age of 25 were unemployed across the European Union. The aggregate youth unemployment rate was 21.4% in the EU and 23% in the euro area, compared with 23.1% and 23.9% at the end of 2013.[ 179] These figures conceal significant variations in youth unemployment between Member States. Those with the lowest rates were Germany (7.2%), Austria (9%) and the Netherlands (9.6%). At the other end of the scale, the youth unemployment rate exceeded 50% in Spain (51.4%) and Greece (50.6%) and 40% in Croatia (44.8%) and Italy (42%). The UK remains towards the lower end of the scale, with a youth unemployment rate of 16.7% in October 2014.[ 180]

19.9 The introduction of Youth Guarantee schemes across the EU is intended to stimulate structural reforms of education, training and job-search systems to help young people enter, and remain in, the labour market. The 2013 Recommendation sets out a number of guidelines to inform the development and implementation of national Youth Guarantee schemes "in accordance with national, regional and local circumstances". The guidelines, which are addressed to Member States, highlight the need for partnerships involving all relevant labour market players, early intervention and activation, support for labour market integration measures, monitoring and evaluation of Youth Guarantee schemes to ensure that policy interventions are evidence-based and cost-effective, and "full and optimal use" of EU funding instruments. The UK is one of seven Member States that have recently taken part in a pilot project to develop local partnerships and practical experience to implement national Youth Guarantee schemes. The areas covered in the UK pilot were Croydon, Hartlepool and Pembrokeshire.[ 181]

19.10 The principal EU funding instruments for Youth Guarantee schemes are the European Social Fund and the Youth Employment Initiative. The latter, agreed by the European Council in February 2013, has a budget of €6.4 billion (£4.58 billion) (half drawn from the European Social Fund and the remaining €3.2 billion (£2.3 billion) from a dedicated Youth Employment budget line) to support implementation of the Youth Guarantee and other job creation measures in regions within the EU where the youth unemployment rate exceeds 25%.[ 182] Funding under the Initiative is "frontloaded" so that funds are available in the first two years of the 2014-20 programming period to provide immediate support for the integration of young people into the labour market. Whilst Member States are required to make a national contribution to their national programmes implementing the European Social Fund, the additional funding provided by the Youth Employment Initiative is not subject to the principle of co-financing.

19.11 The 2013 Recommendation envisages a role for the Commission in the design, implementation and assessment of Youth Guarantee schemes. It entrusts the Commission with four specific tasks:

·  encouraging Member States to make best use of the European Social Fund and the Youth Employment Initiative to support the setting-up and implementation of Youth Guarantee schemes;

·  collecting and sharing examples of good practice in implementing Youth Guarantee schemes at national, regional and local level;

·  monitoring the implementation of Youth Guarantee schemes through the EU's Employment Committee and developing country-specific recommendations, where appropriate, as part of the European Semester process of multilateral surveillance of Member States' economic and employment policies; and

·  raising awareness of Youth Guarantee schemes across the EU.

The Special Report of the Court of Auditors

19.12 The Court of Auditors notes that, throughout 2014, youth unemployment within the EU as a whole remained at "alarmingly high levels". It estimates that 7.5 million young people were NEETs — not employed, not in education and not in training — and describes the range of short, medium and long-term measures available to Member States under the Youth Guarantee to support structural reforms as well as to provide individual assistance to young people seeking employment.

19.13 The first part of the Special Report focusses on the Commission's assessment of Youth Guarantee Implementation Plans submitted by a sample of five Member States (not including the UK). It concludes that the Commission provided "timely and appropriate support" to Member States in setting up their Youth Guarantee schemes, and that its assessment of their national implementation plans was comprehensive and generally thorough.

