HL Deb 01 December 1983 vol 445 cc813-34

4.9 p.m.

Lord Seebohm rose to move, That this House takes note of the report of the European Communities Committee on the Review of the European Social Fund. [2nd Report, 1983–84, H.L. 22].

The noble Lord said: My Lords, the Motion before the House is to take note of the report of the European Communities Committee on the Review of the European Social Fund. This is the second report on the social fund: the earlier one was presented to your Lordships in 1981. The first report dealt in some detail with the history and background of the fund, which is not repeated in the second report. At this stage I should like tomake the comment that anybody who has read it will recognise the very skilful drafting of my predecessor, the noble Lord, Lord Wolfenden, who I see is in the House, and who at great personal inconvenience redrafted practically the whole of that report. Iwould make only two comments on the background which seem relevant to today's debate.

The first is that the fund was started in the 1960s, when the economic scene was one of prosperity and growth, and only certain clearly defined areas needed special assistance. These were originally Greenland, the French overseas territories, and the Mezzogiorno in Italy. In fact, later Ireland and Northern Ireland were added, and later still Greece, and 40 per cent. of the total fund is still allocated to those special countries.

It was not until 1971 that the first major change was made, to widen the fund's role, and a change was made again in 1977, when unemployment was increasing and there seemed to be no immediate prospect of renewed economic growth. The Council of Ministers adopted the Commission's proposed amendments on 1st January 1978, and it was these new guidelines that were studied by the Select Committee in its 1981 report.

My second comment is that the word "social" in the fund's title can be misleading. as it has no connection with the British meaning, which is in the context of welfare or social services, but in the report it is concerned solely with alleviating unemployment by supporting projects for training and re-training unemployed persons, and allied problems which I shall describe later.

The second report, which is before your Lordships today, inquires into how far the recommendations of the first report have been adopted and into the fresh guidelines put forward by the Commission in 1982, and it asks whether these are acceptable or could be further improved.

The committee took oral evidence from a large number of bodies, including the Department of Employment. RADAR—which is the Royal Association of Disablement and Rehabilitation—the Association of District Councils, the European Commission, in the persons of Mr. Ivor Richard, Mr. N. Stabenow, and Miss K. Fogg, and the National Council of Voluntary Organisations. It also received memoranda from other local authority bodies, the Commission for Racial Equality, and others. To all these we are most grateful.

I would remind your Lordships that the main types of scheme which are assisted are training and retraining schemes, schemes for the resettlement of workers and their families who have to move, measures to make access to employment easier for disabled or elderly people and vocational preparation and job creation for newly engaged workers. The fund also supports pilot schemes which have an innovatory approach which are of potential relevance throughout the Community. Applications for assistance must also have financial support from a public authority, which must also guarantee the completion of the project.

The size of the fund was described in the earlier report as pitiably small, and so it is, but as so many projects are small and of an experimental nature, there can be no doubt that to many recipients it has been a godsend. The actual figures allotted in the Community budget have grown from 538 million ECUs (that is about £300 million), or 4.4 per cent. of the EEC budget, in 1978. to 1,696 million ECUs, or £860 million—about 5 per cent. of the budget for 1983. This compares with 65 per cent. of the budget which goes to agriculture, and it is not surprising therefore that the applications to the fund exceed the money available by over 100 per cent. However, the United Kingdom gets 30 per cent. of the fund, which I think we must consider reasonable.

Apart from the actual size of the fund, main views of the 1980 committee were as follows. It drew attention to the potentially catastrophic problem of youth unemployment. The 1982 proposals from the Commission allocate 75 per cent. of the fund to those unemployed who are 25 years or under.

Next the committee argued that the administrative procedures should be simplified. Clearly this has been taken seriously by the Commission. but the Select Committee considers that still further improvements can be made in their application. For instance, it was pointed out by the Commission that the forms had to meet the varying conditions in all the member states. My own opinion is that it is not beyond the wit of man to devise separate forms for each country if there really are major differences in requirements.

Finally, the 1980 committee considered that more publicity should be given to the availability of the fund. and the Select Committee is glad to report that a useful pamphlet has since been issued by the Department of the Environment, which has gone to over 6,000 recipients. The National Council of Voluntary Organisations remains a considerable source of help to voluntary bodies and explains the very low take-up as being due to the complexity, the long time-scale and the unavailability of matching funds from public sources.

At this point must tell the House that the Select, Committee finds itself in something of a dilemma. The sub-committee began taking evidence in January of this year and hoped to report to the House before the Council of Labour and Social Affairs met to consider the Commission's review of the Social Fund in June. However, on 13th May Parliament was dissolved, and the committee was unable to meet the deadline. Many, aspects of the review were, therefore, not considered by the Council of Ministers, and the Select Committee's suggestions became, at least temporarily, irrelevant. However, there will be further reviews, possibly biennially, in the future, and the Select Committee's report may, we hope, carry some weight in these procedures. I propose, therefore. to mention briefly the improvements proposed in our report not already mentioned and to explain how they are affected by the Council of Ministers' document.

The Commission's proposals brought in a broad range of eligible people and operations, largely as before, but with two significant additions. First, there are young people under the age of 18 who have completed compulsory education, whether or not employed, and then persons or bodies involved in vocational guidance, placement or development work at local level.

The Commission also proposed to reduce the qualification of priorities from level 2 regions to level 3 regions (which in the case of the United Kingdom means counties), which is an improvement, and also included certain "black spots", which though located in more prosperous counties, have an unemployment rate more than three times the national average. That the committee believes to be unrealistic, as the national average is 13 per cent., and a rate of 39 per cent. before obtaining help seems somewhat absurd as a criterion of need. Twice the national average would perhaps be more realistic.

A special case was made out by the CRE, EOC, and RADAR for racial minorities and women, but the committee supports the Commission's policy of trying to ensure that the small sums available are concentrated in the deprived regions. Those categories, of course, would not be excluded in those regions.

The problem of additionality was discussed. While it is difficult to ensure in large schemes, it is almost certainly "additional" where voluntary and pilot schemes are concerned. The Scottish and Welsh Development Agencies, however, gave evidence that Social Fund money does not in any way enhance the budgets of these organisations. The AMA argues that those authorities which take advantage of it will probably suffer a significant loss of rate support grant. The committee urges the Government to revise their method of calculating local authority expenditure so as to eliminate this contradiction.

