Documents considered by the Committee on 8 May 2019 Contents

1EU Fund for Aid to the Most Deprived

Committee’s assessment

Politically important

Committee’s decision

(a) Not cleared from scrutiny; further information requested

(b) Cleared from scrutiny

(a) and (b) drawn to the attention of the Education Committee, the Home Affairs Committee and the Work and Pensions Committee

Document details

(a) Commission report: Summary of the annual implementation reports for the operational programmes co-financed by the Fund for European Aid to the Most Deprived in 2016

(b) European Court of Auditors Special Report: FEAD—Fund for European Aid to the Most Deprived: Valuable support but its contribution to reducing poverty is not yet established

Legal base

(a)—

(b)—

Department

Home Office

Document Numbers

(a) (40204), 14699/18 + ADD 1, COM(18) 742; (b) (40501), Special Report No. 5,—

Summary and Committee’s conclusions

1.1In January 2019, we examined a European Commission report on the implementation of the Fund for European Aid to the Most Deprived (“the Fund”) in 2016.1 Established in 2014, the purpose of the Fund is to support Member States in meeting the poverty reduction target agreed by EU leaders in June 2010 which aims to “lift at least 20 million people out of the risk of poverty and social exclusion” by the end of 2020.2 The Fund has a total budget of €3.4 billion for the period 2014–20, with each Member State receiving a minimum amount of €3.5 million to be distributed in annual instalments. The Commission saw a need for a specific, ring-fenced fund, as those most likely to qualify for assistance were too far from the labour market to benefit from the social inclusion and active labour market measures supported by the European Social Fund. The Fund is intended to complement Member States’ national poverty eradication and social inclusion policies by providing an additional source of targeted funding to alleviate “forms of extreme poverty with the greatest social exclusion impact, such as homelessness, child poverty and food distribution”.3 In its report—document (a)—the Commission explained that around 16 million people had benefited from the Fund in 2016, with most (96%) receiving food support, bringing the total beneficiaries between 2014 and 2016 to around 38 million. None of these beneficiaries were in the UK as the Commission noted that “implementation of the Fund in the UK has not started yet”.4

1.2In her Explanatory Memorandum of 23 January 2019, the Minister for Crime, Safeguarding and Vulnerability (Victoria Atkins MP) told us that the Government had changed its original plan to use the Fund to support breakfast clubs in schools with particularly high rates of social disadvantage. It had decided instead to use the Fund to support vulnerable 16–24-year olds who have entered the UK through a resettlement scheme, been granted refugee status through the in-country asylum process, or identified as potential victims of modern slavery, but had been unable to set up the necessary governance infrastructure and secure the agreement of the European Commission in time. As a result, the UK had failed to claim the initial tranche—£600,000—of the UK’s allocation under the Fund by the end of 2018 (as required under the EU’s “de-commitment rules”). This sum had therefore been deducted from the UK’s total share, leaving £2.9 million to support social inclusion activities for the most deprived rather than the £3.5 million originally ring-fenced for the UK. Further details are set out in our Report agreed on 30 January 2019. The Minister anticipated that a new operational programme would be ready to submit to the European Commission “provisionally by the end of March 2019, with the programme of works scheduled to begin in July 2019 “ and the programme and Fund becoming operational in the UK “by the end of the year”.

1.3Noting that the Home Office’s bid to take over the administration of the Fund from the lead Department (Work and Pensions) was only confirmed in September 2018, we acknowledged the difficulty in setting up the necessary governance infrastructure and securing Commission approval in the short time remaining until the end of 2018. Whilst not in a position to attribute responsibility for the evident lapse in cross-Government planning and coordination to ensure effective delivery of the Fund, we made two observations. First, all Member States bar the UK were able to deliver aid supported by the Fund by the end of 2017, and most were able to do so in 2016. The eligibility requirements and administrative burdens which the Minister cited as an obstacle to delivery in the UK did not appear to have presented an insurmountable hurdle elsewhere in the EU. Second, the Government rightly insists on sound financial management when administering EU funding programmes and has extensive experience of administering the European Social Fund (the nearest equivalent). We questioned whether the eligibility and administrative requirements for the Fund for European Aid to the Most Deprived were any more onerous than those which the Government routinely manages in other areas of EU funding. We were unwilling to clear the Commission report—document (a)—from scrutiny until the Minister was able to confirm that the UK’s operational programme for the remaining €2.9 million had been completed and approval obtained from the European Commission. We also asked the Minister to explain how the UK’s exit from the EU—whether with or without a deal—would affect the UK’s eligibility for the Fund which runs until the end of 2020.

