Chapter 3: EU measures to address youth
36. In this Chapter we examine whether Member
States, civil society organisations, young people and other stakeholders
believe that EU action to address youth unemployment is necessary,
desirable and effective. In order to assess this we consider the
current and proposed initiatives at EU level, which form part
of an overall EU youth unemployment strategy.
EU Legal basis
37. The EU Treaties define the extent of the
European institutions' competence to act in any given area.
In the area of employment, they provide that:
"The Union shall take measures to ensure
coordination of the employment policies of the Member States,
in particular by defining guidelines for these policies."
38. The Treaties provide for the EU and Member
States to work towards this objective in a number of ways.
They enable the EU to promote the coordination of employment policies
by adopting yearly conclusions on the employment situation in
the Union, making country specific recommendations to Member States
and drawing up an annual set of guidelines which Member States
are required to take account of in creating their employment policies.
The Treaties also allow the EU to adopt "incentive measures"
designed to encourage cooperation and the sharing of good practice.
Current and proposed initiatives
39. In 2010, the EU adopted its Europe 2020 strategy,
which outlined its goals for Europe in five key areas. In the
area of employment, the European Commission's headline target
was that 75 per cent of 20-64 year olds in the EU should be in
employment by 2020.
The current high rates of youth unemployment have led to a greater
focus on policies aimed at young people (aged 15-24), with a view
to achieving this target.
As indicated in paragraph 1, EU action in relation to youth
unemployment is not new and makes use of instruments and funds
which have been in existence for many years. The current crisis
coincides with a change of 'programming period'; a renewal of
the main EU spending programmes, which will encompass new priorities
and principles for implementation from 2014 onwards. Europe 2020
provides the strategic direction for the new funding period.
40. The key current and proposed EU actions to
address youth unemployment are outlined in Boxes 3 and 4 below.
EU funding programmes
|The European Social Fund (ESF) was set up in 1957 and is the main financial instrument used by the EU and Member States to create employment opportunities and support measures for young people, NEETs and the socially excluded. ESF programmes run for a seven year period and are allocated a share of the overall EU budget agreed as part of the Multiannual Financial Framework (MFF). The ESF works by distributing funding to Member States and regions to finance operational programmes that have been agreed with the European Commission.
ESF funding to address unemployment for the period 2014-2020 will be worth approximately 72 billion over the seven year period, with around the same amount of 'match funding' provided by Member States. This is less than the 76 billion that was available for the period 2007-2013. All European projects under ESF are jointly funded by both the EU and the Member State in question. 68 per cent of the ESF funding for the period 2007-2013 went towards projects that benefitted young people in some way.
The ESF funds allocated to youth issues will be significantly greater than that from the Youth Employment Initiative (see below) and will apply across the whole of the UK and the EU.
The European Regional Development Fund (ERDF) was established in 1973 and aims to strengthen economic and social cohesion in the EU by correcting imbalances between regions. It focuses its investments on several key priority areas, including support for small and medium-sized enterprises (SMEs) and for innovation. This has ramifications for young people in a number of ways: support for new business start-ups and entrepreneurship, which could be open to young people; support for job creation at different skills levels, thereby increasing employment opportunities for young people; and support for SMEs in taking on apprentices, trainees and placements, increasing the supply of transitional measures into careers.
The Youth Employment Initiative was agreed in February 2013 by the European Council. For the period 2014-20, it will comprise 3 billion from the ESF and 3 billion from a specific budget line dedicated to youth unemployment. It will target regions within the EU that have youth unemployment rates of or in excess of 25 per cent (see regions shaded in red at Figure 3), of which there are five in the UK. The Youth Employment Initiative would allow a Member State, in agreement with the European Commission, to allocate up to 10 per cent of its funds from the initiative to young people residing in sub-regions which experience high youth unemployment, but which are not in an eligible region. In June 2013, EU Heads of States agreed to 'front-load' the 6 billion, enabling the funds to be spent in the first two years of the seven year EU MFF. In July 2013, they pledged to add an extra 2 billion to this source of funding. The European Commission's view, reinforced by László Andor, European Commissioner for Employment, Social Affairs and Inclusion, was that these funds should primarily be used to help and accelerate implementation of the Recommendations within the Youth Employment Package (see Box 4 below), in particular the Youth Guarantee.
Table 1 shows the amount available from each of the different EU funds across the EU28 and in the UK.
