Unleashing the potential of Civil Cociety in EU programmes 2014


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The position of Civil Society Organisations (NCVO) in response to the draft legislative package of the EU structural funds.

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Unleashing the potential of Civil Cociety in EU programmes 2014

  1. 1. Unleashing the potential of Civil Society in the EU programmes 2014-20 1
  2. 2. BackgroundThe earliest discussions for the new structural funds summarised in the Barca report in 2010set out a new approach to Cohesion policy designed to deliver the Europe 2020 Strategy ofsmart, sustainable and inclusive growth. This included support for allocations of a large shareof the EU budget to „place based development strategy‟; a strategic focus on economic andsocial goals; a concentration on key priorities along with simplification and efficiency and agreater focus on the environment, climate change and sustainable transport.In addition there was an agreement that the deployment of all funds CF, ESF, ERDF, EAFRDand EMFF towards these common goals outlined in EU 2020 would maximise the impact ofEU funding. Thus a general regulation to allow various funds to work alongside each otherwas agreed. Extract from Common regulation „To be able to deliver greater European added value, the structural programmes need toboth: a) concentrate their support on EU priorities and b) coordinate with other EU policiesand financial instruments. The Europe 2020 Strategy provides a clear set of commonobjectives, including headline targets and flagship initiatives, as a clear framework foridentification of funding priorities.These recommendations are now enshrined in the proposals for 2014, including interalia themenu of thematic objectives (see below) greater use of simplified costs and proportionalapproach to control. A menu of thematic objectives • Research & innovation • Information and communication technologies (ICT) • Competitiveness of Small and Medium-sized Enterprises (SMEs) • Shift towards a low-carbon economy • Climate change adaptation & risk prevention and management • Environmental protection & resource efficiency • Sustainable transport & removing bottlenecks in key network infrastructures • Employment & supporting labour mobility • Social inclusion & combating poverty • Education, skills & lifelong learning • Institutional capacity building & efficient public administrations European Union Cohesion Policy │ 13 2
  3. 3. In particular, the reinforced social dimension for the Structural Funds and innovative deliverymechanisms offer opportunities for Civil Society organisations and social enterprise agenciesto play a fuller part in the delivery of this programme than has been the case in the currentprogramme.Such organisations historically played a significant part in the delivery of activities in previousprogrammes using support from the Structural funds, in particular for communities, both ofplace (urban and rural areas) and type (those facing multiple disadvantages). This papersets out to respond to the proposals from the European Commission to describe the role theycould play in the delivery of the new programmes and some mechanisms that could promotetheir involvement. It seeks to examine the performance evidence of the current programme,identifying examples of good practice where they exist and suggesting new approaches tohelp deliver the aspirations in the new programme.Support for the Commission’s proposal to ring-fence at least 20% of ESF for socialinclusion and anti-povertyCivil Society supports the European Commission‟s proposal to ring-fence 20% of the ESFallocation for an anti-poverty/social inclusion priority, in order to bring about a„transformational‟ change to the opportunities available to socially, financially and digitallyexcluded people, to ensure that they are not left behind by the pace of developments in IT,innovation, R&D and SME Competitiveness.We welcome the proposal to designate funds together with synergetic use of other funds, toactively combating poverty and building Social Inclusion. We believe this is an essentialcontribution to developing Social Cohesion and ensuring equality of access and opportunity inand between Member States.Evidence from the current programme, out with Convergence areas suggests that targets forthose, with disabilities, over 50 and women are not being met in the programme(1).It shows why it is vital to ring-fence 20% of ESF for social inclusion and poverty reduction-currently only 12% of ESF, across the EU is being used for social inclusion and the EuropeanCommission has recognised the need to improve on this(2).Civil Society believes the earmarking mechanism is the most powerful way to ensure adecisive and even contribution of the ESF to the EU poverty reduction target that MemberStates agreed to throughout the EU, in the autumn of 2010.(1) Progress Report to Monitoring Committee March 2012(2) European Commission, Cohesion Policy Strategic Report 2010, p.3: “progress on delivery the priority ofSocial Inclusion is relatively slow and not spread evenly across the funds and programmes”.http://ec.europa.eu/regional_policy/sources/docoffic/official/communic/reporting2010/com_2010_110_en.pdf 3
  4. 4. Furthermore the economic and social context across the EU is dominated by an increase inpoverty and social exclusion as result of the economic crisis and austerity measuresundertaken by all governments. This is leading to an even greater need for resources to bededicated to achieving social inclusion, while defending social protection systems and socialservices. .There is growing inequality in our society and the widening of the gap between the rich andthe poor. We need to be able to use these funds (minimum 20%) to redress the balancethrough activities delivered by the Third Sector.The target group for this priority are those for whom mainstream public services – education,employment, social services, housing etc – have failed or who have become disenfranchised,and this is the rationale for investment.The role of the social economy in addressing market failure to deliver genuinely citizen-centred services, as well as facilitating community regeneration and promoting localemployment opportunities, is an area with potential for significant growth.To make most effective use of the ESF available clear links should be made between theESF priority for social