1.4Since we last reported on the Fund, the European Court of Auditors (“the Court”) has published a Special Report which is intended to inform discussions on a successor funding instrument for the next EU budgetary period from 2021–27. This instrument envisages merging the Fund into a revamped European Social Fund (‘ESF+’). The Court considers whether the Fund has proved to be an effective tool for alleviating poverty and contributing towards the social inclusion of the most deprived. It concludes that:

1.5The Court makes three recommendations which seek to ensure that basic food and material assistance provided under the successor ESF+ programme from 2021 onwards are targeted towards those most in need in each Member State, are accompanied by effective social inclusion measures and include mechanisms for assessing their impact.

1.6The Minister’s Explanatory Memorandum of 26 April 2019 on document (b) confirms that the Government was unable to provide data to inform the Court of Auditors Report as the Fund has yet to be implemented in the UK. She says that the Home Office is “in the final stage of designing the specifications” for the UK’s operational programme and expects to submit it to the European Commission “provisionally by the end of May 2019, with the programme of works scheduled to begin in the autumn”. EU de-commitment rules continue to apply, meaning that:

[…] if the UK does not spend the allocation that has been committed for FEAD [the Fund for European Aid to the Most Deprived] in the EU budget by the end of the 2019 calendar year, this funding will again be removed from the UK’s total share.

1.7The Minister indicates that the implementation of the Fund in the UK will be contingent on wider developments in the UK’s exit negotiations, in particular whether the UK’s exit is based on a negotiated withdrawal agreement.

Our Conclusions

1.8We note that the timetable for completing and submitting a new operational programme to secure the next instalment from the Fund has already slipped by two months since the Minister submitted her first Explanatory Memorandum on document (a) in January. Any further slippage may mean that the UK again falls foul of the EU’s de-commitment rules, putting at risk a source of funding and material assistance for some of the most vulnerable. We intend to keep a close eye on developments and therefore continue to hold the Commission report under scrutiny until the Minister is able to confirm that the UK’s operational programme for the outstanding €2.9 million has been completed and approved by the European Commission and preparations are well underway to implement the Fund in the UK. We trust that the Minister will also, by then, be better placed to explain how the UK’s exit from the EU—whether with or without a deal—will affect the UK’s eligibility for the Fund which runs until the end of 2020.

1.9The European Court of Auditors report—document (b)—concerns changes to a successor funding instrument which will form an integral part of the revamped European Social Fund (ESF+) during the next EU budgetary period from 2021–27. As the European Commission has accepted the bulk of the Recommendations made by the Court, we are content to clear the report from scrutiny. We draw this chapter to the attention of the Education Committee, the Home Affairs Committee and the Work and Pensions Committee.

Full details of the documents

(a) Commission Report: Summary of the annual implementation reports for the operational programmes co-financed by the Fund for European Aid to the Most Deprived in 2016: (40204), 14699/18 + ADD 1, COM(18) 742; (b) European Court of Auditors Special Report No 05: FEAD—Fund for European Aid to the Most Deprived: Valuable support but its contribution to reducing poverty is not yet established: (40501), Special Report No. 5/19,—.

Previous Committee Reports

Fifty-third Report HC 301–lii (2017–19), chapter 9 (30 January 2019). See also our earlier Reports on the Regulation establishing the Fund for European Aid to the Most Deprived: Twenty-second Report HC 86–xxii (2012–13), chapter 3 (5 December 2012), Fourteenth Report HC 83–xiv (2013–14), chapter 10 (11 September 2013), Twentieth Report HC 83–xix (2013–14), chapter 3 (30 October 2013), Twenty-ninth Report HC 83–xxvi (2013–14), chapter 8 (8 January 2014), Ninth Report HC 219–ix (2014–15), chapter 12 (3 September 2014) and Thirty-fourth Report HC 219–xxxiii (2014–15), chapter 3 (25 February 2015).


1 See Regulation (EU) No 223/2014 on the Fund for European Aid to the Most Deprived.

2 See the Conclusions agreed by the European Council on 17 June 2010.

3 See recital (7) and Article 3 of Regulation (EU) No 223/2014.

4 See p.1 of the Commission report.




Published: 14 May 2019