The 2014-2020 allocation of EU funds (in
||UK (percentage share of EU total)
|European Social Fund (ESF)
||72,349||4,385 (six per cent)
|European Regional Development Fund (ERDF)
||183,435||5,927 (three per cent)
|Youth Employment Initiative
||193 (three per cent)
|Total in Euros
||258,784||10,505 (four per cent)
Source: Regulation (EU) No 1303/2013
EU Legislative and non-legislative proposals
|The Youth Employment Package
The Youth Employment Package was proposed by the European Commission in 2012 and adopted by the Council in the same year. It is made up of a number of legislative and non-legislative policy initiatives that the European Commission strongly believes should be adopted by Member States. However, the package is not legally binding on Member States. The most significant section of the Package is the Recommendation for a Youth Guarantee.
The Youth Guarantee seeks to address youth unemployment by ensuring that all young people under 25 receive a good-quality, concrete offer of employment, continued education, apprenticeship, or training, within four months of them leaving formal education or becoming unemployed. The offer should be adapted to each individual's need and situation. Member States with regions expected to benefit from the Youth Employment Initiative were asked to submit a Youth Guarantee Implementation plan by the end of December 2013, linked to their plans for spending the Youth Employment Initiative funds described in Box 3. The Youth Employment Package also called for the creation of a Quality Framework for Apprenticeships and a European Alliance for Apprenticeships (see Chapter 6, Box 7).
Youth on the Move is a comprehensive package of policy initiatives on the education and employment of young people, with a focus on mobility within Europe. It includes the Youth Opportunities Initiative, which encourages national governments to make increased use of the ESF to set up apprenticeship schemes. Youth on the Move also established EURES, an online portal that aims to match young people to job vacancies throughout the EU.
Erasmus+ is the EU's programme for the mobility of EU citizens for the purposes of education and training at all levels, including school education, higher education, international higher education, vocational education and training and adult learning. It also focuses on youth, particularly in the context of non-formal learning; and sport, in particular grassroots sport. The programme aims to provide opportunities for over four million EU citizens during the period from 1 January 2014 to 31 December 2020. The budget for the seven year programme is 14.7 billion; a 40 per cent increase on the previous programme.
Action Teams were set up in February 2012 for the eight Member States with the highest level of youth unemployment at the time to mobilise funding still available within the 2007-2013 ESF and ERDF. The EU has reallocated nearly 600 million to specific actions for the most vulnerable groups in those countries, which include the young unemployed.
Is EU action appropriate?
41. The preponderance of evidence received suggested
that action at EU level to reduce youth unemployment was necessary
because of both the scale and the EU-wide nature of the problem.
The Belgian House of Representatives said that youth unemployment
in one country has a negative impact on the rest of the EU, threatening
social cohesion, growth and market demand.
Professor Maguire and Derek Vaughan MEP said that, in many
Member States, welfare cuts had resulted in less funding for initiatives
targeted at reducing youth unemployment, meaning that EU funding
was needed to fill the gaps.
42. A small number of witnesses were less enthusiastic
about the value of EU action in this area. Esther McVey MP, the
UK Minister of State for Employment, said that "the primary
responsibility for tackling youth unemployment rests with the
Lord Heseltine argued that the problems of youth unemployment
"should be addressed by people who live in an area, know
it and understand it", a view with which Derek Vaughan MEP
agreed. While Emma
McClarkin MEP supported EU programmes that helped entrepreneurs
to grow, she pointed out that most of the EU funding allocated
to address youth unemployment would be allocated to countries
with a much higher youth unemployment rate than the UK.
43. We acknowledge that responsibility for
dealing with youth unemployment rests primarily with Member States,
and the key measures to address the issue should be introduced
at national level. However, we believe it is both important and
appropriate that the EU continues to have a role in providing
funding and other forms of support to reduce youth unemployment.
There are benefits from Member States coordinating responses to
the youth unemployment situation, through the sharing of good
practice (see Chapter 7) and the use of EU funds for specific
tasks which complement action at national level, such as kick-starting
Effectiveness of EU funds to
address youth unemployment
44. The European Youth Forum, the UK-based Trade
Union Congress (TUC) and the EU-based European Trade Union Confederation
(ETUC) agreed that the 6-8 billion available through the
Youth Employment Initiative was not enough to address youth unemployment
in the EU, given the scale of the problem.
The European Youth Forum and the ETUC
referred to the 2012 report by the ILO's International Institute
for Labour Studies which estimated that around 21 billion
would be needed to implement the Youth Guarantee effectively.