Other speakers will no doubt deal more thoroughly with the administrative problems, but there are two important recommendations in the Commission review. These were: first, to reduce the necessity for 50 per cent. of the money to come from a public authority to 30 per cent., leaving the balance of 20 per cent. to come from any source, while retaining the fund's contribution to 50 per cent. of the total; and, secondly, to increase the down payment on acceptance of a scheme to 60 per cent. instead of 30 per cent. of the EEC contribution. Thatwould help the smaller recipients appreciably. However, it has not been accepted by the Council of Ministers.

In any inquiries of this kind interesting matters are raised which are not strictly relevant to the subject at issue. I shall mention only one, as it could have relevance to Community policy in a parallel field. It relates to the suggestion put forward by the Royal Association for Disablement and Rehabilitation. This was to encourage the development of schemes whereby disabled people are employed by an industrial sponsor on sheltered employment terms. They normally work on the premises of an organisation. The organisation does not lose out. as the MSC will provide the financial support to bring the earnings up to the standard level.

This brings the disabled into the normal working environment instead of being isolated in a sheltered workshop and is a considerable saving in national expenditure and can be extended from the present pattern of simple manufacture to white collar trades and even to working at home. In all cases a valuation is made of the value of the work done and the difference is made up by the Commission to an agreed total. RADAR consider that there are all sorts of jobs that could be done that are not being done for economic reasons that this scheme, if developed, would uncover.

To sum up, therefore, the committee concluded, inter alia,that the fund was regrettably small; a situation which is likely to worsen with the arrival of Spain and Portugal in due course. They welcome the emphasis on the needs of young people, the simplification of procedures, but disagree with the definition of "black spots". They welcome the proposed inclusion of the training of trainers, provision of vocational guidance and "development" agents. The relaxation of matching funds is welcome but should go further to enable voluntary bodies to match fund money with private money. They consider, as I have already said, that the Government should take steps to ensure additionality.

Finally, my Lords, I must describe briefly the effect of the Council of Ministers' review on our hopes and expectations. It is pretty basic and leaves detailed guidelines to be prepared by the Commission, and these are due, as it happens, today. I have inquired but have not yet received them. Whether they will arrive shortly I do not know.

The major differences of substance between the Commission Opinion on the Review and the text agreed by the Council are as follows. While preserving the priority for young people they identify a numberof categories over 25 whose employment should be promoted—in particular the long-term unemployed and those threatened by unemployment. These, of course, are welcome. Women who wish to return to work, disabled people, migrant workers and particularly those people working in small or medium-sized undertakings who need retraining in new technology are also good suggestions. They still allocate 40 per cent. of the total fund to the superiority regions which I have mentioned before.

They hope that, when the Commission draws up its guidelines, henceforth annually, they will allow for help to suitable projects in small areas of high unemployment which are in regions of relatively low unemployment. The "black spot" proposal has been abandoned but may be covered by asking the Commission to give special attention to areas where there is an exceptionally high rate of unemployment compared with the national average.

As regards the matching of funds, the Council is even more rigid and states that assistance shall be granted at the rate of 50 per cent. of eligible expenditure without exceeding the amount of financial contribution from the public authorities. That means it must be an exact matching.

The agreed dates for submission and adoption should be 21st October (not 1st September as has been suggested) and 31st March (not 31st January). The normal advance payment will be 50 per cent. of the eligible sum (not 60 per cent. as proposed by the Commission). This will have caused some disappointment to many, I have no doubt, but the European Parliament has yet to debate the Council's review and perhaps your Lordships' report may in due course induce some reconsideration. I beg to move.

Moved, That this House takes note of the report of the European Communities Committee on the Review of the European Social Fund. [2nd Report, 1983–84, H.L. 22].—(Lord Seebohm.)

4.24 p.m.

Lord Dean of Beswick

My Lords, may I first congratulate the noble Lord, Lord Seebohm, and his colleagues who served on the Select Committee for the very thorough and obviously efficient and first-class job they have done on behalf of your Lordships. It will be obvious to anyone who has read the report, from the number of witnesses who were interviewed and the number of organisations from which information was taken, that their efforts to find a proper solution and present a report to this House were very wide-ranging indeed.

The report comes back to the basic issue and concludes—as I think the noble Lord, Lord Seebohm, said in introducing the report—that the funds, such as they are at present or as envisaged, are quite inadequate for the schemes or to make any real impact on the problems before us. However, I was delighted to hear his reference to the deep concern over youth unemployment, in a general sense, and to the retraining or training of people who find themselves unemployed through no fault of their own. One of the aspects that disturbs me in the conclusions—I think it is the first conclusion that is reached—is the reference to a lack of applications from the United Kingdom for projects for women. In highlighting this aspect in the report, the noble Lord and his colleagues have perhaps done a more immense service to the women's movement, or the people championing the cause of women in the United Kingdom, than they may imagine. Certainly, I was not aware that such a situation existed and I suspect that many of your Lordships would say the same. Knowing the people who are interested in the advancement of the cause of women in our society, I have no doubt that this point will be taken up and that the proper authorities in the United Kingdom will be made aware of this failing.

I was also interested to hear during the speech of the noble Lord, Lord Seebohm—he made special reference to it and I was extremely grateful—that the Committee took note of the increasing problem of the long-term unemployed. I do not want to be repetitive, but my maiden speech in this House two or three weeks ago was, in fact, in a debate on unemployment. I referred to the ever-increasing numbers of permanent or long-term unemployed. It is that group which believes it is being disregarded by society. They are being bypassed in the crusade to siphon or direct most of the funds to youth unemployment.

I find it extremely sad, and I am sure other noble Lords of all political persuasions will agree, that people in the 40–60 year age group, some of them with special skills that they have displayed for a number of years since leaving school, and so on, through no fault of their own now find themselves on the scrap heap with very little prospect of further employment. Very often they still have a mortgage to pay and children at the developing age and they need considerable funding to keep them solvent and give them some quality of life. I commend the noble Lord, Lord Seebohm, and his colleagues for having highlighted this facet.

