Making it work: the European Social Fund - European Union Committee Contents

CHAPTER 2: The EsF in practice

Experience with the ESF

29.  Participants of the projects visited by Sub-Committee G in London were overwhelmingly positive about their experience (see Box 3). Those at the Tomorrow's People Trust project mentioned that they received more time and attention from the project than they would get at a Jobcentre Plus. One participant felt that the programme had built their confidence and particularly appreciated the professional advice they had received. Similarly, a participant at the Step Up project who had learned to touch-type indicated that she too had benefited from the advice available from her mentor, which had allowed her to identify a course that she might then pursue at college. All of the participants at the Step Up project whom the Sub-Committee met favourably compared the project to their experiences in mainstream education (Appendix 3).


ESF projects in London visited by Sub-Committee G

Tomorrow's People Trust

This project is located in the East of London and is targeted at the hardest to reach, such as lone parents, the over-50s, participants with disability or health problems, ex-offenders and the long-term unemployed. It has been in operation for 18 months, and is part of the London Job Centre Plus (DWP) co-financed ESF programme. The project started in July 2008 and will run until July 2011, with ESF funding of £1,550,000.

Step Up

The project, based in Elephant and Castle in London, aims to help 14-18 year olds gain new skills, such as computing, and prepare for employment. It is targeted at those that have been excluded from school, have excluded themselves prematurely from school or have been referred by a school. The project started in September 2008 and is due to finish on 31 July 2010. It will receive £1,012,100 of ESF funding and is co-financed by the Learning and Skills Council (LSC).

30.  More generally, most of our witnesses recognised the value of the ESF. The Commission concluded that the history of the ESF "is one of success and we see that it has a great future as well" (Q 198). It pointed in particular to the ways in which the ESF had induced policy change at the national level by introducing new perspectives, observing that Germany had changed its emphasis from a main focus on the already long-term unemployed to preventing the shorter-term unemployed from slipping into this category (Q 199). In Ireland, the ESF had helped to raise awareness about inequalities in the Irish economy and society by helping with the expansion of childcare and funding the Equality Authority (QQ 219, 228). Various witnesses emphasised the contribution that the ESF had played previously in supporting social inclusion (QQ 48, 90, 102). The Government Office for Yorkshire and Humber pointed to its Progress Together model as an example of supporting social inclusion under the current programme. This was described as "a much more holistic approach to supporting the most disadvantaged" including outreach work, training, advice, guidance and support (QQ 151-2).

31.  The Scottish Government had also found the ESF extremely valuable in encouraging equality and social inclusion criteria to be built into projects; gender balance was one important consideration (Q 312). Similarly, tackling gender imbalance had been a priority of the Welsh Assembly Government. It was looking particularly at addressing career development and at gender stereotyping in career choices (Q 313).

32.  Others emphasised the economic benefits of ESF intervention. The Department for Employment and Learning, Northern Ireland concluded that "the ESF continues to make a significant contribution to supporting economic growth in Northern Ireland aimed at creating a knowledge-based economy, with a highly skilled, and flexible workforce" (p 247). The Convergence Partnership Office for Cornwall and the Isles of Scilly noted that the ESF was helping to address "the increasingly acute skills and employment needs of individuals in these testing economic conditions", with the South West Regional Development Agency highlighting that three people a day were being helped back into work in Cornwall by the ESF (Q 132, p 86).

Targeting the "hardest to reach in the labour market"


The hardest to reach in the labour market

The "hardest to reach in the labour market" are those who possess the fewest characteristics needed for participation in the labour market as it currently exists and who are likely to be the most difficult to engage in ESF activity as a result of personal or contextual factors, such as:

·  multiple or complex problems;

·  unstable or transient residence;

·  absence of the most basic of skills or employment/learning experience;

·  significant disability;

·  absence of English language ability.

33.  There was broad agreement among our witnesses that the "hardest to reach" (see Box 4) were an important sector of society with which the ESF was well placed to engage. The Mayor of London and London Councils explained that the key aim of the ESF in London was "to provide targeted support to the hardest groups to engage in employment and training and provide training opportunities to those in the workforce that want to upgrade their qualifications and skills" (p 194). The South West Regional Development Agency took a similar view, adding that, in Cornwall and the Isles of Scilly, there were 900 young people not engaged in employment or training (NEETs) and they were "really difficult young people to reach", often living in rural areas, without their own transport. It concluded that the major focus of the Fund should be the hardest to reach in the labour market (Q 110). The LSC confirmed that, at the beginning of the 2007-13 programme, ESF resources were used to target the 16-18 NEET group and those adults who had been disengaged from the labour market for over 12 months (Q 18).

