19 Tackling youth unemployment —
the Youth Guarantee
| Committee's assessment
| Politically important |
| Committee's decision | Not 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
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| Document details | European Court of Auditors Special Report — EU Youth Guarantee: first steps taken but implementation risks ahead
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| Legal base | —
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| Department
Document number
| Work and Pensions
(36779), —; Special Report No. 03/2015
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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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