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

1. Unleashing the potential of Civil Society
in the EU programmes 2014-20
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2. Background
The earliest discussions for the new structural funds summarised in the Barca report in 2010
set out a new approach to Cohesion policy designed to deliver the Europe 2020 Strategy of
smart, sustainable and inclusive growth. This included support for allocations of a large share
of the EU budget to „place based development strategy‟; a strategic focus on economic and
social goals; a concentration on key priorities along with simplification and efficiency and a
greater focus on the environment, climate change and sustainable transport.
In addition there was an agreement that the deployment of all funds CF, ESF, ERDF, EAFRD
and EMFF towards these common goals outlined in EU 2020 would maximise the impact of
EU funding. Thus a general regulation to allow various funds to work alongside each other
was agreed.
Extract from Common regulation
„To be able to deliver greater European added value, the structural programmes need to
both: a) concentrate their support on EU priorities and b) coordinate with other EU policies
and financial instruments. The Europe 2020 Strategy provides a clear set of common
objectives, including headline targets and flagship initiatives, as a clear framework for
identification of funding priorities.
These recommendations are now enshrined in the proposals for 2014, including interalia the
menu of thematic objectives (see below) greater use of simplified costs and proportional
approach 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
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3. In particular, the reinforced social dimension for the Structural Funds and innovative delivery
mechanisms offer opportunities for Civil Society organisations and social enterprise agencies
to play a fuller part in the delivery of this programme than has been the case in the current
programme.
Such organisations historically played a significant part in the delivery of activities in previous
programmes using support from the Structural funds, in particular for communities, both of
place (urban and rural areas) and type (those facing multiple disadvantages). This paper
sets out to respond to the proposals from the European Commission to describe the role they
could play in the delivery of the new programmes and some mechanisms that could promote
their involvement. It seeks to examine the performance evidence of the current programme,
identifying examples of good practice where they exist and suggesting new approaches to
help deliver the aspirations in the new programme.
Support for the Commission’s proposal to ring-fence at least 20% of ESF for social
inclusion and anti-poverty
Civil Society supports the European Commission‟s proposal to ring-fence 20% of the ESF
allocation for an anti-poverty/social inclusion priority, in order to bring about a
„transformational‟ change to the opportunities available to socially, financially and digitally
excluded 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, to
actively combating poverty and building Social Inclusion. We believe this is an essential
contribution to developing Social Cohesion and ensuring equality of access and opportunity in
and between Member States.
Evidence from the current programme, out with Convergence areas suggests that targets for
those, 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 European
Commission has recognised the need to improve on this(2).
Civil Society believes the earmarking mechanism is the most powerful way to ensure a
decisive and even contribution of the ESF to the EU poverty reduction target that Member
States 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 of
Social 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
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4. Furthermore the economic and social context across the EU is dominated by an increase in
poverty and social exclusion as result of the economic crisis and austerity measures
undertaken by all governments. This is leading to an even greater need for resources to be
dedicated to achieving social inclusion, while defending social protection systems and social
services.
.
There is growing inequality in our society and the widening of the gap between the rich and
the poor. We need to be able to use these funds (minimum 20%) to redress the balance
through 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 local
employment opportunities, is an area with potential for significant growth.
To make most effective use of the ESF available clear links should be made between the
ESF priority for social inclusion/anti-poverty with any complementary ESF or ERDF
investment in employment, job creation schemes, digital inclusion, social enterprise and local
regeneration activities.
The Civil Society and Social Enterprise Sectors have very considerable experience and
expertise in this field, not restricted to front-end delivery but also encompassing design of action,
programme development and management arrangements. The sector believes that Social
Inclusion work requires a different portfolio of interventions, working with a different range of
beneficiaries to different (interim, at least) outcomes than any other work within the structural
funds. Further - these actions are best made through very local bodies – ideally organised by
excluded people themselves supported flexibly to solve the specific problems within each
community.
It is absolutely essential to mobilise and empower excluded people themselves to mount their
own projects to overcome exclusion. They should shape the design, programation, procurement
and management arrangements for an Inclusion Priority – not the other way round.
Social Inclusion – despite some surprising early outcomes – is usually a 2 or 3 stage
development 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 for
excluded communities. They actually suffer if organised within the projects with more general
aims.