34.  Similarly, the Scottish Government concentrated on moving the hardest to reach back towards work, such as those who were inactive for reasons of discrimination, disability, poor education and social circumstances (Q 276). By way of example, the Scottish Government asked the Skills Development Scotland organisation to work with those who did not usually participate in modern apprenticeships, such as ethnic minorities, in order to ensure that the ScotAction packages engaged with a balance of people across Scotland from disadvantaged communities (see also paragraph 124). ScotAction had been "an extremely useful tool" (Q 312).

35.  The LSC emphasised, however, that there was a balance to strike between deploying resource to help those who had suffered disadvantage more recently (such as the Rover workforce made redundant in 2005 and subsequently assisted back into work by the ESF and other means) and those who had suffered disadvantage over a longer period of time. It recognised that the economic downturn had changed the balance slightly given the larger proportion of individuals in the short term unemployed category (QQ 16, 18). (See Chapter 4 for further consideration of the effect of the downturn on ESF provision.)

36.  Representatives of the Third Sector (the voluntary sector), which has an important role in delivering the Fund, expressed considerable doubts as to whether the Fund had been reaching those with multiple disadvantages (Q 73, pp 50, 245-6). They observed that there had been a specific priority in the 2000-6 period of combating social exclusion, with 25% of funds targeted at the hardest to reach. This was not replicated under the current programme, and it was estimated that the proportion going to the hardest to reach was probably more in the region of 5% (QQ 76, 90, p 40).

Challenges faced by the Third Sector

37.  There was some concern from representatives of the Third Sector that the Sector had been hampered in its involvement in the current programme by the system of co-financing in England (see paragraph 14) and that this was at least part of the reason for the apparent reduction in the proportion of ESF directed at the hardest to reach (pp 91, 246-7). Community Service Volunteers asserted that "our ability to push the boundaries and work with excluded groups has been curtailed" (p 47). It was suggested that the move towards public procurement of large-scale contracts had made it difficult for smaller providers to be involved (Q 76).

38.  In order to substantiate their arguments, the Third Sector European Network (TSEN) provided some evidence of those projects that were no longer supported by the ESF. Among 17 organisations sampled in the north east of England which had accessed ESF in the previous round, none had done so in the 2007-13 programme (p 63). A specific example was a project called "Move On", which worked with some 1,300 mental health services users, refugees, asylum seekers, people with disabilities, people with learning difficulties and single parents (Q 78).

39.  Other witnesses rejected the suggestion that the Third Sector was under-represented in ESF delivery. The South West Regional Development Agency and the Government Office For Yorkshire And The Humber noted that there was a specific allocation of ESF funding to ensure that the Third Sector was able to respond to the tendering rounds that the Co-Financing Organisations (CFOs) carried out and thus continued to make a strong contribution (QQ 121, 153). As specific evidence of Third Sector involvement in South Yorkshire, the Government Office for Yorkshire and the Humber pointed to the organisation "VC Train", a consortium for Third Sector skills delivery, which was awarded £4 million of ESF funding in July 2008 for a period of two years (p 107). Others drew our attention to Cornish projects and we also visited voluntary sector run projects in London (pp 82-5, 104-6).

40.  In response to the Third Sector concerns, the Government told us that 60% of the sub-contractors in co-financed programmes in England were Third Sector organisations (p 245). The Government had been keen to use the ESF during the recession to ensure that those furthest from the labour market were not pushed further away due to the higher number of people out of employment, work for which the Third Sector was particularly suited (QQ 380-1). The Government also noted that, whereas under the previous system small providers had been required to identify their own match funding, this was no longer necessary with co-financing. It emphasised that the focus should be on an organisation's "ability to help people" rather than its origin (Q 388).

