European Commission Interservice Group Brussels, 30 April 2009 European Social Fund 2007-2013 Cities facing crisis : how ESF may help ? European Commission Interservice Group Brussels, 30 April 2009

Cities at the forefront of the crisis Cities are experiencing the consequences of the financial and economic crises in many ways : Their financial resources are often limited and budgets under constraint Their development projects can be put in jeopardy Their citizens look more to local government for reintegration support and essential social services

Cities at the forefront of the crisis Cities have a key role in counteracting the crisis : In the implementation of recovery measures is very often local. Local and regional governments are responsible for some 70% of public [procurement] expenditure In providing support and essential social services. All this action is essential to ensure social stability and prevent social exclusion

How the European Social Fund may help ? The European Social Fund is the EU’s main financial instrument for supporting jobs and investing in people since 1957 Supporting employment and combating unemployment is « daily business » for ESF programmes. In the current crisis situation, its potential scope of action is all the more important.

How the ESF may help ? Facts and figures about ESF The European Recovery Plan : Changes to the Structural Funds Regulation The priorities in the crisis Some examples of how cities can use the ESF to enhance their response to the crisis ?

Facts & Figures about ESF Budget Resources share of EU budget (2007-13)

Facts and figures about ESF Objectives & Funds convergence ERDF ESF Cohesion Fund regional competitiveness & employment ERDF ESF European territorial cooperation ERDF infrastructure, innovation, investments ALMP, training, employment environment, transport, renewable energy all Member States & regions Member States GNI/cap < 90%

Facts and figures about ESF Objectives & Funds ESF = 76 bn€

Convergence (<75% GDP/cap) Regional Competitiveness & Employment 170 mio hab. 81% € (68% ESF) 314 mio hab. 16% € (32% ESF)

Facts and figures about ESF ESF Use per Member State

Facts and figures about ESF The ESF funding priorities Adaptability lifelong learning & work organisation Access to employment & inclusion in labour market Human capital education & training systems & networking activities Social inclusion integration in employment & diversity in workplace Partnerships and pacts Institutional capacity & efficiency of public administrations & services

The ESF funding priorities

ESF supports … 9 million people trained per year of which …

The European Recovery Plan 26 November 2008 As part of the European Economic Recovery Plan Commission has also proposed changes to Structural Funds Regulations (General Regulation, ESF and ERDF Regulations) Objectives: to strengthen investment with a view to generating renewed growth and job creation To accelerate and simplify implementation of OPs

Amendments to the General Regulation Simplify financial engineering Strengthen the possibility of provision of TA by EIB and EIF (art 46) Rules to accelerate the implementation of major projects (not applicable to ESF) More flexible conditions governing the reimbursement of advances in the case of state aids [Art 78 (2) (b)] (relevant also for the ESF) Clarifications on eligibility of expenditure related to specific provisions of the Funds [Article 56 (2) (b), Article 78(1)] Additional pre-financing payment (+2,5% for EU12, +2% for EU10) for structural funds (Article 82) (ESF and ERDF) The proposed modifications are concentrated on four principal areas: extending the scope of application of Article 44 relating to financial engineering instruments for the intervention of the EIB and EIF in support of Member States for the preparation and implementation of operational programmes; an amendment to Article 56 relating to the eligibility of expenditure with a view to clarifying the possibility of payment of overheads on the basis of flat rates and to introduce the possibility of in-kind contributions being considered as eligible expenditure at the time of establishing - or contributing to – funds; A modification of the dispositions relating to expenditure declarations: (i) for major projects with the removal of the prohibition from including incurred expenditures for such projects in interim payment requests before major project approval by the Commission and (ii) for State Aids within the meaning of Article 87 of the Treaty through the removal of the 35 % limit hitherto attaching to advances paid to beneficiaries by the body granting the aid, thus permitting advance payments of up to 100 %, other conditions remaining unchanged; An increase in the third pre-financing instalment (2009) of 2 % for Structural Funds for those Member States that acceded to the European Union on or after 1 May 2004, the creation of a third instalment (2009) of 2,5 % for Structural Funds for all those Member States which had acceded to the European Union as constituted before 1 May 2004, in terms of the territorial co-operation objective, if the programme contains at least one participating Member State which acceded to the European Union on or after 1 May 2004, it is attributed an additional percentage advance of 2% in 2009. These additional resources which should be made available at the beginning of the year should be rapidly transferred to beneficiaries, taking due account of the rules of sound financial management.