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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, designed
to help rural actors consider the long-term potential of their local region, has proven an
effective and efficient tool in the delivery of development policies. The European
Commission 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 EU
support has been provided since 1991, it has become an important element of rural
development 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 and
concerns all the Funds covered by the Common Strategic Framework in the 2014-2020
programming period (the CSF Funds).
CLLD is a specific tool for use at sub-regional level, which is complementary to other
development support at local level. CLLD can mobilise and involve local communities and
organisations to contribute to achieving the Europe 2020 Strategy goals of smart, sustainable
and 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 a
development 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 rural
economy and development actions.
(4) EQUAL Initiative of the ESF focused on supporting innovative, transnational projects aimed at tackling
discrimination and disadvantage in the labour market from 2000-2006.
(5) URBAN II Community Initiative of the ERDF supported innovative strategies for sustainable economic and
social regeneration in a limited number of urban areas throughout Europe from 2000-2006; the URBAN
Community Initiative ran from 1994-1999.
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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 Rural
Development Programme, such activity, as noted was present in previous programmes and was
the subject of rigorous evaluation. Equally it would seem highly congruent with the Coalition
governments Big Society and Localism policies. Further, drawing predominantly on previous
experience, we would also propose using the experience of the Catalyst Evaluation, to design
priorities that can deliver distinctive and effective Inclusion work, ensuring small projects
comprise 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 Body
arrangements with experience of community empowerment work would afford the best hope of
achieving success comparable to the example given and we believe that experience to do that
already exists in our sector.
Civil Society and Social Enterprise Sectors also welcome the European Commission‟s
legislative proposals for 5% of funds to be ring-fenced for LEADER projects, but suggests
this should be the minimum level, with consideration given to ring-fencing a higher proportion
of the budget for LEADER activities in order to facilitate community involvement in rural
development.
The LEADER approach could be strengthened by putting in place criteria to ensure that
communities, and third sector organisations as their representatives, are engaged on a fair
and equal basis in partnership arrangements. The LEADER approach should remain open to
supporting small scale local interventions.
Experience has shown that pre- and post-approval hand-holding support from Project
Officers employed to work with applicants to Rural Development Programme small grants
schemes has worked well. In Wales County voluntary councils (CVCs) have also provided
support informally at local level for third sector applicants to the RDP, but in many cases this
role has not been formally recognised or funded. A formal structure should be put in place to
provide information, advice and support tailored to the needs of third sector applicants to the
RDP, and on-going support during project implementation.
WCVA‟s third sector European team (3-SET) provides a valuable technical support service
for third sector applicants to the Structural Funds programmes. It is recommended that a
similar service be put in place for the RDP in the new programmes.
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7. Direct Access to funding for Civil Society:
The involvement of the Civil Society and social enterprise sector in the EU Structural Funds
across the UK is long standing both at the strategic level as active members of monitoring
committees 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 engage
and meet the needs of those furthest from the labour market, often through holistic and
innovative intervention thus contributing to the achievements of the objectives of EU
structural funds programmes particularly on social exclusion. But is also recognition that the
sector, particularly the social enterprise movement, can be a major contributor to
economic 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, between
2000 and 2003, a total of 160,000 beneficiaries were engaged through 740 projects. Over
15% of the beneficiaries gained employment and 22 % gained a qualification.
However, the ability of the sector to fully contribute its expertise and talents has been
eroded in the current ESF Programme.
The UK government‟s drive for greater administrative efficiency has resulted in the
introduction of co-finance and large contracts based on payments for jobs and skills
outcomes. The strategic focus on those furthest from the labour market in the 2007-13 ESF
programme is retained by the positive rhetoric but by and large this is not matched by
specific interventions and outcomes appropriate to their multiple needs such as soft
outcomes and distance travelled (although the new DWP Families programme goes some
way 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 Wales
the WCVA is engaged in large strategic projects designed to facilitate access to Civil Society
organisations 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 the
case in Scotland, Northern Ireland or England. Direct national projects operated by Civil
Society groups for those furthest from the labour market are also a feature of programmes in
Northern Ireland and Scotland, but not the case in England.