41.  Responding to the view that smaller Third Sector organisations were encountering difficulties in accessing funds, the Commission noted that there was no evidence to suggest that their participation was any lower than under the previous programme, but that it had been agreed to improve the evidence base (Q 202). Like the Government, the Commission emphasised that it was interested above all in delivery of the proposed targets in conformity with the programme (Q 204).

42.  An alternative perspective on the effectiveness of the ESF in supporting innovative, small projects was provided by our witnesses from the devolved administrations. The Scottish Government was of the view that its system of partnership bidding rather than co-financing allowed "unique little projects" to come forward (Q 291). Similarly, the Welsh Assembly Government considered that its mixed funding approach would give a range of organisations the opportunity to stay engaged more directly with the programmes (Q 293). Nevertheless, both administrations admitted that working with larger organisations rendered it easier to meet the audit requirements of the Fund (QQ 296-8, 303).

Green skills

43.  Several witnesses gave practical examples of how the ESF was already supporting the development of "green skills". In North West England, the Green Ways to Work project was being funded by the ESF to develop, test and deliver new skills to address climate change and sustainable development. A similar project was being supported in South Yorkshire at Dearne Valley College (QQ 170-1).

44.  The Minister told us that the ESF was already investing £2.8 million in a Sustainable Construction Skills Academy in Dartford in order to develop some of the lower level skills within the green construction industry (Q 393). The South West Regional Development Agency emphasised the same need to improve the skills of those already in work by, for example, training existing plumbers to fit new, greener boilers (QQ 110, 119).

45.  Taking a more negative view, the University of Sunderland noted that the restriction in the current ESF programme in England on skills provision to those of levels 1 and 2 (see Box 5) severely limited the possibilities to invest in the higher level skills training required for the development of low carbon technologies (Q 45).

Lower and higher level skills


The skills hierarchy

Lower and higher level skills relate to the degree of sophistication and depth of content tied up in the ability (skill) to perform a particular role or task. There is an internationally recognised hierarchy of skills levels (from level 1—basic, level 2—GCSE, level 3—A level, up to Level 5—postgraduate), against which formalised qualifications or achievement level can be benchmarked. This is how for example an NVQ level 4 can be recognised as at the equivalent level of depth and complexity to a full first degree. In the current ESF programmes in the UK, there is little scope for supporting work to lead to achievement beyond level 3, except within the convergence regions.

46.  Our witnesses generally accepted that the focus of the ESF should be on lower level skills. The Government Office for the North West drew the Committee's attention to the recommendations of the Leitch Review of Skills,[24] and concluded that the ESF must have an emphasis on lower level skills "because this is where there is very strong evidence that market failure happens"—once you are beyond the basic levels, the market tends to work better (Q 155). The Minister emphasised that, for those without them, "the basic skills and foundation skills" must be provided (Q 367). In Wales, a focus had been placed on lower level skills in the East Wales Programme (Q 278). Higher Education European Funding Services Limited recognised that "a good 90-95 per cent" of the funds should be spent on those needing support at the lower end of the qualification ladder (Q 41).

47.  On the other hand, we heard criticism from the higher education sector about the balance of funding between lower and higher level skills. The North West Universities Association regretted that there was much less of an emphasis on higher level skills in the current programme given that the North West regional skills analysis identified higher level skills provision as an area requiring greater attention (QQ 34, 43). Higher Education European Funding Services Limited commented that this lesser emphasis had hampered the ability to provide higher education, such as mechanical engineering at Huddersfield University, to disadvantaged people locally. It also observed that higher level skills were an important complement to resources devoted to lower level skills (Q 38).

48.  Other witnesses recognised the need for a balance between lower and higher level skills. As the Minister pointed out, the Leitch Review (see paragraph 46) also emphasised that the number of unskilled jobs was going to diminish and there would be a need "to be able to compete with our international competitors on the basis of ever higher levels of skill". He explained that, in the second half of the current ESF programming period, the Government would be increasing the amount of level 3 technical skills that could be gained, and asserted that "there is a skills journey that people need to go on" (Q 367). The West Midlands Leaders Board welcomed this increased focus on higher level skills (P 64-Vol I). Such a balance of skills needs was also recommended by London Councils, which emphasised that, in the context of the London job market, "it is about trying to make sure that the skills you are trying to develop in people match the needs of the employers in the market in which you are working" (Q 322).