inclusion/anti-poverty with any complementary ESF or ERDFinvestment in employment, job creation schemes, digital inclusion, social enterprise and localregeneration activities.The Civil Society and Social Enterprise Sectors have very considerable experience andexpertise in this field, not restricted to front-end delivery but also encompassing design of action,programme development and management arrangements. The sector believes that SocialInclusion work requires a different portfolio of interventions, working with a different range ofbeneficiaries to different (interim, at least) outcomes than any other work within the structuralfunds. Further - these actions are best made through very local bodies – ideally organised byexcluded people themselves supported flexibly to solve the specific problems within eachcommunity.It is absolutely essential to mobilise and empower excluded people themselves to mount theirown projects to overcome exclusion. They should shape the design, programation, procurementand management arrangements for an Inclusion Priority – not the other way round.Social Inclusion – despite some surprising early outcomes – is usually a 2 or 3 stagedevelopment requiring different specific support for  Social Capital work, mobilising Local excluded Communities.  Building local capacity for Employability Projects based on the new Social Capital established above.  Effecting Employment and Skills activity. Using this capacity and then linking with more general employment support projects.We have found that each of these stages is a very specialist activity requiring local support forexcluded communities. They actually suffer if organised within the projects with more generalaims. 4
  5. 5. Support Community Led Development and Rural Development Programmes:Over the past 20 years, the LEADER approach(3) to community-led local development(CLLD) – based on the experience of an initiative financed by EU Structural Funds, designedto help rural actors consider the long-term potential of their local region, has proven aneffective and efficient tool in the delivery of development policies. The EuropeanCommission has promoted this delivery method through other Community Initiatives also,such as EQUAL (4) and URBAN (5). In the case of LEADER, for which continuous EUsupport has been provided since 1991, it has become an important element of ruraldevelopment policy with a high level of acceptance all over Europe.The draft regulation (Articles 28-31) for future CLLD is based on the LEADER approach andconcerns all the Funds covered by the Common Strategic Framework in the 2014-2020programming period (the CSF Funds).CLLD is a specific tool for use at sub-regional level, which is complementary to otherdevelopment support at local level. CLLD can mobilise and involve local communities andorganisations to contribute to achieving the Europe 2020 Strategy goals of smart, sustainableand inclusive growth, fostering territorial cohesion and reaching specific policy objectives.The main aims of the Commission proposal are to simplify and expand the use of CLLD as adevelopment tool. The CLLD proposals will: encourage local communities to develop integrated bottom-up approaches in circumstances where there is a need to respond to territorial and local challenges calling for structural change; build community capacity and stimulate innovation (including social innovation), entrepreneurship and capacity for change by encouraging the development and discovery of untapped potential from within communities and territories; promote community ownership by increasing participation within communities and build the sense of involvement and ownership that can increase the effectiveness of EU policies; and assist multi-level governance by providing a route for local communities to fully take part in shaping the implementation of EU objectives in all areas.Key components of community-led local development are:  local action groups: these should be made up of representatives of local public and private socio-economic interests, such as entrepreneurs and their associations, local authorities, neighbourhood or rural associations, groups of citizens (such as minorities, senior citizens, women/men, youth, entrepreneurs, etc.), community and voluntary organisations, etc. Civil Society and private sector partners should have at(3) LEADER: Liaison Entre Actions pour le Développement de l’Economie Rurale – Links between the ruraleconomy and development actions.(4) EQUAL Initiative of the ESF focused on supporting innovative, transnational projects aimed at tacklingdiscrimination and disadvantage in the labour market from 2000-2006.(5) URBAN II Community Initiative of the ERDF supported innovative strategies for sustainable economic andsocial regeneration in a limited number of urban areas throughout Europe from 2000-2006; the URBANCommunity Initiative ran from 1994-1999. 5
  6. 6. least 50 % of the decision-making power and no single interest group should have more than 49 % of the votes.  local development strategies: these need to be coherent with the relevant programmes of the CSF Funds through which they are supported. They should define the area and population covered by the strategy; include an analysis of the development needs and potential of the area, including a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis; and describe the objectives, as well as the integrated and innovative character of the strategy, including targets for outputs or results. The strategies should also include an action plan demonstrating how objectives are translated into concrete projects, management and monitoring arrangements, and a financial plan.Whilst there is little evidence of this specific approach in England, outside the RuralDevelopment Programme, such activity, as noted was present in previous programmes and wasthe subject of rigorous evaluation. Equally it would seem highly congruent with the Coalitiongovernments Big Society and Localism policies. Further, drawing predominantly on previousexperience, we would also propose using the experience of the Catalyst Evaluation, to designpriorities that can deliver distinctive and effective Inclusion work, ensuring small projectscomprise the entirety of the Priority‟s provision, and providing a substantial component and path-finding example of working through community-led development. We believe Intermediary Bodyarrangements with experience of community