In England the risks associated with payment by results, the perceived scale of bureaucracy
and the absence of a specific priority focussing on those furthest from the labour market have
squeezed out some of the smaller providers, but even the biggest charities find the
opportunities on offer, for instance by the Work Programme, inaccessible due to the sheer
size of contracts and associated financial risks.
Analysis of datasets for the first half of the programme in England confirms that smaller Civil
Society organisations have been „squeezed out‟ not only at the primary contracting but also
at the sub-contracting levels possibly undermining the ability of the ESF programme to
target effectively those furthest from the labour market. The risk of cherry picking those
closer to the labour market remains high as the focus on hard outcomes could embed a
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8. tendency to work with those closer to the labour market. The economic downturn has already
led to a partial refocus towards those closer to the labour market as evidenced by a recent
evaluation by the ESFD summarised in box 1:
Box 1
Early impacts of the European Social Fund‟ focussing on DWP interventions in the first half of
the programme indicate that by November 2009 participants starts were 98,000 of which
70% were claiming JSA, 50% of whom had been claiming benefits for less than three
months. The remaining 30% were on Incapacity Benefit, ESA or Income Support, clients
who are recognised to be further away from the labour market. However, the report
highlights that ‘ESF provision has low impacts on JSA recipients but it is far more
effective for Incapacity Benefit and ESA recipients’ in other words the report suggests
that many JSA customers could have achieved jobs without the additional support
provided by ESF. Recent Work Programme statistics confirm that this trend is
continuing with 95% of engaged clients from JSA customer groups and only 1% from
the IB/IS ESF funded groups.
Qualitative research carried out by TSEN into the experience of Civil Society sub-contractors
in the current ESF programme, points out that the sub-contractors recognised for their
specialist expertise are largely excluded from the design of services they will deliver; that
contractual requirements and targets are narrowly specified and sometimes compromise the
ability of organisations to work effectively with disadvantaged clients; that more could be
done to reward soft outcomes; and that payment delays and „end loading‟ need to be
addressed.
The research finding concluded that potential improvements to the programme should
include increasing the value of contracts available directly to smaller Civil Society
organisations for example through raising the value of Community Grants to avoid the loss of
control experienced by sub-contractors.
Community Grants:
This is a small grants scheme that builds on the experience of the very successful Global
Grants initiative under the 2000-2006 ESF Programme. The programme is designed
specifically for „small third sector organisations‟ that would otherwise not be able to access
mainstream ESF. Each grant is worth up to £12,000 and organisations apply for it to „Grants
Co-ordinating Bodies‟. The grants are designed to work with the disadvantaged and help
them move closer to the labour market; the outcomes are more likely to be about progression
than hard job and qualification outcomes. However evaluation of the Catalyst Global Grants
Programme demonstrated that empowering disadvantaged communities to identify their own
needs and helping them to find solutions, resulted in 76% of participants engaging in some
form of economic activity including jobs, training and volunteering.
The ESF draft regulations for the next programme makes specific references to global grants
as a mechanism to ensure involvement of NGOs in the implementation of operational
programmes in addition to simplified cost options (standard scales of unit costs, flat rates or
lump sums) for grants for which the public support is between €50,00 and €100,000.
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9. We would like to encourage managing authorities to consider increasing the size of global
grants to a maximum of €100k as one of the key tools to ensure direct access to the funds for
Civil Society organisations to help the programme deliver on its commitment to combat
poverty and promote social inclusion.
Civil Society agencies as Intermediary Bodies:
The Welsh experience in the current programme is helpful, through the implementation of a
Portal Project (The Engagement Gateway) operated by WCVA enables Civil Society to
become a key stakeholder in the design, monitoring and delivery of the Structural Funds
programmes in Wales:
The Engagement Gateway was made possible by match funding from the Welsh
Government and adhered to the principles of a work progression model, which emphasises
the development of the individual customer. It was built on the successful elements of the
social inclusion priority under the Objective 1 programme and created multi-layered funding
opportunities through three tiers of ESF funding from less than £25,000 through to £150,000
via tendering / procurement processes.
The project operates under Priority 2 Theme 1 funding of the Convergence programme and
Priority 1 of the East Wales Regional Competitiveness and Employment Operational
Programme.