19.14 The second part of the Special Report identifies "potential risks" to the effective implementation of Youth Guarantee schemes and makes recommendations which would affect all Member States. The first risk concerns the adequacy of funding. The Court notes that national Youth Guarantee schemes will require "substantial investment" and that there should be "clarity" on the sources from which they will be funded. It says that the UK is one of nine Member States that have so far failed to provide any information on the amount of national funding envisaged. Moreover, the Commission's proposal for a Council Recommendation to establish a Youth Guarantee was not accompanied by the customary Impact Assessment, so there are no data (other than estimates produced by the International Labour Organisation) of the likely overall cost of implementing Youth Guarantee schemes. The Court explains that, in February 2015, the Commission estimated that a total of ?12.7 billion (£9.1 billion) of EU funding would be allocated to finance the schemes for the 2014-20 programming period. It anticipated that an additional ?4 billion (£2.87 billion) would be available from other sources. The Court highlights the shortfall between this sum — ?16.7 billion (£11.9 billion), amounting to ?2.4 billion (£1.7 billion) per year — and the higher implementation costs estimated by the ILO (around ?21 billion (£15 billion)). It considers that there is insufficient information on the potential costs of implementing Youth Guarantee schemes in each Member State and on the various sources of funding (EU and national). This makes it difficult for the Commission to draw any conclusions on "the overall feasibility and sustainability of the Youth Guarantee financial plans" and creates the risk of a funding shortfall.[ 183]

19.15 The second risk identified by the Court concerns the absence of an agreed definition or qualitative attributes for a job offer to be considered as being of "good quality". The Court notes that two non-binding EU instruments — a 2014 Council Recommendation on a Quality Framework for Traineeships[ 184] and a 2013 Council Declaration relating to the European Alliance for Apprenticeships[ 185] — set out minimum qualitative standards for traineeships and apprenticeships, but there are no similar instruments (other than some Commission guidance) defining a good-quality job. The Court concludes that "the absence of a set of qualitative attributes for a good-quality job offer leads to the risk that the Youth Guarantee schemes might be implemented inconsistently and ineffectively across Member States or even within an individual Member State".[ 186]

19.16 The third risk concerns the framework for monitoring the implementation of national Youth Guarantee schemes. The Court highlights the need for "robust monitoring mechanisms" from the outset to provide the basis for "effective, evidence-based policy making" and to ensure that funds are invested wisely and "make a real difference" for young people.[ 187] It considers that peer reviews undertaken by the EU's Employment Committee lack detail and depend on the quality and reliability of data provided by each Member State. Moreover, country-specific recommendations issued to individual Member States relating to their Youth Guarantee schemes are not, in many cases, effectively implemented. Other monitoring mechanisms and indicators established for the European Social Fund and Youth Employment Initiative do not provide sufficient detailed information on Youth Guarantee schemes and their contribution to tackling youth unemployment. The Court concludes that a comprehensive Youth Guarantee monitoring and reporting framework should be put in place so that the success or failure of Youth Guarantee schemes can be demonstrated and "to ensure that funds are invested wisely and measures are implemented in ways that will make a real difference for young people".[ 188]

19.17 The Court of Auditors makes three Recommendations to address the risks identified in its Special Report:

·  Member States should provide a clear and complete overview of the cost of all planned measures to combat youth unemployment under the Youth Guarantee scheme so that the Commission can assess the overall funding needs;

·  The Commission should promote a set of qualitative attributes that should be fulfilled for jobs, traineeships and apprenticeships to be supported from the EU budget. The Court suggests that this could be based on existing Commission guidance for the evaluation of the Youth Employment Initiative which defines a "good-quality" offer; and

·  The Commission should put in place a comprehensive monitoring system for the Youth Guarantee scheme, covering both structural reforms and measures targeting individuals. The results of this monitoring should be reported to the European Parliament and the Council.

The Commission's reply

19.18 The Commission confirms that it, too, would welcome further information from Member States on the overall cost of national measures implementing Youth Guarantee schemes. It accepts the remaining two Recommendations, which it suggests have already been partially implemented. The Commission says it will encourage further reflection on the concept of "good-quality" offers and provide further guidance. It notes that there are already quality standards covering apprenticeships, traineeships and continued education and adds, in relation to jobs:

    "The Commission is of the view that, in general, an offer is of good quality if the person who benefits from it achieves sustainable labour market attachment. That is to say, not return to unemployment or inactivity thereafter; a 'good-quality' offer can thus be measured by its outcome."[ 189]

19.19 The Commission explains that "a lengthy consensus building exercise" to define a common monitoring framework for the Youth Guarantee might have delayed its introduction. It notes that the EU Employment Committee has agreed an Indicator Framework for Monitoring which, alongside other monitoring mechanisms, should provide "a holistic view" of the impact of Youth Guarantee schemes on the labour market situation of young people. All of these mechanisms will inform the Commission's report on implementation of the Youth Guarantee which will be published in 2016.