empowerment work would afford the best hope ofachieving success comparable to the example given and we believe that experience to do thatalready exists in our sector.Civil Society and Social Enterprise Sectors also welcome the European Commission‟slegislative proposals for 5% of funds to be ring-fenced for LEADER projects, but suggeststhis should be the minimum level, with consideration given to ring-fencing a higher proportionof the budget for LEADER activities in order to facilitate community involvement in ruraldevelopment.The LEADER approach could be strengthened by putting in place criteria to ensure thatcommunities, and third sector organisations as their representatives, are engaged on a fairand equal basis in partnership arrangements. The LEADER approach should remain open tosupporting small scale local interventions.Experience has shown that pre- and post-approval hand-holding support from ProjectOfficers employed to work with applicants to Rural Development Programme small grantsschemes has worked well. In Wales County voluntary councils (CVCs) have also providedsupport informally at local level for third sector applicants to the RDP, but in many cases thisrole has not been formally recognised or funded. A formal structure should be put in place toprovide information, advice and support tailored to the needs of third sector applicants to theRDP, and on-going support during project implementation.WCVA‟s third sector European team (3-SET) provides a valuable technical support servicefor third sector applicants to the Structural Funds programmes. It is recommended that asimilar service be put in place for the RDP in the new programmes. 6
  7. 7. Direct Access to funding for Civil Society:The involvement of the Civil Society and social enterprise sector in the EU Structural Fundsacross the UK is long standing both at the strategic level as active members of monitoringcommittees and at the implementation level as promoters of projects.This is a reflection of the trust placed by authorities in the ability of the sector to engageand meet the needs of those furthest from the labour market, often through holistic andinnovative intervention thus contributing to the achievements of the objectives of EUstructural funds programmes particularly on social exclusion. But is also recognition that thesector, particularly the social enterprise movement, can be a major contributor toeconomic growth and job creation.Empirical evidence from the 2000-06 ESF Programme, suggests that under Policy Field 2,dedicated to „third sector‟ interventions with those furthest from the labour market, between2000 and 2003, a total of 160,000 beneficiaries were engaged through 740 projects. Over15% of the beneficiaries gained employment and 22 % gained a qualification.However, the ability of the sector to fully contribute its expertise and talents has beeneroded in the current ESF Programme.The UK government‟s drive for greater administrative efficiency has resulted in theintroduction of co-finance and large contracts based on payments for jobs and skillsoutcomes. The strategic focus on those furthest from the labour market in the 2007-13 ESFprogramme is retained by the positive rhetoric but by and large this is not matched byspecific interventions and outcomes appropriate to their multiple needs such as softoutcomes and distance travelled (although the new DWP Families programme goes someway to re-introduce a social justice element to ESF interventions).This appears to be more the case in England than the other nations. For instance in Walesthe WCVA is engaged in large strategic projects designed to facilitate access to Civil Societyorganisations to promote social inclusion projects including ILM (Intermediate Labour Market)initiatives. Notably volunteer time is used as match funding in Wales where this in not thecase in Scotland, Northern Ireland or England. Direct national projects operated by CivilSociety groups for those furthest from the labour market are also a feature of programmes inNorthern Ireland and Scotland, but not the case in England.In England the risks associated with payment by results, the perceived scale of bureaucracyand the absence of a specific priority focussing on those furthest from the labour market havesqueezed out some of the smaller providers, but even the biggest charities find theopportunities on offer, for instance by the Work Programme, inaccessible due to the sheersize of contracts and associated financial risks.Analysis of datasets for the first half of the programme in England confirms that smaller CivilSociety organisations have been „squeezed out‟ not only at the primary contracting but alsoat the sub-contracting levels possibly undermining the ability of the ESF programme totarget effectively those furthest from the labour market. The risk of cherry picking thosecloser to the labour market remains high as the focus on hard outcomes could embed a 7
  8. 8. tendency to work with those closer to the labour market. The economic downturn has alreadyled to a partial refocus towards those closer to the labour market as evidenced by a recentevaluation by the ESFD summarised in box 1:Box 1Early impacts of the European Social Fund‟ focussing on DWP interventions in the first half ofthe programme indicate that by November 2009 participants starts were 98,000 of which70% were claiming JSA, 50% of whom had been claiming benefits for less than threemonths. The remaining 30% were on Incapacity Benefit, ESA or Income Support, clientswho are recognised to be further away from the labour market. However, the reporthighlights that ‘ESF provision has low impacts on JSA recipients but it is far moreeffective for Incapacity Benefit and ESA recipients’ in other words the report suggeststhat many JSA customers could have achieved jobs without the additional supportprovided by ESF. Recent Work Programme statistics confirm that this trend iscontinuing with 95% of engaged clients from JSA customer groups and only 1% fromthe IB/IS ESF funded groups.Qualitative research carried out by TSEN into the experience of Civil Society sub-contractorsin the current ESF programme, points out that the sub-contractors recognised for theirspecialist expertise are largely excluded from the design of services they will deliver; thatcontractual requirements and targets are narrowly specified and sometimes compromise theability of organisations to work effectively with disadvantaged