The project has been designed to link those organisations providing support to 32,000
individuals furthest from the labour market and enable them to provide routes into either
mainstream activity or activities nearer the mainstream. The intention is to deliver a coherent
approach to providing a labour market pre-engagement strategy and an open and
transparent, but managed, process through which a wide range of organisations will be able
to make a valid contribution to the Structural Funds programmes.
The intention is to create a flexible tendering process that links innovative actions engaging
with those furthest to reach to mainstream strategies and programmes. Prime examples
would 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
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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) and
European Regional Development Fund (ERDF) projects, including providing specialist,
innovative approaches to helping the most disadvantaged to overcome barriers to
employment, engaging with and raising the aspirations of young people who are not in
employment, education and training (NEET), supporting the advancement of women in
employment, taking forward the digital inclusion agenda, building walking and cycling route
networks, restoring community buildings, and developing the social economy in Wales.
It is really important to highlight the need for advance payments for third sector organisations
to be continued as without these it is not possible for the majority of the sector to be involved
in the programmes. The impact that volunteer time as match has in Wales is tremendous
with 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 co
finance
Volunteering, an activity that is freely given, without financial gain, and in a spirit of solidarity
for the benefit of the wider community has been recognised in the Structural Funds
Programmes. It has been identified as helping to combat environmental problems, as well as
responding to poverty and social exclusion, often by equipping the unemployed with new
skills that help them secure jobs.
A debate undertaken by policy-makers, NGOs, volunteers and academics during the „Value
of Volunteering‟ Conference in London on 2 November 2009(6), showed that, with an
increase in unemployment and the financial crisis, there has been a renewed policy
emphasis in the EU on volunteering as a route to employment. The European Commission‟s
original EU 2020 Strategy Consultation argued that having a job is probably the best
safeguard against poverty and exclusion. However volunteering in itself ought to be
recognised as an important outcome and mechanism for integration for many individuals who
would 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 people
living in poverty‟(7)], reflects that, given the economic and social value of [volunteer work] to
local communities – and the value of volunteering in terms of building an individual‟s
skills and experiences – it seems obvious that Jobcentres and welfare-to-work policies
should 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 European
Network 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
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11. A report(8) prepared by the Economic and Social Research Council in November 2009
showed that volunteering can not only help people into jobs, but also offers them a possibility
to change their lives for the better. It called for a more effective use of the European Social
fund (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 involves
creating a healthier workforce that empowers people in an inclusive society, then
volunteering should be recognised as a valuable ingredient in all employment and social
policies to be adopted by European institutions in the coming years.
Equally the objectives of the 2014 programmes in the themes of Social Inclusion, Action to
combat climate change, environmental protection and the promotion of sustainable transport
are all volunteer rich areas. The focus on communities and the cross cutting themes
addressing non discrimination would equally benefit from volunteer involvement policy as a
means of achieving desired outcomes. Furthermore the new programme whose regulation
already includes the recognition of volunteer time as eligible match-funding – would further
strengthen the recognition of volunteering as a positive outcome.
Using volunteer time can also facilitate the involvement of Civil Society, transforming social
action into public service solutions. In the current programme in Wales, in particular, a big
effort has been made to ensure third sector organisations are able to provide services and
the inclusion of volunteer time as match funding in Welsh national rules is highly significant in
allowing 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 the
labour market, a more sophisticated targeting of European funding outputs is needed – such
as voluntary activity. Allied to this the inclusion of activities led by a wide range of
organisations - Civil Society and social enterprise, small and large could be facilitated by the
co production focused use of volunteer time as co finance.
Technical Assistance for Civil Society from European Structural Funds
Civil Society has played an important part in the effective delivery of European Structural
Funds in the UK, in particular with the European Social Fund (ESF) and the European
Regional Development Fund (ERDF). We are now moving towards the next programming
period for such funding (2014-20).
A small part of the funds (up to 4% in the current Programmes) is available for Technical
Assistance. TA supports the effective and efficient running of the Programme, and most of it
will go to the Managing Authority, responsible for running the programme and ensuring
claims are prepared and accepted by Brussels. However, a small part of TA is available for
Civil Society, and has been effective in securing the better involvement of Civil Society in
(8) ESRC (November 2009), The Value of Volunteering
http://www.esrc.ac.uk/ESRCInfoCentre/Images/The%20Value%20of%20Volunteering%20Publication_tcm6-
34855.pdf
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12. European Programmes, in securing better delivery, especially for people and areas which
would otherwise be difficult to reach.
