EUROPEAN SOCIAL FUND (13531/05, 8219/06)
Letter from the Chairman to James Plaskitt
MP, Parliamentary Under-Secretary of State, Department for Work
Your Explanatory Memorandum dated 2 February
was considered by Sub-Committee G on 9 March.
We note that the Government welcomes those amendments
that would strengthen the European Employment Strategy and reflect
the Lisbon Agenda. We agree with the Government's view that the
ESF should be used where it can add value to Member States' policies
and increase employment and improve workforce skills. We are also
glad to note that the amended proposal includes a simplified delivery
mechanism and aims to encourage a more strategic approach to programming.
In our view, the most important outstanding
issue remains the eventual size of the ESF budget and the way
it will be allocated in accordance with the priorities outlined.
We will want to examine that very carefully in due course.
To help us prepare for that examination, we
would welcome clarification of the Government's current overall
policy approach to the Structural and Cohesion Fund and how that
might affect the allocation of funding for the ESF and other components.
For example, we see that the DTI EM on the original. Proposal
dated 1 September 2004 (reference 11606/04) argued that structural
funding should only be given to the poorest Member States, presumably
even if that meant that the UK would not benefit from the ESF.
But your new EM appears to accept that the ESF should support
activities to improve the labour market relevance of vocational
education and training in all Member States and not just in the
poorest ones. We should be grateful if you would clarify this,
explain the likely consequences for the UK and let us know what
consultations you have had about those consequences.
We will retain the document under scrutiny pending
your reply and further progress reports.
9 March 2006
Letter from Rt Hon Alun Michael MP, Minister
of State for Industry and the Regions, Department of Trade and
Industry to the Chairman
Thank you for your letter of 9 March 2006 to
James Plaskitt, Parliamentary Under Secretary of State, Department
for Work and Pensions regarding the above Explanatory Memorandum.
I am responding as the negotiations on the reform of the Structural
and Cohesion Funds fall within my portfolio.
I welcome your support for the Government's
view that the European Social Fund should be used where it can
add value to Member States' policies and increase employment and
improve workforce skills.
I referred in my letter of 4 February to the
agreement reached on the overall EU budget at the December European
Council. The agreement means that our regions will continue to
receive significant Structural Funds receipts in the next Financial
Perspective. It also means that our poorer regions in particular
will continue to receive substantial EU funds for regional development.
We have been making clear since 1999 that the UK was certain to
receive less from 2007, given the need to provide funds for the
new Member States, and given the fact that our economic performance
has been stronger than many other Member States.
The Government's original proposals for Structural
Funds reform of 2003, as set out in the Department of Trade and
Industry's Explanatory Memorandum number 11606/04, would have
focused a more limited Structural Funds budget on the poorer Member
States, with richer countries financing regional development programmes
from their domestic budgets. However, some countries were unprepared
to accept such a sharp cut in receipts within the timescale of
the next Financial Perspective. The agreement represents a compromise
that reflects the range of views amongst the Member States, while
ensuring that the new Members receive the very significant levels
of funding that they need to catch up with the EU-15.
As part of the reform negotiations, the Member
States have agreed to strengthen the strategic focus of future
Structural Funds spending by establishing Community Strategic
Guidelines on Cohesion and National Strategic Reference Frameworks,
which will set out the broad objectives for future programmes.
The European Commission published its draft
Community Strategic Guidelines on 5 July 2005. This was the subject
of the Department of Trade and Industry's Explanatory Memorandum
number 10684/05 + ADD/1. This was followed by a Europe-wide consultation
on the Guidelines, which ended on 30 September. In our view, the
draft Guidelines successfully dentify the contribution that EU
cohesion policy can make towards meeting the Lisbon targets and
provide a good starting point for discussion amongst the Member
On 28 February the Government launched a consultation
on the UK's draft National Strategic Reference Framework. The
National Framework will establish the broad priorities for future
Structural Funds (including European Social Fund) Programmes in
the UK from 2007-13. The consultation document also invites comments
on two related issues: the UK Government's proposals for distributing
its Structural Funds allocations under the Competitiveness Objective
(replacing the current Objectives 2 and 3); and administrative
arrangements for delivering the Funds in the UK during the next
I note your concern regarding the eventual size
of the European Social Fund budget and the way in which it will
be allocated. The Government's current thinking is that the UK's
Competitiveness funds should be divided equally between the European
Regional Development Fund (for regional development) and the European
Social Fund (for promoting employment) at the UK level. We have
not yet reached any firm conclusions on the allocation methodology
for distributing the two funding streams across the UK's nations
and regions. As part of the consultation we are inviting comments
on how best to allocate the UK's ERDF and ESF funding, including
views on the indicators, weightings, safety nets and ceilings
that could be used.
The Department of Trade and Industry will publish
all non-confidential responses on its website after the consultation
ends. It will aim to publish a response to the consultation within
three months following the close of the consultation on 22 May.
This will include a summary of responses, a statement of the positions
of the Government and the Devolved Administrations on the issues
raised in the light of the responses, and the final UK National
Strategic Reference Framework.
I hope that this clarifies the Government's
thinking on Structural and Cohesion Fund reform. I will keep your
Committee informed as the negotiations on the reform of the Structural
and Cohesion Funds progress.
10 April 2006
Letter from the Chairman to James Plaskitt
Your Explanatory Memorandum dated 18 April was
considered by Sub-Committee G on 27 April.
We note that agreement has been reached at official
level on the Presidency compromise text of the ESF Regulation
and that the Government welcomes it, believing it to be an improvement
on the earlier version.
We are grateful to your DTI colleague Alun Michael
for the useful clarification of the Government's overall approach
in his letter to me dated 10 April, including confirmation that
the UK will continue to benefit from the ESF, as well as from
the European Regional Development Fund, during the next Financial
Perspective. We are glad to note that the Government will be carrying
out consultations on the best way of handling these funds in the
I have already written to your colleague Malcolm
Wicks confirming clearance from scrutiny of the separate proposals
for Council Regulations (references 8216/06, 7177/06 and 8218/06)
on the ESF, as well as the European Regional Development Fund
and the Cohesion Fund, which include the all-important budgetary
In the circumstances, we are also prepared to
clear the Presidency compromise text of the proposal for a Regulation
(reference 8219/06) from scrutiny, as well as the earlier Commission
amended proposal (reference 13531/05) which it replaces.
Although your EM states that the compromise
text was due to be considered for "political agreement"
by Council on 25 April, we understand from your officials that
it will now be considered by COREPER on 3 May with a view to possible
Council consideration on 5 May. We would be grateful if you would
report when a decision has been taken by Council.
27 April 2006