Another point which interested me when I read the report, and which I found somewhat amazing—obviously I am not as familiar with the report as the noble Lord and his colleagues, because it is their report—was that one of the criteria that they would probably be adopting was the "three times the national average unemployment" in certain conditions criterion. I believe the noble Lord said that they recommend a reduction of that figure to twice the national average. I think that is more realistic, because there is an anachronism when one talks about regional unemployment. For instance, the region in which I live, West Yorkshire and Humberside, is possibly marginally below the national average. But if one takes parts of Yorkshire in isolation, they have some of the worst pockets of unemployment in the United Kingdom, including South Wales and Northern Ireland. In fact, in one small part of the constituency of Leeds, West, that I formerly represented, known as Bramley, the unemployment was comparable to any black spot in the United Kingdom. It is to the credit of the noble Lord, Lord Seebohm, and his colleagues that they have highlighted this type of thing and would like to bring pressure to bear on behalf of such people.

I was glad to note that the noble Lord also made reference to the speed with which the money ought to be made available when projects are submitted. The part of Yorkshire from which I come has been a beneficiary of EEC funds for this type of activity. They were extremely welcome and were put to an objective use by the recipients. But very often, unless the application is dealt with quickly, the person who initiated it may be disappointed. The project falls through the lack of speed in the money getting to the right place at the right time.

I was also glad to hear the noble Lord, Lord Seebohm, speak on the question of what is sometimes termed additional money. The committee received observations from the Association of Metropolitan Authorities. The association involves solely the local authorities. It indicated that members had made application for assistance for specific schemes, which was granted, but they found themselves the losers at the other end through loss of rate support grant. I can understand the views of the AMA. Its constituent members are elected members who in local government represent over 40 per cent. of the population of the whole of the United Kingdom.

In the main the association covers the Greater London area and what one would term the old large inner city conurbations round such cities as Manchester, Leeds, Liverpool and what used to be called "The Big Six" in the North-East. Those are the areas covered by the AMA and the areas where most of the pressure points are. People from those areas express the view that if money is to be applied for from the EEC regional fund and granted for specific purposes, they might find themselves the victims by losing rate support grant from the Government because of their successful application. If I were once again leading a local authority, that would induce me to take a completely negative attitude and to ask, "Why did I bother in the first place?". It means to say that the money is being given with one hand and taken away with another.

I was also pleased to hear the noble Lord, Lord Seebohm, talk about the voluntary organisations. In helping to provide employment in some of the worst hit areas, the voluntary organisations play an important part through small projects and businesses. They do a wonderful job and I am glad that they may receive better consideration.

I come back to the original point. The noble Lord, Lord Seebohm, put it more eloquently than I probably can. In the context of the problems with which we are trying to deal, the amount of money available is monumentally small. I would hope that the EEC can look to rejigging some of its priorities. I start from the premise that I was not originally pro-European. I still am not. But I accept that we shall be in Europe for the foreseeable future; I think we are probably in it for time immemorial. While we are a member, I consider that it is the function even of those of us who hold my views to get the best possible deal, as we see it. for the people—it would be wrong to use the term "who send us here"—on whose behalf we are expected to express our beliefs. If this type of fund was to receive anything like thepriority of the notorious common agricultural policy fund, we should be talking in terms that would put beyond doubt our continuing membership into any foreseeable future.

I close by again thanking on behalf of the whole House the noble Lord, Lord Seebohm, and his colleagues who served on the committee for the excellent work that they have done. The report gives us many points to think about. It illustrates what is happening and what the committee thinks should happen.

4.35 p.m.

Baroness Seear

My Lords. Ivery much agree with the noble Lords, Lord Seebohm and Lord Dean of Beswick, that the amount of money in the social fund is far too small to cope with the problems with which it is faced. I urge once again—I know that it has been urged so often andthat repetition becomes wearisome—that some of the money going to the CAP should be diverted to the social fund. Whether or not additional money is going into the EEC, there is plenty of room to reduce the CAP and increase the social fund—topay somewhat less attention to the agricultural policy and a very great deal more to the industrial policy and to the social aspects which flow from it, because that is the genesis of the social fund. The so-called social fund was introduced to deal withthe inevitable consequences of the restructuring of industry which was being undertaken with a view to increasing the overall efficiency and wealth creating capacity of member states.

The fund is undoubtedly too small for the problems facing it. However, small though it is, it is not negligible and in some respects it is already very important. It is a pity that more attention and interest is not taken in the social fund. That fact is reflected by the attendance in your Lordships' House this afternoon for this debate. There is a theme running through the report that opportunities for benefiting from the social fund are being neglected in this country through lack of knowledge and of determination to get the benefits that are offered. This stems in no small part from ignorance and lack of realisation of the advantages that can be obtained from attention to the detail of the provisions which are there to make the fund available. After all, in the year 1982 this country got over £283 million out of the social fund. That may not be a vast wealth but it has been very welcome in a great many quarters. I have been connected with small organisations—and perhaps the fund is particularly beneficial to small organisations—which have had great help from the social fund. I should like that to be on record.

However, I should like to follow up what the noble Lord, Lord Dean of Beswick, said about the way in which the money comes through. It is extremely good to be able to get this money, but when oneis embarking on a project in a voluntary organisation and it takes something like 12 months to get the first payment it is, to put it mildly, a bit discouraging. Small organisations have the most appalling cash flow problems. It is very difficult to persuade people to wait for the money to come through.

I recognise the difficulties in Brussels. After all, Brussels is spending public money. One is sometimes left with the impression that it is giving us a gracious gift out of its own pocket. The fact of the matter is that it is spending taxpayers'money—quite a hit of it—which has been raised in this country. It is not really its own personal generosity. It is public money and it is important that Brussels should see that it is properly spent and that no fiddles are indulged in. I recognise that it is extremely difficult to do this by remote control from Brussels. I should, however, have thought that it is not beyond the wit of the Government and their professional advisers, and Brussels and its professional advisers, to find ways to take proper care of public money but at the same time speeding up the payments—because this is really a very serious problem for a great many organisations. That is the first critical point that I should like to make.