The Government's Explanatory Memorandum of 8 June 2015

19.20 The Minister notes that the Youth Guarantee is enshrined in a non-binding Council Recommendation and that "there is no question of implementation being required of a Member State".[ 190] She says that Special Report issued by the Court of Auditors ("ECA") "raises no policy issues of concern to the Government", adding:

    "When considering the ECA's report, is it important to remember that the European Youth Guarantee is not a spending programme. Rather, the non-binding Recommendation establishing a Youth Guarantee agreed by the Council in 2013 suggested a range of avenues for Member States to explore in tackling youth unemployment, in ways suited to national and local conditions and priorities. The UK does not have a youth guarantee scheme of the kind envisaged by the EU. Instead the Government prefers to pursue its own programme of successful interventions and support for young people."[ 191]

19.21 Whilst the Court of Auditors report gives prominence to the European Social Fund and the Youth Employment Initiative as the principal sources of EU funding for the Youth Guarantee, the Minister makes clear that receipt of these funding streams is not conditional on establishing a Youth Guarantee. She continues:

    "In the UK measures to address youth unemployment are being implemented through national programmes as well as through the European Social Fund and the Youth Employment Initiative."[ 192]

19.22 The Minister considers that the Court of Auditors report "offers an interesting appreciation of aspects of progress tackling youth unemployment across Europe" and says that the Government "will be keen to ensure that any new information gathering activities are justified and minimal".[ 193] She expects the Employment, Social Policy, Health and Consumers Affairs (EPSCO) Council to agree Conclusions at its meeting on 18 June which "note" the report and underscore the need for "approaches to be geared to national and local conditions and focussed on practical outcomes".[ 194]

Previous Committee Reports

None, but the following Reports concerning the Youth Guarantee and the Youth Employment Initiative are relevant: Thirty-first Report HC 86-xxxi (2012-13), chapter 4 (6 February 2013); Thirty-sixth Report HC 86-xxxvi (2012-13), chapter 9 (20 March 2013); Thirty-ninth Report HC 86-xxxviii (2012-13), chapter 1 (17 April 2013); Fourth Report HC 83-iv (2013-14), chapter 10 (5 June 2013) and Thirty-fifth Report HC 219-xxxiv (2014-15), chapter 12 (4 March 2015).



177   See Council Recommendation of 22 April 2013, OJ No. C 120, 26.04.2013. Back

178   According to the Commission, the UK has not made its Youth Guarantee Implementation Plan available online. Back

179   The youth unemployment rate is the number of people aged 15 to 24 who are unemployed as a percentage of the labour force of the same age. Young people in full-time education are not part of the labour force. Back

180   See Eurostat unemployment statistics. Back

181   The European Commission has published a First Findings Report on the pilot projects. Back

182   Five UK regions qualify for funding from the Youth Employment Initiative: Inner London, Merseyside, Tees Valley and Durham, West Midlands, and South West Scotland. Back

183   See para 56 of the Special Report.  Back

184   Council Recommendation. Back

185   Council Declaration. Back

186   See para 63 of the Special Report.  Back

187   See para 65 of the Special Report.  Back

188   See para 91 of the Special Report.  Back

189   See p.44 of the Special Report.  Back

190   See para 3 of the Minister's Explanatory Memorandum. Back

191   See para 16 of the Minister's Explanatory Memorandum. The closest equivalent to the Youth Guarantee in the UK is the Youth Contract, but this does not include, for example, the four month "trigger period" envisaged in the Council Recommendation. Back

192   See para 4 of the Minister's Explanatory Memorandum. Back

193   See para 17 of the Minister's Explanatory Memorandum. Back

194   See para 20 of the Minister's Explanatory Memorandum. Back


 
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