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Documents considered by the Committee on 5 June 2019 Contents

8Youth Employment Initiative: Increasing resources for 2019

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1303/2013 as regards the resources for the specific allocation for the Youth Employment Initiative

Legal base

Article 177 TFEU; ordinary legislative procedure; QMV

Department

Work and Pensions

Document Number

(40365), 6197/19 + ADD 1, COM(19) 55

Summary and Committee’s conclusions

8.1The proposal under scrutiny was adopted on 17 April 2019.41 The Regulation amends the amounts of resources available for economic, social and territorial cohesion set out in Article 91(1) of Regulation (EU) No 1303/2013 (laying down common provisions for the Union’s various structural and cohesion funds).42

8.2These amendments increase the specific budgetary allocation of resources available to the ‘Youth Employment Initiative’ (YEI) for 2019. Commitment appropriations for YEI have been increased by €116.7 million to €350 million.43 Due to the requirement for YEI funding to be matched by funding from the European Social Fund (ESF)—and to prevent a consequent reduction in ESF funding to other areas—the Regulation allows Member States to transfer up to 50% of the additional YEI resources to the ESF. Increased appropriations will be met from existing funds earmarked under the 2014–20 multiannual financial framework (MFF).

8.3The rationale for these changes is cited in the preamble to the Regulation as being urgent due to the advanced stage of the implementation of operational programmes under the 2014–20 MFF. In its statement on the second draft budget of the European Union for the financial year 2019, the European Parliament and the Council stated that:

[R]educing youth unemployment remains a high and shared political priority and reaffirm their determination to make the best possible use of budgetary resources to reach this goal, and in particular through the Youth Employment Initiative (YEI).

Towards this end, further funds have been made available for YEI for 2019 from the ‘Global Margin for Commitments’ (a specific budgetary flexibility instrument under the current MFF which is designed to support EU policies on “youth employment, and for migration and security measures”).

8.4By way of background, YEI is one of the Union’s main financial resources used in support of national measures aimed at implementing the EU’s ‘Youth Guarantee’ schemes (the Youth Guarantee is a commitment—made by all Member States—that, within four months of becoming unemployed or leaving formal education, all young people under the age of 25 will receive a good quality offer of: employment; continued education; an apprenticeship; or a traineeship). Measures funded through YEI are focussed on young people living in regions where youth unemployment was higher than 25% in 2012. Funds were, however, increased in 2017 for regions with youth unemployment levels that exceeded 25% in 2016.

8.5The Minister with charge over the Regulation, Alok Sharma MP, wrote to the Committee by way of Explanatory Memorandum on 7 March 2019. This Explanatory Memorandum was withdrawn at the request of Committee officials and replaced on 20 March. This was due to insufficient information being provided—in order for a complete assessment to be made of the (then) proposal—in the ‘policy implications’ section of the Explanatory Memorandum.

8.6The Minister states that YEI funding is allocated in the UK to ‘NUTS 2’ areas with youth unemployment rates above 25% in 2012.44 Eligible areas in England include: Inner London, Merseyside, Tees Valley and Durham, and the West Midlands. As per Regulation 1303/2013, 90% of YEI funds are to be allocated to NUTS 2 areas with the remaining 10% being directed at NUTS 3 areas—those outside of NUTS 2 areas—with youth unemployment rates above 30% in 2012. Eligible NUTS 3 areas include: Kingston upon Hull, Leicester, Nottingham and Thurrock. In addition to England, South Western Scotland is also eligible for YEI funds.

8.7More practically, YEI funding in the UK has been used in support of initiatives such as Centrepoint’s ‘Tees Valley Pathways’ programme which aims to support 8,698 young people aged between 15 and 29 across the Tees Valley who are unemployed or inactive to move into education, employment, training or self-employment. The programme is delivered by a consortium of organisations from the public, private and voluntary sectors. The contract for the programme is worth £25.38 million (of which £9.52 million has been contributed from YEI funding).

