European Council and Parliament reach provisional agreement.

Under the Portuguese Council Presidency, the Council and the European Parliament reached a political agreement on the draft of the regulation establishing the ESF+ (European Social Fund Plus) on the 28th January 2021.

As part of the EU’s long-term budget for the 2021 to 2027 period, ESF+ is intended to combine the existing ESF, the existing FEAD (Fund for European Aid to the Most Deprived), the YEI (Youth Employment Initiative) and the EU’s EaSI (Employment and Social Innovation) programme. One of the objectives of EaSI is to promote the development of adequate social security systems and labour market strategies. The ESF+ budget will be around 88 billion euros.

Specifically, the fund's resources will be used to:

• combat youth unemployment. At least 12.5 per cent of ESF+ funding should be spent on this in EU countries, where the quota of young people aged between 15 - 29, who are neither in employment nor in education or training, is above the EU average. This could be, for example, on vocational and advanced training measures, especially apprenticeship training, or support during the transition from school to work. All other EU countries will be called upon to provide an adequate amount of resources for the fund in order to support youth employment measures.
  
• support groups in the population that are particularly vulnerable to job losses and loss of income. In each case, 25 per cent of ESF+ funding will be used to promote social inclusion.
  
• provide food and basic material support to the most socially deprived. At least 3 per cent of ESF+ funds should be earmarked for this purpose.
  
• support young people and children at risk of poverty. For EU countries with a child poverty rate above the EU average, at least 5 per cent of ESF+ funding, and an appropriate amount from elsewhere, should be allocated to targeted measures for tackling child poverty.
  
• promote social innovation through the new "Employment and social innovation" area with a special fund of 676 million euros.
  

Back­ground

ESF+ will be the EU's main instrument for investing in a more social and inclusive Europe and a key financial tool for implementing the European Pillar of Social Rights through actions in the education, employment and skills areas, as well as social inclusion. It will also aim to support member states in addressing the crisis caused by the coronavirus pandemic as well as achieving high levels of employment, fairer social protection and a well-skilled workforce in order to manage the transition to a green and digital economy. ESF+ will be aligned with the European Semester, as the fund's resources will also be used to address the challenges identified in the annual country-specific recommendations.

In the meantime, the EC has evaluated the ESF and YEI support from the previous programme period in a current report (text only available in English). According to the report, about 23 million people participated in ESF measures from 2014 to 2018. About 3.2 million of the participants found employment and 3.9 million successfully obtained a qualification. Moreover, ESF and YEI are expected to contribute nearly 0.33% to total GDP growth by 2023. ESF has enabled EU citizens to train and retrain, remain mobile and find sustainable and meaningful work, which will also prove crucial in dealing with the impact of the pandemic.

Next steps

The draft ESF+ regulation now needs to be formally adopted by the European Parliament and the Council. The long-term EU budget for 2021 - 2027 was adopted as early as December 2020, so that the EC could start allocating funds from it on the 1st January 2021.

Further information about ESF+ can be found here and the EC's report and overviews of the ESF here.