In looking at the new tradition, one must welcome recognition of the seriousness of youth unemployment. In the future 75 per cent. of the funds, as I think the noble Lord, Lord Seebohm, said, are to go to deal with the problems of youth unemployment. I am second to none in my recognition of the seriousness of this problem; but there are a large number of other groups in very considerable need and I am not sure that we may not perhaps be overemphasising, relatively, the problems of the unemployed aged under 25 in relation to some of these other groups. It is true that mention is made of them. Some of these groups are explicitly included in the regulations in the final decision which has come through.

I am particularly glad to see that provision for women is being maintained, and funds for women wishing to return into the labour market are mentioned as a particular category which will qualify for funds from the social fund. I want to dwell for one moment on that particular category, because it is a fact that as the noble Lord, Lord Dean, has said—perhaps somewhat surprisingly—women in this country have been singularly unsuccessful in getting the funds which are available. We were told, for instance—I think, if my memory serves me rightly, by Mr. Ivor Richard himself—that no less than 80 per cent. of the money available for training women in non-technical occupations had gone to the Germans. It had gone to the Germans because they were around. More publicity is needed so that people realise that these resources are there. A much more positive attempt is needed, starting with the Government and being taken up by voluntary organisations and local authorities throughout the country, to alert people concerned with schemes of this kind for women in order to take advantage of the cash which is there.

In particular, it is important in connection with the re-entry of women to the labour market, because it is most necessary that many of the women returning should get training in non-traditional jobs—non-traditional for women that is—because the jobs that they left when they left the labour market to look after their families are diminishing and diminishing at a great rate. Unless they get this retraining they are going to be in an extremely difficult position.

Some organisations have taken advantage of this. I have quoted before in your Lordships' House the case of Hatfield Polytechnic which for some years now has been running a specially devised course in accountancy for women returning to the labour market. The time of the course has been adjusted to suit women with domestic responsibilities so they can easily attend. It is a two-year course and it puts them well on the way to obtaining jobs in an area in which all overthe country, in good times and bad, there are jobs available. If it can be done in Hatfield with money from the ESF—because that course was supported by money from the ESF—why can it not be done in all the polytechnics up and down the country?

I make no apology for mentioning this point, as I have done before, because publicity for schemes of this kind is urgently needed. I beg the Government to take steps to see that this kind of opportunity for women-only courses for non-traditional jobs—particularly for older women as this category is explicitly mentioned in the new decisions—should be taken up on a much greater scale than has been done in the past.

The second point that I want to make is about the new proposals. I am echoing what has already been said but I want to emphasise and underline it. It is a pity, I think, that we have not gone further in the development of the idea of the black spot. I recognise the difficulties in defining what is meant by a "black spot", and it is, I suppose, an improvement that we are moving from regions to counties. The fact remains that that kind of geographical identification of need is not really very appropriate at the present time. This is well borne out if you are looking at the problems to be dealt with in schemes for the benefit of ethnic minorities: it is very much easier for members of ethnic minorities to get money in Toxteth but not in Brixton for particular schemes. The same scheme in Toxteth as in Brixton would have a different response if application were made to the social fund. There is something quite ridiculous about this. The fact that Brixton is in the southeast, which makes it an area which is regarded as prosperous, and Toxteth is in the northwest and in an area which is regarded—undoubtedly correctly—as extremely unprosperous, does not really make much difference to the particular groups of members of ethnic minorities in Brixton and in Toxteth who should be benefiting from schemes of this sort. I suspect that we have got to work hard on finding a different way of identifying where the need really is for which support should be given.

I also want to say that it seems to me a very great pity that the EEC has set its face against allowing much more liberal development of these schemes for financing from voluntary bodies, and are insisting that 50 per cent. of the money should come from public authorities. There are—especially where small schemes are concerned—a great many voluntary organisations up and down this country capable of finding and raising money. and which have money, for schemes which they have studied and for which very good value would be obtained but which may not, for one reason or another, attract public funds.

When the commissioner was over here, the committee pressed him very hard to see if there was not some way in which this requirement that there should be 50 per cent. of public funding could be withdrawn; and that it should be possible in the case of voluntary organisations of high repute and with a good track record for running schemes efficiently to be able to apply that money and get ESF money without having public funding. This has been turned down completely and I hope the Government will think about this again; not least because, as was pointed out to Mr. Ivor Richard when he was over here, if you had voluntary organisation funding as a matching ESF funding without public backing, then the whole problem of additionality—which is a polite way of saying the problem of the Treasury swiping the money which is intended for the scheme—would be disposed of, because there would be no way in which the Treasury could get its claws on money if it was voluntary money and ESF money with no public contribution at all.

I very much hope that the Government will think about this again and will see whether they can press for a change—or at least a modification. In the original proposal there was a suggestion that this should be modified. As it came in the final decision, they have reverted to a strict 50 per cent., of funding and that seems to me to be retrogressive.

4.49 p.m.

Baroness Vickers

My Lords, may I also thank the noble Lord. Lord Seebohm. for not only chairing the Committee and this report. but for the very courteous way he did it, always giving Members of the committee a chance to have their word, which is not always done in committee proceedings. It is interesting to note that Britain and Italy are the top receivers of money and our £285 million is divided as follows: £151 million for training as job-creation schemes for the under 25s; £65 million to train adults in assisted areas; and £23 million for training handicapped people. The method of applying for grants takes too long. I shall not go into details which have already been clearly expressed. However, having to go through two channels takes anything from six to seven months, and sometimes 12 months, to achieve results. It was strange to read in reports of the Community's Court of Auditors and the European Commission that in certain countries approved projects are delayed. or the countries never take up their money. The result is that over £200 million will have to be carried over from this year to next year. There must be some reason for this. Is it that the countries cannot wait long enough to get the money? Or do they lack knowledge of how the scheme works? When we are short of money and when, so we are told, we are over-subscribed, it seems extraordinary that we should have this large balance at the end of the year.