The Institute of Employment Studies said that the proposed funding
should be judged against the high cost of NEETs across the EU
Member States, which had been estimated at around 1.51 per cent
of the EU's Gross Domestic Product (GDP).
45. The European Commission said that because
of cuts to the ESF budget there was less money available to address
youth unemployment in 2014-2020 than there had been in the 2007-2013
period, even taking into account the additional funding from the
Youth Employment Initiative.
Max Uebe, Head of Unit, Directorate-General, Employment and Social
Affairs, European Commission, made clear that "EU funding
alone will not suffice" for the implementation of a Youth
Guarantee and that national investment would be required.
His view, however, was that an early injection of EU funds had
the potential to kick-start actions at Member State level, providing
immediate investment resources and a spur to Member State action.
46. A number of witnesses emphasised that the
funding should be spent in a way that added value to initiatives
at national level. Business Europe, an organisation that represents
businesses at an EU level, said that EU money "should be
targeted on seed funding and initial establishment and development
rather than [used] over a long-term period."
The Greek Ambassador to the UK said that, in Greece, EU funding
and expertise had acted as a catalyst to initiatives at national
level. The Greater
London Authority and Heart of the South West, the Local Enterprise
Partnership (LEP) for Devon, Plymouth, Somerset and Torbay, appreciated
the capacity for EU funds to add value to domestic funds, by targeting
different groups and trying different strategies.
47. Derek Vaughan MEP and the Department for
Employment and Learning in Northern Ireland (DELNI) expressed
concern that the Youth Employment Initiative would only be available
to regions with an unemployment rate of more than 25 per cent.
The Greater London Authority said that there was a particular
difficulty in London because the funds would only apply to Inner
London, where the unemployment rate was 25.7 per cent, despite
youth unemployment in Outer London being at 23.3 per cent.
It said that greater flexibility with respect to the threshold
could benefit those regions that fall slightly under the 25 per
cent threshold, of which there were a number in the UK. It suggested
that the UK Government should use the flexibility it had to allocate
up to 10 per cent of the Youth Employment Initiative to regions
that did not meet the 25 per cent mark, for Outer London.
On the other hand, Phil Bennion MEP said that the 25 per cent
threshold would provide a clear focus for the small amount of
funding, allowing it to be directed to those regions that needed
it most in order to implement the necessary programmes to address
youth unemployment. He agreed that it was important that regions
with an unemployment rate of less than 25 per cent were not ignored
and proposed that the ESF could be used to support these regions.
48. EU funds are limited in comparison with
the scale of the crisis and with the amount that Member States
have already pledged to address youth unemployment. EU funding
should not be used to subsidise national approaches, but should
be put towards establishing new initiatives and trying new methods,
including those that have been successfully pioneered in other
countries or regions worldwide. Where useful, it should be used
to facilitate longer-term project cycles.
49. It is right that the Youth Employment
Initiative targets EU regions that are experiencing the highest
levels of unemployment. Given the finite resources available and
the importance of the resources attaining maximum impact, we recommend
that the UK Government focus the funding available from the Youth
Employment Initiative wholly on the five areas identified in the
UK. The Government should use the European Social Fund and government
spending to target those areas, such as Outer London, that are
experiencing high unemployment but are not eligible to receive
funding from the Youth Employment Initiative.
Evaluating the use of the EU
50. We received evidence from witnesses suggesting
that there should be a better evaluation of the success of EU
funds. Professor Simms and the Higher Education Careers Service
Unit (HECSU) said that labour market initiatives were rarely evaluated
systematically and longitudinally (on a long-term basis) by the
EU and Member States,
to assess "deadweight costs" or surplus spending.
The Institute for Employment Studies said that, despite the growing
evidence base of research and evaluation studies of EU funded
projects aimed at tackling youth unemployment, there were some
issues that warranted immediate attention. It said, "many
evaluations do not provide even the most basic information on
the results (achieving sustainable job entry) and the cost of
achieving these results".
It proposed that evaluation could be improved in three key ways.
First, qualitative rather than quantitative results needed to
be consideredwhether a programme had genuinely improved
the labour market situation of the particular group, rather than
the cost of the programmes measured against the number of participants.
Secondly, efforts should be made to understand the effects of
the programmes beyond participants. Thirdly, there should be more
research into the long-term costs and benefits of a programme
and how this related to the initial spending of programmes. The
Institute for Employment Studies also pointed out that the European
Commission itself, as well as its appointed Expert Evaluation
Network, had found problems with the evaluation of the ESF.
