Explanatory Memorandum to COM(2008)813 - Amendment of Regulation (EC) No 1081/2006 on the European Social Fund to extend the types of costs eligible for a contribution from the ESF - Main contents
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| dossier | COM(2008)813 - Amendment of Regulation (EC) No 1081/2006 on the European Social Fund to extend the types of costs eligible for a ... |
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| source | COM(2008)813  |
| date | 26-11-2008 |
The purpose of the proposal is to introduce a simplification into the operations of the European Social Fund.
- General context: New challenges for the future ESF
The European Social Fund (ESF) is set up under Article 146 of the Treaty, which gives it the objective of helping to make the employment of workers easier, and of increasing their geographical and occupational mobility. It thereby also contributes to the economic and social cohesion objective set out in Article 158 of the EC Treaty, by supporting policies and priorities aimed at achieving progress towards full employment, the improvement of quality and productivity at work, and the promotion of social inclusion and cohesion, in line with the guidelines and recommendations under the European Employment Strategy (EES).
The current financial crisis and economic downturn are rapidly increasing competitive pressures on businesses in Europe, and have a negative impact on public budgets. In numerous Member States growth has reduced significantly; in some it has even come to a halt. Unemployment figures are starting to rise.
It is critically important in this context that the European Social Fund is used to its full potential to alleviate problems of the unemployed, in particular the most vulnerable, in the economic downturn. Everything must be done to encourage the effective, efficient and fast uptake of available resources, although without compromising the principles of sound financial management. In this framework the aim of this proposal is to add a further, simpler, method of spending the European Social Fund, so that its contribution to addressing the economic and social challenges facing Europe can be faster and more effective.
Simplification has repeatedly been identified by the European Parliament as a key issue for the Structural Funds. The European Court of Auditors, in its Annual Report on the Implementation of the 2007 Budget made an important recommendation in this respect. It recommends a simplification of "the basis of calculation of eligible cost, and making greater use of lump sum or flat rate payments instead of reimbursement of 'real costs " i. Flat-rate payments from ESF have been possible for indirect costs since 2007; 23 Member States will take advantage of this provision. However, payment of lump sums is not yet eligible within the ESF rules. This proposal aims to extend flat-rate financing to direct costs; to widen its scope to scales of standardised units of cost; and to enable the use of lump sum payment systems.
The proposal will not alter the focus of the European Social Fund regulation on the four key areas for action endorsed by the European Council: increasing adaptability or workers and enterprises; enhancing access to employment, preventing unemployment, prolonging working lives and increasing participation in the labour market; reinforcing social inclusion by promoting the integration in work of disadvantaged people and combating discrimination; and promoting partnership for reform in the fields of employment and inclusion.
In the least prosperous regions and Member States, the Structural Funds will continue to concentrate on promoting structural adjustment, growth and job creation. To this end, under the Convergence objective, in addition to the above-mentioned priorities, the ESF will continue to support action to expand and improve investment in human capital, in particular by improving education and training systems, and action aimed at developing institutional capacity and the efficiency of public administrations, at national, regional and local level. Lastly, the proposal does not alter the attention devoted to the Union's commitment towards the elimination of inequalities between women and men, and promoting good governance. The involvement of the social partners remains of particular importance in the implementation of the Fund priorities and operations, and notably, if required due to the present economic situation, in the partial re-programming of European Social Fund programmes.
In parallel to this proposal the Commission is proposing some changes to the Structural Funds Regulations (in particular, to the General Regulation) to enable them to be used in the most effective manner possible as part of the response to the crisis. One issue which will affect the ESF is the proposal that increased advance payments should be made available to Managing Authorities, to ensure that they can kick-start new operations.
- Consistency with the other policies and objectives of the Union
N/A
- Summary of the proposed action
The proposed action aims to amend the ESF Regulation to introduce elements necessary to the simplification of its administration and use.
- Legal basis
The proposal is based on Article 148 EC Treaty.
- Subsidiarity principle
The subsidiarity principle does not apply, in that the proposal falls under the exclusive competence of the Community