We should have more meetings with the MEPs. They should try to spread knowledge of the fund more than they do. They have been active in Parliament. In fact, they achieved 50 per cent. extra grant this year through their debates. I shall not be talking about voluntary organisations because we have an expert in the House who will do so, but I should like to suggest that we invite MEPs to our meetings. I have a meeting for deaf children on Monday. One of the members will be coming to explain what the social fund really means.

I should like to draw attention to the memorandum by Dr. Doreen Collins of Leeds University, who, referring to the Social Fund Committee, on page 118 of our report, states: The changes aredesigned to clarify what the committee is supposed to do and make its work more purposeful. The emphasis is upon general tasks. The committee should: (a) help draft the budget. It should therefore bring forward national expertise about developments in national labour markets and about where priorities should lie. (h) help in revising operating rules because committee members should be able to report on how the system is working. It should help to draft the guidelines. (c) advise on the selection of projects in view of national situations and Community priorities. (d) set up a sub-committee for detailed work, including sifting applications. Those are helpful suggestions. I have quoted them because I think it is wise to set down one or two things that can be followed up.

Dr. Collins adds: The emphasis is upon members of the committee acting as a bridge between the national environment and the Fund so that national experiences and needs are brought to bear on the Fund's decisions and operation, including the selection of applications". There has been mention of the difficulties that may arise with the admission of Spain and Portugal. Both are poor countries. They will need a great deal of help. I wonder whether they will understand how to submit applications. I gather that this is a problem in relation to Greece. Will those countries be given information prior to sending people to the committee?

Unless the fund is greatly increased, there will have to be more changes when these two countries are admitted. I understand that the MEPs were successful in getting a 50 per cent. increase in the social fund in 1983. There was also the help provided by Commissioner Richard who supplied us with interesting information. He has been successful in increasing the budget for the social fund from 7 per cent. to 35 to 36 per cent. We hope that the report will be well read and that it will be given further publicity through the Government or other agencies. To have £200 million left, not by this country but by several others, is a great mistake when we are so short of money and when so many people are in need.

4.55 p.m.

Lord Allen of Abbeydale

My Lords, as a member of the sub-committee I should like to begin by paying my tribute to the manner in which my noble friend Lord Seebohm conducted our deliberations. It was a pity that we had to pause in mid-stream for reasons that the noble Lord has explained, so that the Council of Ministers came to its conclusions without the benefit of our advice. I suppose, however, that there were considerations other than the state of play in Sub-Committee C which were regarded as relevant in fixing the date of the General Election. Anyway, as has been pointed out, the operation of the fund is not being settled on this round for all time to come.

It seemed to me, as our inquiry proceeded, that there were three things that stood out about the social fund. The first is its misleading title to which the noble Lord, Lord Seebohm, referred. This gives rise to quite a bit of misapprehension and also, on occasion, to needless disappointment on the part of some who discover rather too late what the scope of the fund is. Secondly, although it has increased in size—the point is very obvious and has been made by previous speakers—the fund is still not nearly big enough. The fashion seems to be to call it over-subscribed. This does not mean, as might be thought at first sight, that it has too much money, but rather the exact opposite—that there is not nearly enough to go round to meet all deserving applications.

Thirdly, following a point made by the noble Baroness, Lady Seear, although the fund and its purposes are by now pretty well known to the authorities, national and local, and, increasingly, I think, to voluntary organisations, it is still not widely known among the Community. Over the last few weeks, I have asked various people whether they were aware of the social fund and how much this country got out of it. Invariably, I have been met with a look of blank puzzlement.

We hear a lot about the defects of the EEC. It is a pity that we do not hear a bit more about the ways in which this country benefits. The United Kingdom gets a pretty good share of what is going. When I was in Strasbourg, an Italian Member of the European Parliament complained to me with some eloquence that the rules had been so drafted to ensure that the United Kingdom got the lion's share. I thought that a bit hard. It so happens that Italy has done very well indeed out of the fund. But we, here, cannot have all that much complaint about our own allocation.

The one point that I want to make this evening is that, within the overall figure, the share that goes to the voluntary organisations is still disappointingly small when, in this country, perhaps more so than in any other member state, voluntary effort makes such a signal contribution towards our social and economic wellbeing. I realise that there may be some hidden benefit to voluntary organisations. It is possible, for example, that they derive some indirect help from social fund money which finds its way to the Manpower Services Commission for certain aspects of the youth training scheme.

On direct applications, the record is not all that good. The National Council for Voluntary Organisations, making fairlyarbitrary decisions about what organisations can be called voluntary, has calculated that some 27 such organisations in England and Wales have received social fund grants this year. This figure is certainly better than in previous years. The total is getting on for double last year's figure, according to the evidence we received, but some of the grants are minuscule, and the total allocation is still quite a tiny proportion of the United Kingdom's allotment—something like 1 per cent.

The schemes are indeed worthy ones. Let me pick out a couple of illustrations from London, both of them affecting women, which is perhaps appropriate in view of what has been said previously. I mention the Lambeth Women's Workshop on the Parkhall trading estate, which in a year provides 16-week courses in carpentry for some 48 women over the age of 25. There is also the contribution towards the scheme run by the Tower Hamlets Training Forum, which was mentioned in the evidence that we received, for training Bengali women for the clothing industry. Those are just two illustrations taken more or less at random. My point is that there is scope for many more of these schemes up and down the country.

We have not yet seen the very important new guidelines about the detailed operation of the new rules, and until we do see them and have an opportunity to digest them it is difficult to be sure whether the new rules will improve the position for voluntary organisations. However, I fear that there are clearly going to be some continuing grounds for disquiet.

One particular trouble is the business of matching funds, to which reference has been made. One's hopes were raised by the EEC Commission proposals suggesting some relaxation of the requirement that for any scheme to qualify there must be a matching 50 per cent. from public funds. As has been explained, they were contemplating that the public authority contribution could be only 30 per cent. and that 20 per cent. could be raised from other sources. The council decision dashedthose hopes by insisting on a rather more rigid requirement than hitherto of matching funds from public sources of 50 per cent. for all schemes, including innovatory schemes, as 1 understand it. All seems to be lost on this round, but I should like to go along with the noble Baroness, Lady Seear, in expressing the hope that the Minister will be able to give us an assurance that this point will be borne in mind and pressed on future occasions.