clients; that more could bedone to reward soft outcomes; and that payment delays and „end loading‟ need to beaddressed.The research finding concluded that potential improvements to the programme shouldinclude increasing the value of contracts available directly to smaller Civil Societyorganisations for example through raising the value of Community Grants to avoid the loss ofcontrol experienced by sub-contractors.Community Grants:This is a small grants scheme that builds on the experience of the very successful GlobalGrants initiative under the 2000-2006 ESF Programme. The programme is designedspecifically for „small third sector organisations‟ that would otherwise not be able to accessmainstream ESF. Each grant is worth up to £12,000 and organisations apply for it to „GrantsCo-ordinating Bodies‟. The grants are designed to work with the disadvantaged and helpthem move closer to the labour market; the outcomes are more likely to be about progressionthan hard job and qualification outcomes. However evaluation of the Catalyst Global GrantsProgramme demonstrated that empowering disadvantaged communities to identify their ownneeds and helping them to find solutions, resulted in 76% of participants engaging in someform of economic activity including jobs, training and volunteering.The ESF draft regulations for the next programme makes specific references to global grantsas a mechanism to ensure involvement of NGOs in the implementation of operationalprogrammes in addition to simplified cost options (standard scales of unit costs, flat rates orlump sums) for grants for which the public support is between €50,00 and €100,000. 8
  9. 9. We would like to encourage managing authorities to consider increasing the size of globalgrants to a maximum of €100k as one of the key tools to ensure direct access to the funds forCivil Society organisations to help the programme deliver on its commitment to combatpoverty and promote social inclusion.Civil Society agencies as Intermediary Bodies:The Welsh experience in the current programme is helpful, through the implementation of aPortal Project (The Engagement Gateway) operated by WCVA enables Civil Society tobecome a key stakeholder in the design, monitoring and delivery of the Structural Fundsprogrammes in Wales:The Engagement Gateway was made possible by match funding from the WelshGovernment and adhered to the principles of a work progression model, which emphasisesthe development of the individual customer. It was built on the successful elements of thesocial inclusion priority under the Objective 1 programme and created multi-layered fundingopportunities through three tiers of ESF funding from less than £25,000 through to £150,000via tendering / procurement processes.The project operates under Priority 2 Theme 1 funding of the Convergence programme andPriority 1 of the East Wales Regional Competitiveness and Employment OperationalProgramme.The project has been designed to link those organisations providing support to 32,000individuals furthest from the labour market and enable them to provide routes into eithermainstream activity or activities nearer the mainstream. The intention is to deliver a coherentapproach to providing a labour market pre-engagement strategy and an open andtransparent, but managed, process through which a wide range of organisations will be ableto make a valid contribution to the Structural Funds programmes.The intention is to create a flexible tendering process that links innovative actions engagingwith those furthest to reach to mainstream strategies and programmes. Prime exampleswould include:  Tendering for activity in specific geographical areas such as “Heads of the Valley” or the North Wales Labour Market Intermediary.  Tendering for activity that will address the complex needs of specific client groups due to their economic, social and family circumstances (e.g. learning difficulties, drug/alcohol dependency, low skills and self-esteem etc.). The focus will be on facilitating referral into specialist services or projects in order to provide an individually tailored programme of personal and skills development.  Over £96.4 million of EU funds have been committed to 35 projects led by the third sector under the Structural Funds programmes 2007-2013. Through volunteer time and other forms of match funding, this will generate a total investment of £176.1m.  This equates to 14% of the total number of projects approved by WEFO (and 6% of the funds available), with the remaining 81% of projects led by the public sector (92% of the funds) and 5% by the private sector (2% of the funds).  The third sector is also involved in the delivery of EU funded contracts, having won over £77.9m worth of contracts under the 2007-2013 programmes procurement 9
  10. 10. arrangements. This equates to 16% of contracts awarded to the third sector; 28% to the public sector and 56% to the private sector.The sector is involved in delivering a wide range of European Social Fund (ESF) andEuropean Regional Development Fund (ERDF) projects, including providing specialist,innovative approaches to helping the most disadvantaged to overcome barriers toemployment, engaging with and raising the aspirations of young people who are not inemployment, education and training (NEET), supporting the advancement of women inemployment, taking forward the digital inclusion agenda, building walking and cycling routenetworks, restoring community buildings, and developing the social economy in Wales.It is really important to highlight the need for advance payments for third sector organisationsto be continued as without these it is not possible for the majority of the sector to be involvedin the programmes. The impact that volunteer time as match has in Wales is tremendouswith most organisations finding that this is key to their involvement, as are project advances,without which third sector involvement would be significantly negatively impacted.Contribution of Volunteering as a pathway to integration and employment and as cofinanceVolunteering, an activity that is freely given, without financial gain, and in a spirit of solidarityfor the benefit of the wider community has been recognised in the Structural FundsProgrammes. It has been identified as helping to combat environmental problems, as well asresponding to poverty and social exclusion, often by equipping the unemployed with newskills that help them secure jobs.A debate