Amendments to the General Regulation Increased pre-financing to Member States :   ERDF € bn ESF € bn Total € bn EU 12 1,765 0,529 2,294 EU 15 2,568 1,234 3,801 Cross border 0,155 Total 4,488 1,763 6,251

Amendments to the ESF Regulation Introduce the options of lump sums and standard scale of unit costs in addition to flat rate for indirect costs Lump sums and flat rates particularily relevant for small projects and NGO promoters How to use the options Combination (no double financing) Calculation: in advance on the basis of a fair, equitable and verifiable calculation Capping of lump sums : € 50,000 Amendments to be adopted in May 2009

The European Recovery Plan 26 November 2008 In the framework of the European Economic Recovery Plan (EERP), the commission has also called upon the MS to : reinforce activation schemes, in particular for the low-skilled, involving personalised counselling, intensive (re-)training and up-skilling of workers, apprenticeships, subsidised employment as well as grants for self-employment, business start-up's refocus programmes to concentrate support on the most vulnerable, and where necessary opt for full Community financing of projects during this period; improve the monitoring and matching of skills development and upgrading with existing and anticipated job vacancies; The Commission has proposed to the MS to re-programme ESF expenditure to ensure that immediate priorities are met.

How cities can use ESF to enhance their response to the crisis ? First and above all, it depends on the way cities are involved in the Operational program. It must be remembered that the choice of the appropriate territorial level of management is the responsibility of Members States Three main cases can be pointed out. Local authorities are the managing authorities of a specific OP targeting a mainly urban area (“Brussels Capital”, “Prague”, “Berlin”, “Bremen”, “Madrid”…). Local authorities have been designated by Members States or Managing Authorities as “intermediate bodies”. They manage and implement a part of the operational program. Local authorities take part to the regular call of proposals organised by the managing authority.

How cities can use ESF to enhance their response to the crisis ? Many measures co-financed by ESF have been already taken at national or regional level Reinforcement of activation schemes Personal guidance and career guidance (UK) Offering more training and retraining (Greece, Spain) Promoting self-employment and start ups (Bulgaria, Slovenia, Slovakia, Romania) Focusing on the most vulnerable Programme “Employment in the neighbourhoods” (Spain – Catalonia) Local social capital (Germany – Soziale Stadt) Matching of skills development and upgrading with existing and anticipated job vacancies Adaptability of workers and enterprises (Slovenia, Portugal, Wales, Germany) Anticipation and matching of skills (Poland, England…) Investing in the institutional capacity building (Greece, Poland)

How cities can use ESF to enhance their response to the crisis ? And some cities have already reinforced their actions thanks to ESF in Zaragoza (Es), the crisis has created a very tough situation for the unemployed constructions workers after the 2008 EXPO. A personalised guidance service has been provided. Qualified construction workers receive specialized training to upgrade their skills, whereas non qualified workers (no specific skills and/or short experience) are trained and reoriented towards new careers in sectors with more employment opportunities ; In England, thirteen London boroughs have joined forces 19 with ESF to deliver more than £ 8 million to projects seeking to help Londoners into paid work (For instance a scheme to help workless parents into employment ; a scheme to provide individuals with mental health, physical or learning disabilities with the skills and support they need to access the job market) In France, la communauté d’agglomération Mantes en Yveline (CAMY), designated as intermediate body for managing a global grant has launched a call to proposals which intends to develop the offer in training and tools allowing guidance towards current and anciticipated jobs vacancies

More Info http://ec.europa.eu/esf