Although there have certainly been some administrative improvements, the whole procedure is still a complicated one. The noble Lord, Lord Seebohm, referred in particular to the forms. If past experience is any guide, the forms that will have to be completed are likely to be such as to fill me, as an ex-bureaucrat, with admiration, but are equally likely to be somewhat dispiriting to those in voluntary organisations who have actually to complete them. This year, so far as I can make out, the programme is going to be particularly tight. We are told that the forms should become available during December and that the completed forms have to be in the hands of the Department of Employment by 20th January, with Christmas intervening. As the forms do not have to reach Brussels until mid-March, I wonder whether it would be possible for the noble Earl the Minister to tell us that some leeway can be allowed before the completed forms have to be put in to the department.

Behind all this, the whole set-up is so complex that there is an area of doubt at the margins as to the precise nature of the schemes which qualify under the fund. Although the Department of Employment are invariably helpful, they have not invariably turned out to be right. The decision to have only one date for submissions should help, but even so, the inevitable time-lag between submission and knowing that one is going to get the money, and still more actually getting the money—especially when it is a question of fitting in the timing with the grant of matching funds from a local authority—tends to cause considerable cash flow problems for the smaller organisation and to make the nerve of all but the boldest falter a little.

Finally, there is the point that some of the voluntary organisations feel that they could be of special help in coping with some of the problems affecting the ethnic minorities. But it looks as though the guidelines, for all that they will say about migrant workers, will remain silent as regards these groups. The problems do not necessarily arise in the areas of highest unemployment. Although a few schemes have had some help, the chances of some of the relevant applications receiving the necessary priority cannot be very good. There does seem to be something of a gap here.

I recognise that this is an international scheme, that complications are unavoidable, and also that there are many other deserving applicants. Even so, I cannot help thinking that it is a pity that the voluntary organisations in this country, which have such an outstanding record of achievement and the capability of helping in just the kind of area which the social fund tries to cover, should not have done a little better, to the point that a good many of them tend to be discouraged from putting in applications at all. There has certainly been some improvement and there is certainly no prospect under the current reorganisation of any thing dramatically new being done on this round. But if there are any words of comfort which the Minister can give in this context, I shall not by any means be alone in being glad to hear them.

5.7 p.m.

Baroness Carnegy of Lour

My Lords, unlike previous speakers I was not a member of the committee when it produced its report, but I congratulate them on its contents. I want to say a brief word about one particular aspect of the social fund and to talk about it in relation particularly to local authorities. The part that I want to discuss is the 5 per cent. of the whole social fund which is now earmarked for what the Commission describes as projects of a pilot or innovative nature. These schemes are to be designed specifically to explore the practical possibilities of new ideas, new ways of doing things, so that if they are successful they can be developed on a larger scale within the country concerned and even act as a catalyst in parts of the Community elsewhere.

The sum is not large, although the percentage is larger than it was. Indeed, 5 per cent. of the total fund will mean something of the order of 46 million for innovatory schemes across the whole of the Community. But in his evidence to the committee, Mr. Ivor Richard made plain the Commission's enthusiasm for this particular aspect. This was reflected also in his assurances that officials in Brussels were always ready to discuss possible schemes at an early stage of their development to help local councils design them so that they would maximise the likelihood of obtaining a grant.

It goes without saying that local areas that are able to produce the most original and potentially fruitful ideas are the ones that will attract themoney. It seems exceedingly important that local government people in Great Britain should be keenly aware of just what the possibilities are. Indeed, I should like to suggest that local authorities in this country are, at the present time, well placed to make good use of this part of the fund and, much more importantly, to go so far as playing a lead role in Europe in pioneering new ways for meeting new needs within the constraints and opportunities of modern times.

Until two or three years ago local government people were accustomed to thinking that, when new needs arose, of necessity new policies had to be added to old policies, and of necessity new money had to be added to existing money. With the recession, the onset of cash limits, and the rapidly changing social scene, local government was for a short time nonplussed. With no new money, no apparent public will to reduce or change services which already existed, and at the same time huge and mounting pressure to do something about unemployment, about the position in which young people found themselves, about basic adult education, about training particularly for women in the new technology, and the rest, they simply could not see a way forward.

Whether the public rhetoric revealed it or not, it did not take long for the more imaginative and flexible local councils to realise that they, like many other organizations, had to improve their entrepreneurial skills and begin to work in new ways. Soon all sorts of innovative schemes were being designed by local government in response to new forms of funding which had been made available through the Manpower Services Commission, through the Department of Employment, through the somewhat older urban aid mechanism, and indeed through the European Social Fund itself as it then was.

As a variety of experimental schemes began in this way and were seen in practice to work, so it became politically possible locally to shift resources away from one area of spending into a new one. Pump-priming money from a source outside the funds of the local authority has come to be seen not just as useful in itself but also as an extremely valuable catalyst for change.

Some local councils are more adept at working in this way than others, but it is noticeable that those who do—and I would instance from my own experience in Scotland two regional councils of different political persuasion. Strathclyde and Tayside Regions, which are particularly good at experimenting in this way—are the people who seem best at succeeding in making broad innovative change which works within cash limits.

It seems to me, therefore, that the smallness of the fund should not deter local government councils from finding out about this particular part of the social fund, and beginning to think through innovative schemes into which they might put a small amount of money and, in turn, attract an equal amount from this section of the fund. They might thus pilot something which would show a more general way forward not just for their own area but for the whole country, and perhaps even for other countries.

Might I therefore conclude by suggesting to my noble friend the Minister that he might draw the attention of his right honourable friend to the need for adequate publicity by the Department of Employment, and adequate explanation, to be made available to local government so that this particular catalyst for progress becomes better known.

5.15 p.m.

The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie)

My Lords, I should like to thank the noble Lord, Lord Seebohm, and members of the European Communities Committee, for their well considered report. Although it was presented at a time when the current fund review was not complete, it focuses clearly and helpfully on relevant general issues. I should also like to give thanks to those who gave evidence, particularly Commissioner Richard and Mr. Stabenow, the head of the Social Fund Directorate, who came from Brussels to do so.