49.  The value of devoting ESF funds to higher level skills was demonstrated by evidence from Cornwall. As convergence regions, West Wales and the Valleys and Cornwall and the Isles of Scilly could devote substantial ESF funding to higher level skills. In the former, about 60% of funding under the convergence programme went to lower level skills and the remainder to higher level skills. For Cornwall, the example of "Unlocking Cornish Potential" (see Box 6) was cited, which was a project enabling recent graduates to stay with companies that would not otherwise be able to keep them on (QQ 110, 278, p 104).


"Unlocking Cornish Potential"

In the first five years of the scheme:

234 graduates were placed with 149 Cornish businesses;

59% of the businesses reported an increase in turnover, with an average of over £128,000 in the first 12 months of employing the graduate;

70% of the graduates were offered a full-time job with their host business after completing their projects; and

over 50% of the graduates were originally from Cornwall.

50.  The Convergence Partnership Office for Cornwall and the Isles of Scilly remarked "we feel very strongly that the ESF agenda should travel across the entire employment and skills agenda, all the way from those who are hardest to reach in terms of getting into work through to the higher skills". This was of particular relevance to Cornwall and the Isles of Scilly as they lacked any higher education facilities until very recently (Q 156).


51.  The Minister explained that he interpreted additionality (see paragraph 22) as referring to the addition of scale or quality by, for example, adding more hours to training or enhancing the user experience (Q 369). Lincolnshire County Council defined it as "bigger, better and faster". An example of "bigger" was a new project creating 37 apprenticeships for adults who would not otherwise have been eligible because of their age. "Better" was its Countryside Job Bus which visited villages to provide training and Jobcentre facilities. "Faster" included its ability to respond to industrial change, such as local Siemens redundancies (Q 341).

52.  Other witnesses also gave examples of additionality. The LSC and the Government Office for Yorkshire and the Humber cited the example of the Government's Train to Gain programme, which the LSC had been able to supplement by allowing "level 2s" into the programme. In its Response to Redundancy Programme (see Box 10), the LSC attempted to prevent individuals from reaching the stages in the unemployment timeline where they would become eligible for national funding. In all cases, noted the LSC, the ESF was used to work around the edges of mainstream funding (QQ 20, 173). Other examples provided by the LSC included the provision of additional mentoring support, additional English language support and other learning support that people might need for which there was not sufficient mainstream funding, but would allow them eventually to participate in schemes funded nationally (Q 21).

53.  The Convention of Scottish Local Authorities (COSLA) pointed to its Community Planning Partnerships (CPPs), a nationally organised scheme providing funding for innovative projects at the local council level, as examples of additionality (Q 262). One example of a recent cash injection from the scheme was £2.8 million of ESF support for "Glasgow Works", a project in Glasgow which targeted groups alienated from the labour market. The Welsh Assembly Government pointed to the ability of the ESF to broaden the scope of the intervention brought by a standard employment programme by boosting confidence and improving motivation. It added that, under the skills priority, the focus of adding value was on adding numbers, putting more people through apprenticeship programmes than would otherwise be the case (Q 287). The South West Regional Development Agency reported that the ESF allowed preparatory work with individuals before using mainstream funding (Q 111).

54.  In higher education it was noted that funds available through the ESF in the previous programming period had allowed institutions to address their local market, whereas funds from the Higher Education Funding Council were generally aimed at the national market (QQ 34, 39, 70). The ESF had been used by the higher education sector to waive fees and offer small bursaries to those who would normally be least able to afford the cost of high-level training (Q 62). This amounted to around 70% of ESF spend on higher education in the north east (Q 63).

How is additionality assured?

55.  The Government explained that they challenged new projects on their additionality as a first stage of assessment, before the Commission checked compliance. To date, the Government had not encountered any problems with the Commission over the additionality of programmes in England (QQ 370-2). The Welsh Assembly Government confirmed that the Commission checked compliance with the principle of additionality mid-way through, and at the end of, the multi-annual programme (p 187).

56.  In terms of assessing additionality, the Scottish Government explained that, when negotiating programmes, it was necessary to establish "baselines" in terms of normal business and then demonstrate what additional activity the ESF could provide (Q 289). The Government Office for Yorkshire and the Humber and the Government Office for the North West had found this easier with the co-financing model as compared to the previous, direct bidding model, under which it was harder to identify what would be there without the additional ESF funding (Q 185).