undertaken by policy-makers, NGOs, volunteers and academics during the „Valueof Volunteering‟ Conference in London on 2 November 2009(6), showed that, with anincrease in unemployment and the financial crisis, there has been a renewed policyemphasis in the EU on volunteering as a route to employment. The European Commission‟soriginal EU 2020 Strategy Consultation argued that having a job is probably the bestsafeguard against poverty and exclusion. However volunteering in itself ought to berecognised as an important outcome and mechanism for integration for many individuals whowould otherwise not re-engage in the life of their communities and remain socially excluded.Oxfam, in its Briefing Paper „Something for Nothing: Challenging negative attitudes to peopleliving in poverty‟(7)], reflects that, given the economic and social value of [volunteer work] tolocal communities – and the value of volunteering in terms of building an individual‟sskills and experiences – it seems obvious that Jobcentres and welfare-to-work policiesshould encourage and enable volunteering, and view it as a step towards paid employment,whilst not making that activity mandatory.(6) The event was organised through a partnership between Volonteurope, CSV, Third Sector EuropeanNetwork and the Economic and Social Research Council.(7) Oxfam (May 2010), Something for Nothing: Challenging negative attitudes to people living in poverty,http://www.oxfam.org.uk/resources/policy/right_heard/downloads/bp_something_for_nothing_200510.pdf 10
  11. 11. A report(8) prepared by the Economic and Social Research Council in November 2009showed that volunteering can not only help people into jobs, but also offers them a possibilityto change their lives for the better. It called for a more effective use of the European Socialfund (ESF) to incentivise providers to offer voluntary activity as a pathway to integration,especially for groups of people furthest from the labour market.If the EU is to achieve the ambitious objectives of the EU 2020 Strategy, which involvescreating a healthier workforce that empowers people in an inclusive society, thenvolunteering should be recognised as a valuable ingredient in all employment and socialpolicies to be adopted by European institutions in the coming years.Equally the objectives of the 2014 programmes in the themes of Social Inclusion, Action tocombat climate change, environmental protection and the promotion of sustainable transportare all volunteer rich areas. The focus on communities and the cross cutting themesaddressing non discrimination would equally benefit from volunteer involvement policy as ameans of achieving desired outcomes. Furthermore the new programme whose regulationalready includes the recognition of volunteer time as eligible match-funding – would furtherstrengthen the recognition of volunteering as a positive outcome.Using volunteer time can also facilitate the involvement of Civil Society, transforming socialaction into public service solutions. In the current programme in Wales, in particular, a bigeffort has been made to ensure third sector organisations are able to provide services andthe inclusion of volunteer time as match funding in Welsh national rules is highly significant inallowing smaller organisations close to vulnerable groups to be involved. For the funds in the next programme to reach those who are the most disadvantaged in thelabour market, a more sophisticated targeting of European funding outputs is needed – suchas voluntary activity. Allied to this the inclusion of activities led by a wide range oforganisations - Civil Society and social enterprise, small and large could be facilitated by theco production focused use of volunteer time as co finance.Technical Assistance for Civil Society from European Structural FundsCivil Society has played an important part in the effective delivery of European StructuralFunds in the UK, in particular with the European Social Fund (ESF) and the EuropeanRegional Development Fund (ERDF). We are now moving towards the next programmingperiod for such funding (2014-20).A small part of the funds (up to 4% in the current Programmes) is available for TechnicalAssistance. TA supports the effective and efficient running of the Programme, and most of itwill go to the Managing Authority, responsible for running the programme and ensuringclaims are prepared and accepted by Brussels. However, a small part of TA is available forCivil Society, and has been effective in securing the better involvement of Civil Society in(8) ESRC (November 2009), The Value of Volunteeringhttp://www.esrc.ac.uk/ESRCInfoCentre/Images/The%20Value%20of%20Volunteering%20Publication_tcm6-34855.pdf 11
  12. 12. European Programmes, in securing better delivery, especially for people and areas whichwould otherwise be difficult to reach.In the current programme, the involvement of the Sector was written into the NationalStrategic Reference Framework, and for example was referred to in the English ESFOperational Programme. Page 135, paragraph 425. “...Technical Assistance will also beavailable to third sector networks to support participation by voluntary and communityorganisations in the programme.”European Programmes do not fund 100% - there is a requirement that part of the fundingcomes not from Europe, but from the Member State itself. Thus for many projects, there willbe a 50% intervention rate from Brussels, so half of the funding will be ESF or ERDF, and theother half (called match funding) would come from Central or Local Government, orCharitable or Lottery or other UK based funding.Each Priority in a Programme will have a fixed intervention rate, and the total of all theprojects has to be within that rate (so some can be higher or lower, so long as the averagefor the Priority is within the intervention rate).It is often difficult for Civil Society Organisations to raise the match (since the funding isspecifically to make the European Programme better), and it is not effective to require CivilSociety Organisations to spend a significant amount of time fund raising to support Europe.In the past, the match funding had been provided by a voluntary levy (no longer eligible) orfunding from the Development Agencies.As we move towards the next Programmes, we need to secure a better way. Ideally a simple,easy to operate process with minimal red tape.One way would be for Voluntary Sector bids to be eligible at up to 95% from Europe (sorequiring a match of just 5% for the organisation to raise). Other applications for TA wouldtherefore have to come in at a slightly lower intervention rate (perhaps 49%) in order for theaverage to remain at 50%.The other way would be for the Technical Assistance Priority as a whole to be agreed at51%, not 50%, so that Civil Society could come in at 95%, and the other applicants at 50%.The funding for Civil Society is so small relative to the overall amount for TechnicalAssistance that a very small change - generally about 1% for other applicants allows a muchmore significant change to the relatively small amount for Civil Society.In the current ESF (and ERDF) programmes, variable intervention rates have been used, butthese have been in an ad hoc way, each one having to be negotiated individually, which hasnot been efficient. A better way, cutting down on red tape would be to use one of the twoprocedures described above. This should be built into the discussions at an early stage - wewould not anticipate any problems from the European Commission with these suggestions -indeed we think they would be welcomed, as the next Programme has a stronger role forCivil Society, reinforcing our own government‟s support for Civil Society. 12
  13. 13. Transnational ProjectsThe idea of co-operation and mutual learning between member states is a key aspect of theEuropean Union. We believe that the expression of that co-operation through jointTransnational projects using the Structural Funds is an important activity promotingunderstanding and best practice throughout the Union. We strongly support the retention ofTransnational projects in thenext Programming period.However, on the basis of The SAM Project is delivered by the CSV Media Clubhouse in Ipswich, it is avaried and committed three-year programme supported by the ESF that works to socially engageinvolvement in the past we people recovering from mental health problems. It provides support forfeel that the opportunities progress into voluntary and paid employment. The project works to integrate mental health service users into the local community through training, socialoffered for co-operation and and physical opportunities, using a holistic timetable of activities and courses.understanding is best SAM provides a safe and supported environment for participants to develop theachieved when two key necessary skills required for future volunteering and employment.principles are observed: SAM is clearly innovative in relation to its underlying model, and its ways of That all Transnational working. There are few other initiatives known which work with mental healthpartners make a significant users in such an employment focused environment, particularly where thisactive contribution to the includes users in the design and management of services. The project’s originsproject throughout. from a clear gap in local provision, combined with the quality of its partnership relationships, has led to an evident enhancement of local services for this group and improved outcomes over and above what would otherwise be That Transnational co- expected.operation and learning ismost effective when it The project’s outcomes, including 21% of beneficiaries into work as well asreaches right through the 26% into FE/Training and volunteering have exceeded their targets. Key toproject down to, and their success has been a willingness to evolve which illustrates the benefits of aespecially involving, the flexible approach and expectation of experimentation.experience of thebeneficiaries on the project. SAM’s transnational dimension is provided through its relationship to Danish organisation FIC, an NGO with a long history of employment and socialThe first of these principles inclusion work, with strong Social Partner and NGO links in Denmark and across Europe. Activities have included remote information exchange and visitswill require partners to join by SAM participants to Denmark, the most significant event being a visit by ain scoping and applying for number of SAM users, volunteers and staff to Copenhagen during 2011. Inresources for the project addition to SAM participants, the party also included a senior DWP policywhich make Transnational advisor who has worked in recent times on welfare and employment policy,co-operation a reality. We including taking part in earlier ITM networking meetings.welcome a co-ordinatedframework for this and weare especially interested inthe idea that MembersStates pick themes from ashort menu at the outset of the Programme, and on that basis actively participate in aTransnational Network under that theme.We believe consideration should be given to restrict activity in the first year of theProgramme to “foundation” work within these networks, which allows and supports local 13
  14. 14. organisations to participate in these networks, cement relationships with partners and scopeproject specifications. Only then should a call for proposal be made.We believe it is important that Transnational projects actively involve their beneficiaries andnot just their organisations in Transnational co-operation, understanding and learning.Studies of the current Programme‟s projects should be undertaken to bring forward proposalsinto how to realise this aim. The foundation phase of the thematic networks should be judgedby how much it allows local community participation in scoping projects.Contribution of the VCS to Sustainability and the EnvironmentFrom small organisations who implement ethical policies to larger campaigns to promotegreen issues and protecting the environment, Civil Society continues to contribute to theissues in a positive, constructive, and passionate way.Sustainable Development has been a feature of ESF funding for over 10 years. The sectorhas engaged consistently in projects funded by ESF that have delivered outcomes withdisadvantaged target groups in sustainable employment, job entry and training. The impacton local economies of helping disadvantaged groups such as the long term unemployed hasbeen to bring these people off benefits. These beneficiaries then contribute to the economy.Getting disadvantaged groups into with work as a route out of poverty helps the social fabricof areas of deprivation.The voluntary sector with its emphasis on social good, working with the most in need, isconsistent, other sectors do not invest in this work as it does not attract profit. The sector iswilling to stand up