It is now almost 11 years since we joined the Community. I think there may still be a tendency to see ourselves as outsiders. We have our suspicions of Brussels bureaucracy, our feelings that we may be losing out, or that other countries are setting the priorities. The social fund provides a striking refutation of such arguments, and I welcome the remarks that were made in this context by the noble Lord, Lord Allen of Abbeydale. It squarely addresses the major social problem which we share with our Community partners—unemployment. It channels Community resources into tackling it in the most practical way—through training, and particularly through help for the young and for the long-term unemployed. The latter group were quite rightly mentioned with emphasis on their needs by the noble Lord, Lord Dean of Beswick. It recognises the need to adapt to new technology. It gives priority to the problems which we face in the United Kingdom.

Since joining the Community we have received an average of nearly 25 per cent. of the fund, a total of nearly £1,000 million, not including the current year. Last year nearly 30 per cent. of the fund was allocated to United Kingdom projects—about £260 million. Nearly 700,000 people benefited from that money. Our share of actual receipts is even higher than our share of allocations because we are more efficient than others in taking up the money allocated to us. The fund does not operate on a system of national quotas, and we gain by putting in relevant applications and following them up efficiently.

Since the fund was set up in 1957 it has had to adapt to very considerable changes. At that time it was concerned largely with promoting labour mobility in conditions of full employment. It has had to adapt first to the enlargement of the Community, and then to the general massive rise in unemployment which has taken place across the whole Community since the fund was last reviewed in 1977. We sometimes talk as though unemployment was a phenomenon restricted to this country. It is not. It is afflicting the Community as a whole.

The fund is the main Community instrument for helping those affected by unemployment, and not surprisingly it has become considerably oversubscribed. Of course, we would like to see the fund grow in real terms, as the noble Lord, Lord Seebohm, and others have urged, and as a proportion of Community spending, so long as this can take place within the overall need for budgetary constraint. In 1982 the fund budget was about £880 million—just under 6 per cent. of the total Community budget. The Government agree with the Committee that this is out of proportion to relative needs when compared with the £7,000 million spent on the common agricultural policy.

The review did not concern itself with the overall size of the fund. It recognised that for practical purposes the fund would continue to be oversubscribed, and it addressed itself to the best way to concentrate its assistance where this could be most effective. Its main proposals were to concentrate fundson helping young people, particularly through training (as I have already said), and to give priority to the parts of the Community which needed it most, because of high unemployment, and it also sought to simplify budgetary and administrative procedures.The United Kingdom Government fully supported these objectives.

The Council of Ministers agreed new rules for the fund last June, based largely on the review. Unfortunately, there has been a delay in implementing the new rules due to a lengthy process of consultation with the European Parliament which was not concluded until the end of October. As a result the Commission has not yet been able to draw up its operating guidelines which will set priorities for assistance. We hope that they will be issued shortly, together with application forms, so that the Department of Employment can deal with applications for the coming year. Time is short because the timetable requires applications to be in Brussels by 13th March. 1 do not think it would be at all easy for us to extend that. We are not yet therefore in a position to say exactly how the new fund will operate. However, the review itself, together with the committee's report. gives scope for useful discussion on the general aims and priorities of the fund.

Lord Allen of Abbeydale

My Lords, I may not have made myself perfectly clear. I did not see any prospect of interfering with the date of 13th March: it was the date by which the forms had to be with the Department of Employment, which I think is some time in January.

The Earl of Gowrie

My Lords, the noble Lord, as always, made himself clear, but obviously the forms will have to he in to the department in good time so that the latter date can be adhered to.

Baroness Seear

My Lords, I do not think that that is an adequate answer. We are being put under great pressure because these forms have not come. It is not the fault of the people who want to apply. If the date of 13th March is immutable—I accept that it has to be—I think this is one of these exceptional occasions when the authorities have to put themselves out so that the general public can get a decent deal.

The Earl of Gowrie

My Lords, I will take on board the points made both by the noble Lord, Lord Allen of Abbeydale, and by the noble Baroness, Lady Seear, and see what I can do.

The main effect of the review and the new fund rules is that 75 per cent. of the fund will be spent on schemes to help young people who currently account for 41 per cent. of the Community's unemployed. The United Kingdom strongly supported the priority given to their needs and the emphasis which will be given to vocational training. In the past we have been able to fund a good proportion of our schemes for young people from social fund allocations. At a very rough estimate, one in five of those on the youth opportunities programme in 1982 was funded by the social fund. We hope that for the youth training scheme, with its appropriately enlarged training content, we will gain an even higher proportion of funding.

In its report the Commission referred to the issue of "additionality"; that is, the extent to which fund money is additional to the resources available to recipients. As far as central Government expenditure is concerned, the present position is that expected receipts from the fund are taken into account when decisions are taken on the resources to be devoted to relevant programmes, for instance as the youth training scheme. Support from the social fund is noted in the Public Expenditure White Paper and the MSC corporate plan. It can thus be shown that the fund enables public expenditure on relevant activities to be significantly higher than it would otherwise be. I do not however think it would be practicable or desirable to seek to establish a more directlink. I have already said that it is essential, not least for the interests of sustainable employment, that the Government should maintain a firm control of public spending. While European Community receipts are given serious consideration in fixing levelsof expenditure, a direct link would not be consistent with that overall aim.

Receipts for non-Exchequer bodies, for instance local authorities, nationalised industries, training boards, private firms and voluntary organisations, are passed on in full to those bodies and are not retained by the Exchequer. Local authorities also receive fund receipts on the understanding that they will be put to balances and the relief of rates.

The rules of the fund require that every fund grant must, in general, be matchedby an equivalent contribution from a public authority. This rule provides the Commission with some assurance that a scheme applied for is worthwhile, will be subject to scrutiny by an authority of the member state and is also a kind of guarantee of safe delivery. The committee's report refers to some relaxation of the rules for matching of fund aid by public authority money—and so have noble Lords who have spoken in this debate—which would allow the normal 50 per cent. funds support to be matched by 30 per cent. public authority support and the remaining 20 per cent. from any other source.

