Europeans Have Positive Impact In the UK Until 2006

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“What have the Europeans ever done for us, eh? They take our taxes so bureaucrats in Brussels can invent stupid regulations about the correct dimensions of asparagus, then they give the rest of the cash to French farmers so they can buy kerosene to burn British sheep.” Right?

Wrong. It might be convenient for us xenophobic Brits to believe we get nothing at all from the European Union, but this isn”t really the case. While it is true that we generally put more in than we get out, things aren”t actually as bad as the Eurosceptic brigade would have us believe.

Between 2000 and 2006, the European Social Fund (ESF) will invest more than £5 billion in Britain. The fund targets areas of the EU plagued by high unemployment and social deprivation, and one of the ways it tries to help is by funding further education and training. It supports a range of projects and initiatives around the UK, and has injected fresh hope into dozens of British communities struggling to face up to the loss of traditional industries.

Social Fund Facts

The ESF was set up by the Treaty of Rome in 1957. This historic agreement between six countries also established the European Economic Community, an important first step toward the creation of the EU itself. The new member countries declared that one of their key objectives was the elimination of social and economic disparities within their borders. The social fund was the practical instrument through which this goal was to be achieved.

The most common form of ESF funding in the UK today is Objective 3. Its aim is to tackle long-term unemployment by improving education and training. In particular, it seeks to help young people at risk of not being able to find work and improve work prospects for women. It also promotes the development of skills in the workplace.

The funds Objective 3 provides have been instrumental in supporting the growth of a new type of learning provider in the UK. These are often voluntary and community organisations that deliver basic and vocational skills in locations accessible to learners. Because they are unlike traditional formal learning environments, the organisations have been successful in attracting people who might have been reluctant to continue in education in the past.

A Perfect Match

Objective 3, like most ESF schemes, works on a match-funding basis. This means that the ESF will equal whatever funds the learning provider can find from other sources, effectively doubling the project’s money. Match funding is designed to stop national governments from abdicating their responsibilities to the ESF. Instead, it provides a strong incentive to invest in projects so the maximum potential funding from the ESF can be secured.

The downside of this system is that finding funds for the ESF to match can be far too much work for small organisations to manage. The solution to this problem has been to use what are known as “Co-Financing Organisations” (CFOs), a new arrangement introduced by the government in 2001. The LSC is one of the biggest CFOs in the UK: it provides funds for the ESF to equal and ensures that projects are integrated with the UK’s National Action Plan for Employment. The LSC has been successful in securing over £800 million worth of ESF money since 2001.

Despite this kind of efficiency, the CFO system has been strongly criticised by many small organisations that bid for ESF funds. It is alleged that CFOs favour larger organisations and projects that promise “big impact” results, neglecting smaller grassroots organisations that bring less easily measurable benefits to a community. This kind of “top-down” approach has long been discredited in the developing world, where it has led to aid money being wasted on projects that promise a lot but actually deliver very little.

A Positive Experience

While aspects of the ESF (most notably its bureaucracy) have come in for criticism, it is almost universally praised for the work it does in this country. After taking part in a recent parliamentary inquiry into the ESF, MP Sir Archy Kirkwood was left with few doubts about the positive impact it has had: “In spite of my own very positive constituency experience, I was under the impression that in some areas the social fund was nothing more than a job creation scheme for bureaucrats. I no longer believe that to be the case. There are still difficulties, and improvements need to be made, but I cannot but be impressed by the enthusiasm of the service providers that we saw on the ground.”

Another MP, David Drew, pointed out that the ESF had had a positive effect throughout Britain. “I do not think that there is a constituency in the country that has not had some relationship with the fund, so widespread has been its influence”, he said. “That is something for which the EU as a whole is to be congratulated on.”

While the benefits brought by the ESF have been felt all over the UK, the programme has tried to ensure that the largest share of resources go where they are most needed. In regional terms, the North East has received a bigger allocation of Objective 3 funding than anywhere else in England. In 2003, it was estimated that more than 22,000 people from this area had found jobs as a result of the scheme.

All Good Things Come to an End

Unfortunately, the expansion of the EU to include ten new countries will have the effect of terminating most ESF funding in the UK by 2006. This is because the GDP figure per head is often 75% below the EU average in the new member states, and it makes sense that ESF money should go to the places where social and economic disparities are most marked.

According to James Plaskitt, the UK minister responsible for ESF: “The UK Government’s own reform proposals would concentrate Structural Funds on the poorest countries where they can add the greatest value. Even if there were to be traditional ESF funding in the UK and other richer countries, the amount of funding would be considerably smaller than now.”

This assessment is logical, and in many ways commendable. Nevertheless, it remains to be seen how badly UK learning providers and community projects are affected by these changes. The LSC and the government suggest that the transition will be a smooth one: the organisations involved are aware of the changes and have planned accordingly, and many will apparently seek funding from alternative sources. All this sounds very reassuring. But how easy will it really be to make up for the disappearance of more than £5 billion worth of funding over the next seven years?

Joe Paget

Where should learning providers go for alternative funding? Tell us in the FE Blog