1

Unleashing the potential of Civil Society in the EU programmes 2014-20

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.

European Union

Cohesion Policy │ 13

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

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

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.

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.

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.

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

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.

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

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

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

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.

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 varied and committed involvement in the past we feel that the opportunities offered for co-operation and understanding is best achieved when two key principles are observed:

That all Transnational partners make a significant active contribution to the project throughout.

That Transnational co-operation and learning is most effective when it reaches right through the project down to, and especially involving, the experience of the beneficiaries on the project. The first of these principles will require partners to join in scoping and applying for resources for the project which make Transnational co-operation a reality. We 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

The SAM Project is delivered by the CSV Media Clubhouse in Ipswich, it is a three-year programme supported by the ESF that works to socially engage people recovering from mental health problems. It provides support for progress into voluntary and paid employment. The project works to integrate mental health service users into the local community through training, social and physical opportunities, using a holistic timetable of activities and courses. SAM provides a safe and supported environment for participants to develop the necessary skills required for future volunteering and employment. SAM is clearly innovative in relation to its underlying model, and its ways of working. There are few other initiatives known which work with mental health users in such an employment focused environment, particularly where this includes users in the design and management of services. The project’s origins 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 expected. The project’s outcomes, including 21% of beneficiaries into work as well as 26% into FE/Training and volunteering have exceeded their targets. Key to their success has been a willingness to evolve which illustrates the benefits of a flexible approach and expectation of experimentation. SAM’s transnational dimension is provided through its relationship to Danish organisation FIC, an NGO with a long history of employment and social inclusion work, with strong Social Partner and NGO links in Denmark and across Europe. Activities have included remote information exchange and visits by SAM participants to Denmark, the most significant event being a visit by a number of SAM users, volunteers and staff to Copenhagen during 2011. In addition to SAM participants, the party also included a senior DWP policy advisor who has worked in recent times on welfare and employment policy, including taking part in earlier ITM networking meetings.

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

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

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

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.

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

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.