In the current programme, the involvement of the Sector was written into the National
Strategic Reference Framework, and for example was referred to in the English ESF
Operational Programme. Page 135, paragraph 425. “...Technical Assistance will also be
available to third sector networks to support participation by voluntary and community
organisations in the programme.”
European Programmes do not fund 100% - there is a requirement that part of the funding
comes not from Europe, but from the Member State itself. Thus for many projects, there will
be a 50% intervention rate from Brussels, so half of the funding will be ESF or ERDF, and the
other half (called match funding) would come from Central or Local Government, or
Charitable or Lottery or other UK based funding.
Each Priority in a Programme will have a fixed intervention rate, and the total of all the
projects has to be within that rate (so some can be higher or lower, so long as the average
for the Priority is within the intervention rate).
It is often difficult for Civil Society Organisations to raise the match (since the funding is
specifically to make the European Programme better), and it is not effective to require Civil
Society 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) or
funding 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 (so
requiring a match of just 5% for the organisation to raise). Other applications for TA would
therefore have to come in at a slightly lower intervention rate (perhaps 49%) in order for the
average to remain at 50%.
The other way would be for the Technical Assistance Priority as a whole to be agreed at
51%, 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 Technical
Assistance that a very small change - generally about 1% for other applicants allows a much
more significant change to the relatively small amount for Civil Society.
In the current ESF (and ERDF) programmes, variable intervention rates have been used, but
these have been in an ad hoc way, each one having to be negotiated individually, which has
not been efficient. A better way, cutting down on red tape would be to use one of the two
procedures described above. This should be built into the discussions at an early stage - we
would 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 for
Civil Society, reinforcing our own government‟s support for Civil Society.
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13. Transnational Projects
The idea of co-operation and mutual learning between member states is a key aspect of the
European Union. We believe that the expression of that co-operation through joint
Transnational projects using the Structural Funds is an important activity promoting
understanding and best practice throughout the Union. We strongly support the retention of
Transnational projects in the
next Programming period.
However, on the basis of The SAM Project is delivered by the CSV Media Clubhouse in Ipswich, it is a
varied and committed three-year programme supported by the ESF that works to socially engage
involvement in the past we people recovering from mental health problems. It provides support for
feel that the opportunities progress into voluntary and paid employment. The project works to integrate
mental health service users into the local community through training, social
offered 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 the
achieved 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 health
partners make a significant users in such an employment focused environment, particularly where this
active contribution to the includes users in the design and management of services. The project’s origins
project 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 is
most effective when it The project’s outcomes, including 21% of beneficiaries into work as well as
reaches right through the 26% into FE/Training and volunteering have exceeded their targets. Key to
project down to, and their success has been a willingness to evolve which illustrates the benefits of a
especially involving, the flexible approach and expectation of experimentation.
experience of the
beneficiaries 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 social
The 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 visits
will require partners to join
by SAM participants to Denmark, the most significant event being a visit by a
in scoping and applying for number of SAM users, volunteers and staff to Copenhagen during 2011. In
resources for the project addition to SAM participants, the party also included a senior DWP policy
which 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-ordinated
framework for this and we
are especially interested in
the idea that Members
States pick themes from a
short menu at the outset of the Programme, and on that basis actively participate in a
Transnational Network under that theme.
We believe consideration should be given to restrict activity in the first year of the
Programme to “foundation” work within these networks, which allows and supports local
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14. organisations to participate in these networks, cement relationships with partners and scope
project specifications. Only then should a call for proposal be made.
We believe it is important that Transnational projects actively involve their beneficiaries and
not just their organisations in Transnational co-operation, understanding and learning.
Studies of the current Programme‟s projects should be undertaken to bring forward proposals
into how to realise this aim. The foundation phase of the thematic networks should be judged
by how much it allows local community participation in scoping projects.
Contribution of the VCS to Sustainability and the Environment
From small organisations who implement ethical policies to larger campaigns to promote
green issues and protecting the environment, Civil Society continues to contribute to the
issues in a positive, constructive, and passionate way.