51. In the 2010 report, Making it work: the
European Social Fund, we found that there was substantial
room for improvement how the ESF is evaluated. We consider that
these conclusions are still valid and that further work in this
area is necessary.
52. We recommend that there should be a move
away from evaluating European Social Fund schemes based on the
cost and number of participants. The European Commission should
instead move towards an evaluation of programmes that looks at
their impact on the youth job market in real terms, over a long
period of time and prioritises understanding how and why actions
are successful, not just whether they are. The European Commission
should report to Member States on these evaluations at least every
53. Many witnesses viewed the principle of a
Youth Guarantee in a positive light. Eurofound said that the Youth
Guarantee structure necessitated intervention "before disengagement
sets in, and thus prevented long-term unemployment".
It described the Nordic countries
as "pioneers" of Youth Guarantee schemes and said that
the EU's proposal for a Youth Guarantee was based on the success
of similar schemes, such as that of Finland. It said that Finland's
Youth Guarantee was the reason for its very low rate of long-term
unemployment among young people. Eurofound also said that one
of the important benefits of this type of Youth Guarantee was
that it addressed the different needs of unemployed young people
by using an individualised assessment to determine whether a job,
apprenticeship or further education was appropriate for them.
54. Other witnesses expressed support for early
intervention to address youth unemployment. Mike Thompson, Head
of Employability and Early Career Programmes, Barclays, said that
ideally, young people should be guaranteed a place in further
education, training or employment "from day one of leaving
education", although he accepted this might not be practical.
The UK Government said that they had reservations about the "cost-effectiveness"
of the EU's blanket provision that support should be provided
after four months. This was based on the UK's experience that
most young people were able to find work without support shortly
after that period.
The UK Government said that, although they did not have evidence
on the average period for finding work in other Member States,
the differences in the structure of unemployment benefits meant
that it was unclear what would be the "right" length
of time for a Youth Guarantee.
They also said that "it is more useful to find an appropriate
opportunity for the individual at a time that is right for them,
depending on their specific situation and needs rather than offering
a blanket guarantee at a fixed point in time".
The UK Government's views on the interaction of the Youth Guarantee
with UK measures to address youth unemployment are addressed in
55. The NUS disagreed with the Government's view
that early intervention was not cost effective and was of the
opinion that in the UK, where there was no Youth Guarantee, young
people were forced to "languish in unemployment
help is available to them".
Witnesses from the business sector expressed similar views when
considering the efficacy of early intervention via a Youth Guarantee.
Terry Morgan, Chairman of Crossrail, said that "there is
no doubt in my mind that youngsters leaving school without having
an opportunity to work will leave a scar on their life and we
have a responsibility to try to deal with that".
Tanith Dodge, Director of Human Resources at Marks and Spencer,
a pan-EU employer, said: "I think the principle [of the Youth
Guarantee] has to be right. It is how we make it work
is the 'what next?'"
56. The cost of the Youth Guarantee was also
an issue (see paragraph 44). The Institute of Employment
Studies said that although the Youth Guarantee had proved to be
an effective way of integrating young people into the labour market,
it bore significant financial costs to governments, which could
make its implementation challenging in several Member States.
Similarly, Eurofound said that countries with a high rate of youth
unemployment and poorly developed employment services would face
particularly high costs in implementing the Youth Guarantee. It
said that the Youth Guarantee would not be a universal remedy,
in that it was dependent on Member States removing structural
problems in the labour market and ensuring the availability of
opportunities for young people.
57. The majority of the evidence we received
suggests that the Youth Guarantee is a very useful initiative,
which responds to the need for early intervention with young people
to prevent them becoming unemployed in the long-term, which can
have scarring effects. Implementation of the Youth Guarantee would
help to address the current particularly high levels of youth
unemployment, but should be accompanied by other measures that
seek to remove the underlying structural problems related to the
youth labour market in Member States such as the UK.
58. Having regard to the success of Youth
Guarantees in other Member States, we believe that the successful
implementation of a Youth Guarantee could provide Member States
with a clear benchmark to work towards in terms of avoiding long-term
Flexibility of EU measures
59. The UK Government said that proposals such
as the Youth Guarantee and the Quality Framework for Traineeships
(see Chapter 6, Box 7) were over-prescriptive.