for those that cant stand up for themselves against vested interestsparticularly when it comes to the environment, social issues and championing theredistribution of wealth and fighting for fairness.The voluntary sector has always been progressive in areas like the environment, withexamples of ethical buying policies, recycling projects, and support for fair-trade goods. Thesector is more likely to be involved with campaign groups such as Friends of the Earth andGreenpeace and support their objectives.The voluntary sector is more likely to attract volunteers who have energy for good causes.Young volunteers are more likely to sign up to sustainable activities with the voluntary sectorthan any other sector. The idealism in the sector can draw in the next generation to harnesscontributions that they want to make to environmental and social causes in a way that noother sector can.Funding mechanisms in any future programme should encourage this activity, and not be abarrier such as the Prime Contractor private sector whose only ideal is profit. Sustainabilityand Environmental targets will not be achieved unless the voluntary sector is encouragedand enabled to be a stakeholder in delivery and have its role stifled by private led primes thatparasitically skim large management fees off of the good work of others.Economic sustainability is being encouraged through the use of financial instruments/loanfunding specifically targeted at enterprising third sector organisations (such as Communities 14
  15. 15. investment fund (CIF), in addition to specialist business support and advice services, notablyfor social enterprises and co-operatives, (such as Enterprising communities and Wales Co-operative). Co-operative businesses grew in the UK by over 4% in 2010, whereas theeconomy grew by 1.3%, which demonstrates the resilience of the co-operative model duringdifficult economic times. Therefore it is recommended that specific reference should bemade to support social enterprises and co-operatives in any future SME Competitivenesspriority. Advice and support for any organisation looking to diversify funding streams shouldalso be supported and encouraged.It is recommended that scope is included in the low carbon economy agenda for communityled schemes, including investment in the form of grants and loans to provide seed-cornfunding, as well as advice, to enable community renewable energy schemes to get off theground and fulfil their potential to generate both energy and income for local communities. In relation to the proposed priority for „Protecting the environment and promoting resourceefficiency‟, eco-system services and biodiversity should be included as eligible activities,recognising the potential health, wellbeing and economic prosperity benefits for rural areasand for the environment in relation to the Natural Environmental Framework.Social Enterprise and Social InnovationSocial enterprises and innovative forms of Civil Society organisations such as CICs(Community Interest Company) are increasingly being seen as essential to the innovationagenda in Europe.The identified capacity of Civil Society organisations and social enterprises to find newsolutions to complex problems, develop partnerships and engaging communities in coproduction and finding innovative financial solutions will make them prime actors followingthe launch of the Social Business Initiative by DG Business, which aims to contribute to thedevelopment of more socially responsible businesses in Europe.Valuing the contribution of social enterpriseA social enterprise is defined by the government as “a business with primarily socialobjectives whose surpluses are principally reinvested for that purpose in the business or inthe community, rather than being driven by the need to maximise profit for shareholders andowners”(9). Social enterprises take many different forms, including local communityenterprises, social firms, mutual organisations such as co-operatives, and large-scaleorganisations operating nationally or internationally. There is no single legal model for socialenterprise. They include companies limited by guarantee, industrial and provident societies,and companies limited by shares; some organisations are unincorporated and others areregistered charities.According to government statistics there are over 60,000 social enterprises in the UK. Thereare 5,450 co-operatives, employing 236,000 people.(9) Social Enterprise: a strategy for success, DTI, 2002 15
  16. 16. No doubt spurred on by the critical state of the European economy the EuropeanCommission has recognised the contribution that what it calls „social businesses‟ make to theeconomy, employment, the environment and individual and social wellbeing, by creating aSocial Business Initiative (SBI). It defines a social business as one:  Whose primary objective is to achieve social impact rather than generating profit for owners and shareholders;  That operates in the market through the production of goods and services in an entrepreneurial and innovative way;  That uses surpluses mainly to achieve these social goals and  That is managed in an accountable and transparent way, in particular by involving workers, customers and stakeholders affected by its business activitySocial enterprise have always made use of the structural funds, mainly the ESF for trainingand the ERDF for business support but also through Community Initiatives such as Equaland the Innovation, Mainstreaming and Transnational programme and through the Leaderprogramme in rural areas. Recently this has expanded into the use of ERDF for capitalinvestment in social enterprises as part of the growing social investment movement.Social enterprise has demonstrated its ability to  create jobs, in particular in disadvantaged areas and for disadvantaged people  contribute to economic development in both urban and rural areas  contribute to environmental improvement, for example through community and co- operative energy enterprises and recycling enterprises  contribute to social cohesion and community empowerment by enabling people to work together in meeting their own needs - for services, jobs and a better environment - in ways that are sustainable and do not depend on continued funding.In order to contribute fully to the achievement of the Fund objectives, social enterprises needthe delivery arrangements to give them:  Recognition of their role and value  Access to the Funds, in particular for training, business support and capitalFinancial Instruments:Spending through innovative financial instruments is another way of spending EU budgetthan giving grants or subsidies. Innovative financial instruments cover a rather broad range ofinterventions such as participations in equity (risk capital) funds, guarantees to local bankslending to a large number of final beneficiaries, for instance small and medium-sizedenterprises (SMEs) or risk-sharing with financial institutions to boost investment in large 16