This proposal was eventually dropped and the 50-50 rule still applies, except in the so-called "super priority areas" (for instance, Northern Ireland in the United Kingdom) where the rate is 55 per cent. Social fund to 45 per cent. public authority support. I can tell the House from my experience in Northern Ireland that that is so small and so centrally controlled an area of the Kingdom that it does not provide a great deal of practical difficulty to have that difference. The Government support the principle that assistance should match public expenditure, because this helps to ensure that Community and national priorities work together.

The point was raised by the noble Lord, Lord Seebohm, and by the noble Baroness. It seems to me that public funding is a reasonable condition to ensure delivery of the schemes, and that 50 per cent. seems to be about the right level of commitment for this purpose. Benefits to voluntary bodies can still be very great, especially if fund procedures can be speeded up. I should say to the noble Lord, Lord Dean of Beswick, and to the noble Lord, Lord Allen, that allocations to voluntary bodies have been rising—over £1 million in 1982. We give every encouragement to applications in respect of all eligible schemes.

A further way in which the review aimed to concentrate its assistance was by giving priority to those areas most needing it. It was originally intended that a list of all regions in the Community would be drawn up in order of priority according to objective criteria of need as indicated by relative unemployment and low GDP. However, member states were unable to reach agreement on this. The revised rules provide for the continuation of the existing areas of special priority (Greenland, Greece, the French overseas departments, Ireland, the Italian Mezzogiorno and Northern Ireland) which will obtain up to 38 per cent. of the fund. We welcome this recognition of the special difficulties which Northern Ireland faces. Under its existing special priority status Northern Ireland obtained from the fund some £47 million last year or about £75 for every member of the working population.

The revised rules provide that after the special priority regions have been served, fund aid is to be concentrated on areas of high or long term unemployment or industrial or sectoral restructuring. The commission has been asked to prepare proposals to this end by next July, with a view to their adoption by the council before the end of the year. We do not yet know how the commission will define the other areas to which it will give priority, but we shall certainly press for the problems of the high unemployment areas of the United Kingdom to be given suitable recognition.

One matter to which the committee drew attention was the commission's proposals to deal with "blackspots". The council agreed, in a statement attached to the revised rules, that special attention should be paid to areas where the unemployment rate was "exceptionally high" compared with the national average. We hope this will be of some benefit to areas with special problems in this country, though our main concern is to ensure that the future overall regionalallocation of the fund gives proper recognition to relative needs within the Community.

One further feature of the revised rules is the provision for up to 5 per cent. of the fund to be available to support innovatory projects throughout the Community. Such projects will generally be related to a Community programme adopted by the Council of Ministers (for example, for disabled people or for women) and these will not be subject to a regional restriction. Five per cent. of the fund represents a much larger sum in real terms than has previously been provided for activities of this kind. We shall be watching these developments with great interest.

A major change in the structure of the new fund is that the ten "areas of intervention" under which the fund used to operate will now no longer apply. These covered such groups as disabled people, migrant workers and women. Each area of intervention had its own budget line. These groups will continue to qualify for fund assistance but without a specific budget allocation. This should allow the fund to be more flexible in its operation within the overall priorities established and agreed by the new rules. The administration of the fund has also been simplified. There will in future be only a single type of application form, one application deadline, not two, and money will be paid in fewer but larger instalments.

Schemes for the disabled, and training schemes for women, will now have access to the bulk of the fund, as I said. Whether they receive a greater proportion of the fund in practice will depend on the volume of eligible applications and on the priorities set. There is no reason to believe that they will necessarily be worse off because of the change.

The report, and also this debate, drew particular attentionto the projects for women and there has been a certain amount of publicity recently on the subject. Recent comments have tended to get the question a little out of proportion and there have been claims that the United Kingdom is losing out on the opportunities for training women with fund support. It is true that the United Kingdom had only about 5 per cent. of the budget line for women's training in 1982. That line was only about 3 per cent. of the total fund budget, of which we had 29 per cent. Women arewell represented in training schemes for which fund support is given—we estimate over a third of the trainees concerned. Moreover, our share of the budget line for women's training is improving and we have had a further increase in successful applications in 1983. Every eligible application of this kind is forwarded and we encourage any which are lawful under the Sex Discrimination Act.

On the point raised by the noble Baroness and by others about publicity in respect of women's training. my officials are in constant discussions with the local authorities and the voluntary organisations to encourage suitable applications. Every eligible application is sent to Brussels and, in general, great efforts are being made to get the maximum advantage.

It was gratifying to note the committee's congratulations for the department's efforts to publicise the fund. They will continue to encourage applications as much as they can in this direction. May I say to my noble friend Lady Carnegy that I agree with the new special section of the fund for innovatory projects of 5 per cent. which I mentioned earlier. It has interesting possibilities and my officials will help local authorities and other bodies which wish to push forward eligible applications under the section. Again, we will be giving maximum publicity to this within the next few weeks.

I should like once more to thank the committee for a most useful report which has provided the base for what I am sure will be a worthwhile discussion in the community at large, as it has been in this House this afternoon.

Baroness Vickers

My Lords, before my noble friend sits down, can he say whether he will take action to chase up the £200 million which has been under-spent? Surely people should look into why the money has not been spent and see what has happened.

The Earl of Gowrie

My Lords, I am sorry that I missed my noble friend's point. If I may, I will write to her on that issue.

5.33 p.m.

Lord Seebohm

My Lords, I thank the noble Earl very much for what he has said and for the interest he has taken in this problem. I think there are only two things on which I have reservations; and, on them, I shall read Hansard tomorrow rather more closely. One is the question of additionality. I am not sure that I got that quite right, or that the noble Earl got it quite right. I shall read Hansard tomorrow with some interest.

The other point that I should like to make again is the question of the 50–50 matching grant. The suggestion that it should come down to 50–30 was not made by us but was made by the Commission and was strongly welcomed by us. I think it is absolutely right that the public authorities should put up a reasonable proportion to show that it has their blessing and that they will take some of therisks. I think that 30 per cent. is quite ample to show that degree of involvement. I hope that those two points will be looked at carefully, and I shall certainly look at the former one myself tomorrow. Finally, I should like to thank warmly my noble friends who have joined me in this discussion and for the great help they have given throughout on the committee's work.

On Question, Motion agreed to.