However, Commissioner Andor said that the European Commission
used non-legally binding Recommendations rather than legislation
in order to provide Member States with enough flexibility to take
into account national circumstances.
Max Uebe, European Commission, said that "Member States are
committed to ensure that all young people up to 25 [are in employment,
education or training] within four months. How they achieve it,
honestly we do not care at all."
Indeed, the TUC said that the Recommendation for a Youth Guarantee
was too flexible and that implementation of a Youth Guarantee
should be a requirement for Member States to access the funding
available under the Youth Employment Initiative.
60. EU proposals to address youth unemployment
strike a good balance between setting out an EU strategy to reduce
unemployment (based on the good practice of different Member States)
and allowing individual Member States to tailor EU funding and
proposals to specific national circumstances.
52 Articles 2-6, Treaty on the Functioning of the European
Article 5(2), Treaty on the Functioning of the European Union.
The Treaty on the Functioning of the European Union (TFEU) came
into force on 1 December 2009 following the ratification of the
Treaty of Lisbon, which made amendments to the Treaty on European
Union (TEC) and the Treaty establishing the European Community.
The TFEU is an amended and renamed version of the TEC. Back
Title IX, Treaty on the Functioning of the European Union. Back
Article 149, Treaty on the Functioning of the European Union. Back
European Commission , 'Europe 2020',
European Commission , 'youth unemployment', available at:
The Multiannual Financial Framework is a spending plan that translates
the EU priorities into financial terms. It is not a seven year
budget, but the basis for the annual budgetary exercise. Back
Regulation (EU) No 1303/2013 and Regulation (EU) No 1304/2013 Back
European Commission (2013), EU measures to tackle youth unemployment. Back
Regulation (EU) No 1303/2013; Regulation (EU) No 1301/2013 Back
Regulation (EC) No. 1080/2006 Back
Eurostat figures have been used to allocate the 6bn Youth
Employment Initiative funds to areas with a youth unemployment
rate greater than 25 per cent. The five areas in the UK are: Merseyside;
West Midlands; Tees Valley and Durham; South West Scotland; and
Inner London. Back
Q 191 Back
ESF and ERDF figures assume spending is at the regulatory minimum. Back
For the period 2014-20, Youth Employment Initiative funding will
comprise 3 billion from the ESF and 3 billion from
a specific budget line dedicated to youth unemployment. Back
Council Recommendation No. 2013/C 120/01 Back
COM(2013) 857 final Back
European Commission website, 'European Alliance for Apprenticeships',
COM(2011) 933 final Back
Greece, Ireland, Italy, Latvia, Lithuania, Portugal, Slovakia
and Spain. Back
Belgian House of Representatives; Derek Vaughan MEP; Professor
Melanie Simms; Institute for Employment Studies; Youth Enterprise
and Unemployment; Prospects; Employment Pathways; ETUC; Rathbone
Belgian House of Representatives Back
Q 24; Derek Vaughan MEP Back
Q 234 Back
Q 262; Derek Vaughan MEP Back
Emma McClarkin MEP Back
Q 216; Q 82; Q 204; Institute of Employment Studies Back
Q 204; Q 216 Back
International Institute for Labour Studies (2012), Eurozone
job crisis: trends and policy responses Back
Institute for Employment Studies Back
Q 191 Back
Q 183 Back
Q 216 Back
Greek Ambassador to the UK Back
Heart of the South West Local Enterprise Partnership; Q 34 Back
Derek Vaughan MEP; Q 64. As noted in Box 3, the Youth Employment
Initiative would allow a Member State, in agreement with the European
Commission, to allocate up to 10 per cent of its funds from the
initiative to young people residing in sub-regions which are experiencing
high youth unemployment, but which are not in an eligible region. Back
For regional figures see Eurostat (May 2013) 'News Release', available
Q 44 Back
Phil Bennion MEP Back
A longitudinal study is a correlational research study that involves
repeated observations of the same variables over long periods
of time-often many decades. It is a type of observational study. Back
Professor Melanie Simms; HECSU Back
Institute for Employment Studies Back
House of Lords European Union Select Committee, Making it work:
the European Social Fund (9th Report, Session 2009-10, HL
Paper 92-I) Back
Sweden, Norway, Denmark and Finland. Back
Q 105 Back
Q 5 Back
UK Government Back
Q 129 Back
Q 93 Back
Institute of Employment Studies Back
Q 245; Q 6 Back
Q 190 Back
Q 184 Back
Q 82 Back