Sustainable Development has been a feature of ESF funding for over 10 years. The sector
has engaged consistently in projects funded by ESF that have delivered outcomes with
disadvantaged target groups in sustainable employment, job entry and training. The impact
on local economies of helping disadvantaged groups such as the long term unemployed has
been 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 fabric
of areas of deprivation.
The voluntary sector with its emphasis on social good, working with the most in need, is
consistent, other sectors do not invest in this work as it does not attract profit. The sector is
willing to stand up for those that can't stand up for themselves against vested interests
particularly when it comes to the environment, social issues and championing the
redistribution of wealth and fighting for fairness.
The voluntary sector has always been progressive in areas like the environment, with
examples of ethical buying policies, recycling projects, and support for fair-trade goods. The
sector is more likely to be involved with campaign groups such as Friends of the Earth and
Greenpeace 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 sector
than any other sector. The idealism in the sector can draw in the next generation to harness
contributions that they want to make to environmental and social causes in a way that no
other sector can.
Funding mechanisms in any future programme should encourage this activity, and not be a
barrier such as the 'Prime Contractor' private sector whose only ideal is profit. Sustainability
and Environmental targets will not be achieved unless the voluntary sector is encouraged
and enabled to be a stakeholder in delivery and have its role stifled by private led primes that
parasitically skim large management fees off of the good work of others.
Economic sustainability is being encouraged through the use of financial instruments/loan
funding specifically targeted at enterprising third sector organisations (such as Communities
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15. investment fund (CIF), in addition to specialist business support and advice services, notably
for 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 the
economy grew by 1.3%, which demonstrates the resilience of the co-operative model during
difficult economic times. Therefore it is recommended that specific reference should be
made to support social enterprises and co-operatives in any future SME Competitiveness
priority. Advice and support for any organisation looking to diversify funding streams should
also be supported and encouraged.
It is recommended that scope is included in the low carbon economy agenda for community
led schemes, including investment in the form of grants and loans to provide seed-corn
funding, as well as advice, to enable community renewable energy schemes to get off the
ground 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 resource
efficiency‟, eco-system services and biodiversity should be included as eligible activities,
recognising the potential health, wellbeing and economic prosperity benefits for rural areas
and for the environment in relation to the Natural Environmental Framework.
Social Enterprise and Social Innovation
Social enterprises and innovative forms of Civil Society organisations such as CICs
(Community Interest Company) are increasingly being seen as essential to the innovation
agenda in Europe.
The identified capacity of Civil Society organisations and social enterprises to find new
solutions to complex problems, develop partnerships and engaging communities in co
production and finding innovative financial solutions will make them prime actors following
the launch of the Social Business Initiative by DG Business, which aims to contribute to the
development of more socially responsible businesses in Europe.
Valuing the contribution of social enterprise
A social enterprise is defined by the government as “a business with primarily social
objectives whose surpluses are principally reinvested for that purpose in the business or in
the community, rather than being driven by the need to maximise profit for shareholders and
owners”(9). Social enterprises take many different forms, including local community
enterprises, social firms, mutual organisations such as co-operatives, and large-scale
organisations operating nationally or internationally. There is no single legal model for social
enterprise. They include companies limited by guarantee, industrial and provident societies,
and companies limited by shares; some organisations are unincorporated and others are
registered charities.
According to government statistics there are over 60,000 social enterprises in the UK. There
are 5,450 co-operatives, employing 236,000 people.
(9) Social Enterprise: a strategy for success, DTI, 2002
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16. No doubt spurred on by the critical state of the European economy the European
Commission has recognised the contribution that what it calls „social businesses‟ make to the
economy, employment, the environment and individual and social wellbeing, by creating a
Social 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 activity
Social enterprise have always made use of the structural funds, mainly the ESF for training
and the ERDF for business support but also through Community Initiatives such as Equal
and the Innovation, Mainstreaming and Transnational programme and through the Leader
programme in rural areas. Recently this has expanded into the use of ERDF for capital
investment 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 need
the delivery arrangements to give them:
 Recognition of their role and value
 Access to the Funds, in particular for training, business support and capital
Financial Instruments:
Spending through innovative financial instruments is another way of spending EU budget
than giving grants or subsidies. Innovative financial instruments cover a rather broad range of
interventions such as participations in equity (risk capital) funds, guarantees to local banks
lending to a large number of final beneficiaries, for instance small and medium-sized
enterprises (SMEs) or risk-sharing with financial institutions to boost investment in large
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17. infrastructure projects (e.g. the Europe 2020 Project Bonds Initiative). A common feature is
the aim to boost the real economy through increasing the access to finance for enterprises
and industry producing goods and services.