  17. 17. infrastructure projects (e.g. the Europe 2020 Project Bonds Initiative). A common feature isthe aim to boost the real economy through increasing the access to finance for enterprisesand industry producing goods and services.As part of the continuing effort to make the cohesion policy more effective, the EuropeanCommission announced in 2005, in close collaboration with the European InvestmentBank Group new instruments that permit that managing authorities use some of theirStructural Funds allocations to invest in revolving funds - rather than one-off grantfinancing - and so encourage recyclable forms of assistance, moving away from anexclusive reliance on grants.JESSICA (Joint European Support for Sustainable Investment in City Areas) is ajoint initiative of the Commission, the European Investment Bank and the Council ofEurope Development Bank. It provides enhanced support to Member States and regionsto invest in sustainable urban development and regeneration projects.JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a jointinitiative of the Commission and the European Investment Fund with the EuropeanInvestment Bank. It aims to improve access to finance for medium, small and microenterprises, in particular through the supply of venture capital, loans, guarantees, micro-credit and other forms of innovative financing.In the current multi-annual financial framework (2007-2013), EU spending through innovativefinancial instruments represents less than 1% of the overall EU budget. If the part of thebudget channelled through the structural funds managed by Member States is included, theshare of the budget used in innovative financial instruments is just over 1%. The Commissionconsiders that this percentage could be increased in the next multi- annual financialframework (2014-2020).At a time in the UK when investment and revolving funds are being explored by andfor the social sectors, but are as yet largely untested, it will be interesting to note theextent to which EU instruments are espoused in the Partnership agreement.ConclusionsThe Structural Funds are worth £13 Billion to the UK in the current programme of which the„social providers‟ - Civil Society and social enterprise are able to access a minute fraction.The breadth of proposals included in the Common Strategic Framework 2014-2021 meansthat member states have the potential to create a locus for work on Inclusion, CommunityLed Local Development, Rural development and Action on the environment and climatechange - all areas in which Civil Society has an interest and the capacity to deliver. Equallythe cross cutting measures on gender equality and non discrimination speak to the sector. Atthe same time the delivery mechanisms allowed by the common regulation also make itpossible for the sector to play a greater part in delivering in many parts of the programme.It remains to be seen if the UK will make the choices and deliver a partnership agreementwith room for the sector to contribute to the Smart, sustainable and Inclusive growth foreseenin Europe 2020. 17
  18. 18. AcknowledgementsEFN are grateful to the following for their contributions to this reportAlison Cairns SCVOAndy Churchill NFETamara Flanagan CSVJohn Goodman COOPS UKJohn Hacking NFELaurie Moran CEFETSharon Palmer RAWMSandra Turner NCVOJoanne Welford WCVASteve White LVSC 18
  19. 19. Addendum to page 6 of the „Unleashing the potential of Civil Society in the EU Programmes2014-2020The CATALYST PROJECT (ESF global grants programme 2000-2006)The Catalyst project ran as a Global Grants Programme from 2002-8. It spent £4m (2004prices), funding 643 micro-projects in 29 small communities chosen for their lack of SocialCapital. It operated in communities for 15-42 months (average 27 months).Projects were chosen by a panel of peers in the community set up and supported by a field-worker. Projects had to build social capital in both process and outcome. Direction of thefield-workers, Eligibility checks, financial management, monitoring and reporting wasconducted by an Intermediary Body (CEFET).6,555 excluded people directly undertook the micro-projects themselves. They had anaverage time out of the labour market of 33.5 months, 64% said they would not haveconsidered joining any other sort of provision! Over 180,000 community members wereaffected by the projects.4 months after completion 15% of project participants had full time work, 27% part time. Eventhough - CEFET say because - there are no employment targets for the activity. Only 7.7%were inactive after participation - whereas only 17.2% were active before: this represents amovement of 4,900 people from exclusion to inclusion.Catalyst – and activity like it – were explicitly excluded from the Regional Framework for2007-13 on the grounds that they were “incompatible with the DWP procurement model.”The final evaluation of Catalyst noted the need to “pick-up“ this development in social capitalwith other local activity to ensure progression took hold over a sustainable period, andscoped an England Programme replicating Catalyst costing £13m a year (£16m UK), andproposed a follow-on programme to build the new community capacity towards explicitemployability projects but founded on community self-activity for the same value.It proposed then linking the community based capacity with work and skills programmeswithout forsaking community led delivery in a series of actions worth £26m a year (£32mUK). Each of these measures would last for 5 years within a 7 year programme with astaggered start.The Intermediary Body mechanism would permit activity comprised of micro-projects worthrespectively £7k, £42k, £84 (per annum, respectively) to be rolled into “portfolios” worth atotal of £3m or £4m per annum. The bodies should be pitched to cover, typically, 20communities over the programming period but with roll-on and roll-off, working usually in lessthan 12 at any one time. 19