57.  We heard that establishing additionality at the local level was important. The South West Regional Development Agency told us that it sought to ensure additionality through its local contracting for a particular activity, taking account of what already existed and what was needed, and COSLA concluded similarly that "the more localised you do the interventions, the easier it is to compare and measure" (QQ 129, 262).

58.  Witnesses also described the difficulties encountered in identifying additionality. The Convergence Partnership Office for Cornwall and the Isles of Scilly warned that "the additionality of ESF needs constant monitoring" (p 86). For example, a number of initiatives from central Government launched in response to the economic crisis were already being delivered through the ESF in Cornwall and the Isles of Scilly (QQ 129, 183). The Government Office for Yorkshire and the Humber noted that additionality was more difficult to identify where ESF funding was being used to enhance programmes rather than deliver something new (Q 185).

Publicising the ESF

59.  The Commission was of the view that the ESF was a very visible and tangible benefit of the EU, reaching, as it does, 10 million people per year, but that participants were not always aware of the EU's involvement. The Commission was working with Member States to improve the visibility of the ESF (QQ 223-4). London Councils agreed with the Commission that the Structural Funds helped to make "Europe real" (Q 356).

60.  On this subject, the Minister noted that the Government's budget for publicising the ESF over the period 2007-10 was £935,000, of which £374,000 came from the Technical Assistance strand of ESF funding (see paragraphs 64-66). Explaining some of the work involved, the Minister referred to: the fact that participants must be informed that they are in receipt of ESF money; a national launch event that was held in 2007 with the Commissioner; various events that are held around the country to celebrate some of the achievements of the ESF; over 1,000 regional and local press articles about the ESF; the fact that the Minister does a series of visits and encourages other Ministers to do likewise around their regions; and the use of new media such as YouTube and ESF Works (a website for bringing together best practice). On the other hand, the Minister suggested that recipients might be aware that they were being funded by the ESF but might not understand that this money came from the EU (Q 364).

61.  The Scottish Government explained that part of its Communication Plan for the Structural Fund Operational Programmes 2007-13 was to publicise good projects with successful outcomes (p 165). Its methods included: seminars; programme launches; publicity events; and PR campaigns, using radio and website coverage in order to raise public awareness of European Structural Funds across Scotland. Finally, all participants were informed that they were in receipt of ESF support.

62.  From the higher education sector, the University of Sunderland recognised that one of the Commission's frustrations had been lack of awareness among recipients, but the University itself emphasised that those being supported for access to higher education were aware of the provenance of the funding (Q 62).

63.  The West Midlands Leaders Board had developed a "Joint Regional Strategy for ESF Communication Policy" along with partners including the LSC, the Government Office for the West Midlands and Jobcentre Plus. The objective of the strategy was to ensure the effective exchange of information and to ensure that coverage was maximised. As part of this, Technical Assistance (see below) had been used to commission a PR Agency to co-ordinate and facilitate events and press coverage (p 252).

Technical Assistance (TA)

64.  The Government told us that the TA allocation (see paragraph 6) for the 2007-13 England ESF programme was £98m, of which £20.5m had been committed so far. As it was unlikely that the full TA would be committed by the end of the programme, the Government might make a proposal to re-allocate some of those funds towards additional employment and training provision (p 221).

65.  The West Midlands Leaders Board commented that TA had proved essential in supporting the delivery of the co-financing plan, but that providing the necessary matching public funds to the TA programme was difficult. It therefore recommended that either TA funds be incorporated as a ring-fenced element of the main Priorities or that a higher ESF intervention rate be introduced for TA (p 252).

66.  The LSC similarly recognised the difficulty that regional partners had experienced in finding sufficient match funding for TA, and also suggested that a higher ESF intervention rate[25] might be permitted for TA (p 2).

The future: ESF transitional arrangements for termination of the Learning and Skills Council

67.  One of the main bodies responsible for delivering the ESF in England, the LSC, is due to be dissolved in April 2010, with its responsibilities to be split between the Skills Funding Agency (SFA), the Young People's Learning Agency (YPLA) and local authorities.