As part of the continuing effort to make the cohesion policy more effective, the European
Commission announced in 2005, in close collaboration with the European Investment
Bank Group new instruments that permit that managing authorities use some of their
Structural Funds allocations to invest in revolving funds - rather than one-off grant
financing - and so encourage recyclable forms of assistance, moving away from an
exclusive reliance on grants.
JESSICA (Joint European Support for Sustainable Investment in City Areas) is a
joint initiative of the Commission, the European Investment Bank and the Council of
Europe Development Bank. It provides enhanced support to Member States and regions
to invest in sustainable urban development and regeneration projects.
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint
initiative of the Commission and the European Investment Fund with the European
Investment Bank. It aims to improve access to finance for medium, small and micro
enterprises, 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 innovative
financial instruments represents less than 1% of the overall EU budget. If the part of the
budget channelled through the structural funds managed by Member States is included, the
share of the budget used in innovative financial instruments is just over 1%. The Commission
considers that this percentage could be increased in the next multi- annual financial
framework (2014-2020).
At a time in the UK when investment and revolving funds are being explored by and
for the social sectors, but are as yet largely untested, it will be interesting to note the
extent to which EU instruments are espoused in the Partnership agreement.
Conclusions
The 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 means
that member states have the potential to create a locus for work on Inclusion, Community
Led Local Development, Rural development and Action on the environment and climate
change - all areas in which Civil Society has an interest and the capacity to deliver. Equally
the cross cutting measures on gender equality and non discrimination speak to the sector. At
the same time the delivery mechanisms allowed by the common regulation also make it
possible 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 agreement
with room for the sector to contribute to the Smart, sustainable and Inclusive growth foreseen
in Europe 2020.
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18. Acknowledgements
EFN are grateful to the following for their contributions to this report
Alison Cairns SCVO
Andy Churchill NFE
Tamara Flanagan CSV
John Goodman COOPS UK
John Hacking NFE
Laurie Moran CEFET
Sharon Palmer RAWM
Sandra Turner NCVO
Joanne Welford WCVA
Steve White LVSC
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19. Addendum to page 6 of the „Unleashing the potential of Civil Society in the EU Programmes
2014-2020
The CATALYST PROJECT (ESF global grants programme 2000-2006)
The Catalyst project ran as a Global Grants Programme from 2002-8. It spent £4m (2004
prices), funding 643 micro-projects in 29 small communities chosen for their lack of Social
Capital. 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 the
field-workers, Eligibility checks, financial management, monitoring and reporting was
conducted by an Intermediary Body (CEFET).
6,555 excluded people directly undertook the micro-projects themselves. They had an
average time out of the labour market of 33.5 months, 64% said they would not have
considered joining any other sort of provision! Over 180,000 community members were
affected by the projects.
4 months after completion 15% of project participants had full time work, 27% part time. Even
though - 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 a
movement of 4,900 people from exclusion to inclusion.
Catalyst – and activity like it – were explicitly excluded from the Regional Framework for
2007-13 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 capital
with other local activity to ensure progression took hold over a sustainable period, and
scoped an England Programme replicating Catalyst costing £13m a year (£16m UK), and
proposed a follow-on programme to build the new community capacity towards explicit
employability projects but founded on community self-activity for the same value.
It proposed then linking the community based capacity with work and skills programmes
without forsaking community led delivery in a series of actions worth £26m a year (£32m
UK). Each of these measures would last for 5 years within a 7 year programme with a
staggered start.
The Intermediary Body mechanism would permit activity comprised of micro-projects worth
respectively £7k, £42k, £84 (per annum, respectively) to be rolled into “portfolios” worth a
total of £3m or £4m per annum. The bodies should be pitched to cover, typically, 20
communities over the programming period but with roll-on and roll-off, working usually in less
than 12 at any one time.
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