8.8As explained by the Minister, the UK would not qualify for a share of the additional YEI funding authorised by the Regulation as youth unemployment levels were below 25% in all NUTS 2 areas in 2016 (which is a condition of funding awarded after 2017).

8.9We thank the Minister for his Explanatory Memorandum of 20 March 2019. This was requested by Committee officials as a replacement for that provided on 7 March which was rejected due to missing information.

8.10The Committee is concerned by the poor quality of the original Explanatory Memorandum and of its replacement. By way of example, under the heading ‘legal and procedural issues’ the legal basis for the Regulation has been cited as “the amendment reflects the increase of the resources for the specific allocation of the YEI for the 2019 Union budget”. This section should read Article 177 TFEU. Under the same heading, the voting procedure is defined as being “not applicable—see para 11”. Paragraph 11 of the Explanatory Memorandum reads “see Annex A” which is a history of Parliamentary scrutiny of related documents. The correct voting procedure for the proposal is ‘qualified majority voting’. The Minister’s Explanatory Memorandum suffers from further deficiencies including under the heading ‘subsidiarity’. Evidence of the Government’s subsidiarity assessment is missing, reading, without any explanation as to why, “this document complies with the principle of subsidiarity”. It is incumbent on the Government, irrespective of the type of legislative proposal under scrutiny, to conduct its own complete and through subsidiarity assessment against Protocol (No 2) to the EU Treaties.

8.11More worrying still, paragraph 10 of the Explanatory Memorandum refers to another Explanatory Memorandum on the proposal which does not exist (referred to as ‘EM 6948/19’). Upon closer investigation, a Council document numbered 6948/19 does exist and details the Presidency compromise text reached on the proposal on 28 February.

8.12This confusion raises a more serious issue; the proposal under scrutiny was transmitted from the Commission to the Council on 1 February 2019 and clearly states in its Preamble the urgency with which it should be adopted. In spite of this, the Committee did not receive a full Explanatory Memorandum on the proposal until 20 March 2019. This was nearly six weeks after the publication of the proposal and, more importantly, after COREPER had approved a mandate to open negotiations with the European Parliament. This has prevented the Committee from being able to adequately scrutinise the Government’s position on the proposal and, in the absence of any further correspondence from the Minister, we remain in the dark as to how the Government voted.

8.13Although the Regulation was adopted on 17 April 2019, the Committee did not receive a request for clearance of the proposal from scrutiny or for scrutiny to be lifted in order for the Government to support adoption. As is standard practice across Whitehall, in the event that the Government plans to abstain or vote against adoption, we still expect it to inform the Committee of the reasons why within good time of the meeting in question (whether COREPER or Council).

8.14We are disappointed with the way in which the Minister and his Department have handled the file under scrutiny which—save for his Department’s usually high standards in this regard—would lead us to call into question his commitment to full and effective Parliamentary scrutiny. We remind the Minister that as far as the UK’s withdrawal from the EU is concerned, Parliament’s oversight of Government actions relating to EU documents will—and does—remain of significant importance.

8.15In light of the above, we retain the file under scrutiny pending satisfactory answers to the following questions:

Full details of the documents

Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1303/2013 as regards the resources for the specific allocation for the Youth Employment Initiative: (40365), 6197/19 + ADD 1, COM(19) 55.

Previous Committee Reports

None.

41 Regulation (EU) 2019/711 of the European Parliament and of the Council of 17 April 2019 amending Regulation (EU) No 1303/2013 as regards the resources for the specific allocation for the Youth Employment Initiative.

42 Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 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 and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006.

43 As per April exchange rates (£1 = €0.85830, this is equivalent to £100.2 million and £300.4 million, respectively.

44 NUTS is a territorial statistical unit. NUTS 2 areas are typically larger counties or groups of smaller counties. NUTS 3 areas are usually local authorities or groups of local authorities.



Published: 11 June 2019