68.  Lincolnshire County Council warned of the management challenge under the reorganisation to make sure that the ESF was not lost in "an absolutely massive scale of change" in both organisational and programme terms, particularly given that the ESF was a relatively small part of the LSC's portfolio (Q 342).

69.  The LSC itself confirmed that it was working on the development of the operating model for the ESF in the future, under which the SFA would be operating for adult skills with co-financing, but also as a shared service on behalf of the YPLA and local authorities in terms of the 14-19 age group. A service level agreement was being drawn up between the SFA and YPLA to clarify the activities for which the SFA would be responsible. The current LSC team working at the national level on ESF would be transferred intact to the SFA. While there would be changes at regional levels, the LSC was putting in place a training plan to ensure that skills, knowledge and experience were transferred (QQ 2, 4).

70.  The Minister was content that adult skills would migrate easily from the LSC to the SFA, but thought an area with greater potential for problems was the targeted work with NEETs on which the DCSF (Department for Children, Schools and Families) leads. In that area, there would be a complex interaction between the YPLA and local authorities, seeking to relate the activities of individual local authorities coherently to the regional employment and skills strategies (Q 412).

Conclusions and Recommendations

71.  Our witnesses have recognised the value of the European Social Fund, pointing to its particular benefits in terms of introducing new ideas, social inclusion and economic development and we conclude that the ESF is an important component of the EU's broader social and economic cohesion policy.

72.  The ESF is funding particularly valuable work with the hardest to reach and least skilled. While higher level skills are crucial for the EU's economic development, the ESF has limited resources and we remain convinced that its added value lies in its ability to make the hardest to reach and the least skilled employable. We recommend that priority be given to safeguarding this aspect of the ESF's role.

73.  We are concerned that the system of competitive tendering under co-financing in England, whilst having many merits, may have led to providers being incentivised to "cherry pick" participants who are easiest to place into the labour market, at the expense of the hardest to reach. We therefore recommend that this risk be explicitly addressed by, for example, delivery bodies being contractually required to demonstrate that they are still delivering to the hardest to reach.

74.  It is evident that many of the providers best able to assist the hardest to reach are in the Third Sector. We have heard conflicting evidence as to their reduced involvement in the ESF England programmes in the course of the current programming period. It is critical that the objectives of the ESF are delivered and that the appropriate participants are reached. No particular contractor or sector has a right to funding; any award must be based on merit. We acknowledge, though, the special value that the Third Sector can bring to the programme and therefore conclude that it is important that small operators have a fair opportunity to innovate and to be involved. We recommend that the Government and the Commission ensure that this Sector is encouraged to participate to its best ability in the programme.

75.  We welcome the work already being undertaken through the ESF to support green skills and consider this aspect of the ESF to be relevant as it moves forward.

76.  Additionality is a fundamental principle underlying the EU's Structural Funds and measuring it can be complex. We heard particularly that the need to monitor the principle constantly is challenging. We therefore recommend that Managing Authorities share this responsibility with those disbursing the Fund.

77.  We agree with the Commission that the ESF is a very visible and tangible benefit of the EU. While we were impressed by the efforts being made to publicise it, we agree that its visibility needs to be improved. We recommend that Member States and the Commission make this a priority. The Commission should assist with the sharing of best practice between Member States and regions as appropriate.

78.  We heard evidence to support the importance of Technical Assistance to the effective delivery of the ESF, and recommend that Managing Authorities both work with organisations to overcome difficulties encountered in identifying match funding and explore the possibility of introducing a higher ESF intervention rate for Technical Assistance.

79.  We were pleased to hear the plans being put in place by the LSC to deal with the transition to new arrangements for administration of the ESF following the dissolution of the LSC in England. Nevertheless, such a transition will not be simple. At such a key time for the ESF in England, we recommend that the Government monitor arrangements closely to ensure that the requirements for the delivery of the second phase of funding for the 2007-13 programme this year are handled efficiently and do not lead to delays in commissioning and delivering new provision.

24   Leitch Review of Skills, "Prosperity for all in the global economy-world class skills". Final Report, HM Treasury, December 2006  Back

25   The intervention rate refers to the proportion of total programme or project spend made up by ESF funds. For Technical Assistance, the provider normally receives 50% ESF funds, and must identify matching funds from other public funds at its disposal. Back

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