In EaSI, NEWS, Policy

In a series of articles, Euclid Network explains why the EU budgets matters to you! This week, we zoom into the future of the European Social Fund (ESF); EU’s main instrument for job creation and access to labour market for all.

The EU budget: a short recap

Every 5 to 7 years, the European Union approves its long-term budget referred to, in EU jargon, as the Multiannual Financial Framework (MFF). The current MFF (2014 to 2020) is soon coming to an end. The European Parliament, European Commission and European Council are now renegotiating a new budget, for a period of seven years (2021-2027). Both the European Parliament and European Commission are keen to reach an agreement on the budget before the European Elections of May 2019.

What is the ESF?

The ESF delivers targeted support for job creation, economic growth and social inclusion. It aims to foster social innovation as a way to meet social, educational and employment needs. It actively supports the establishment of social enterprises, in particular to create employment for groups of people who find it difficult to access the labour market.

The ESF is funding tens of thousands of local, regional and national employment-related projects throughout Europe. Support can involve management training for those who run a social enterprise, technical skills training for staff or strengthening the financial sustainability of social enterprise.

Eager to get the best tips to access the ESF for your organisation? Then, stay tuned for Euclid Network’s EU funding guide to be published next year.

What will change?

For the EU budget 2021-2027, the European Commission proposes a total budget of €101 Billion of which €761 million will be directed towards employment and social innovation (including social entrepreneurship). This is a significant cut in the budget of ESF compared to previous years. The EU long-term budget for 2014-2020 allocated €120.4 billion to ESF, with €919,469,000 earmarked for employment and social innovation.

The European Commission proposes to invest in (rather than fund) social enterprises through the Invest EU programme about which you can read more in the first article of this series. The European Commission also wants to simplify fund programming and management so it becomes less of an administrative burden to apply for ESF funding. This is good news as many social enterprises don’t apply for ESF funding because it is simply too complicated. Newspapers report that a record amount of money from European funds like the ESF remains untouched i.e. because of this administrative burden.

Like the EESC, Euclid Network worries about the decrease of the ESF budget. While the shift from funding to investment in social enterprises might in some cases be appropriate for social business in scale-up phase, experts argue that most social enterprises will remain reliant on some form of grant. As echoed in Euclid Network’s article on the European Pillar of Social Rights, at Euclid Network we stand for an inclusive Europe that pushes for more active social and labour polices and more European support for the social enterprise sector. A competitive, cohesive and resilient Europe which is fit for the future requires investment in people through improving their education and training, their skills and their potential to create (social) businesses and to innovate.

“Euclid Network worries about the decrease of the ESF budget. While the shift from funding to investment in social enterprises might in some cases be appropriate for social business in scale-up phase, experts argue that most social enterprises will remain reliant on some form of grant. ”

Find out more

If you would like to find out more about the European Union’s developments on the Multiannual Financial Framework 2021-2027 or comment on our position, contact the Euclid team.

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