Implementation of measures
provided by the European
Union to support employment
2022 Annual Public Report
2
_____________________________ PRESENTATION _____________________________
At the beginning of 2020, the Covid-19 pandemic led the European Union to provide
various measures to support employment and the economy
1
. From mid-March 2020, the
Commission proposed economic and social measures intended to consolidate and enhance
the measures taken by Member States to respond to the urgency of the crisis, then to stimulate
their economies and the labour market (see timeline detailed below in diagram no. 1).
As part of the European Recovery Plan, France could benefit from €43.3 billion under
two schemes: €3.9 billion from the additional resources provided for cohesion policy in 2021
and 2022 and €39.4 billion from the
Recovery and Resilience Facility (RRF) over the 2021-
2026 period. The RRF funds around 40% of the French Recovery Plan
2
, including up to €7.1
billion in favour of employment and vocational training within the remit of the ministry of labour,
Employment and Economic Inclusion.
The survey showed that the ministry of labour had quickly adopted the measures put in
place by the European Union (I). However, the Court draws attention to the challenges raised
by steering, monitoring and evaluating the “employment”
component of the Recovery Plan in
order to take full advantage of said measures (II).
1
Furlough schemes, sectoral aid, support with recruitment, etc.
2
The “France relance” recovery plan covers the period 2020
-202
2 and amounts to €100 billion.
3
Diagram n°1: timeline of the measures taken by the European Union to deal with the
health crisis up to August 2021
Source: Court of Accounts
4
I -
Fast appropriation by the ministry of labour of the measures
put in place urgently by the European Union
In response to the health crisis, European and French administrations quickly took
emergency measures to support employment. Further leeway has been offered to member
states in the use of European funds (A). Although the ministry of labour has proven responsive
in taking advantage of these measures, it must nevertheless overcome the recurring difficulties
it encounters in order to comply with the rules for managing and controlling the corresponding
funds (B).
A - Priority given to flexible management rather than granting additional
financial resources
European structural and investment funds, in particular the European Social Fund (ESF),
were quickly put to use in the emergency phase thanks to flexibility measures for using them
3
.
1 - Broad scope for redirecting cohesion policy budget appropriations
On 13 March 2020, the European Commission allowed Member States to benefit
exceptionally and temporarily from 100 % funding for operations relating to the 2020-2021
financial year and to get co-funding of expenditure already incurred aimed at strengthening
crisis response capabilities. Projects directly related to the fight against the pandemic have
thus been able to benefit from full funding by the European Union.
The European Union has also authorised the transfer of resources between cohesion
policy funds (in particular, between the ERDF
4
and the ESF), as well as between regions.
Some of these flexibility measures have been implemented by France since March 2020,
in particular with regard to the use of the ERDF
5
.
2 - Preliminary assessment of action taken by the ministry of labour, employment and
economic Inclusion
a) The strategy for using the European Social Fund
In the absence of additional budget appropriations from the ESF, the long-term budget
of which already been used to the tune of 91 %, the resources available to the ministry of
l
abour were limited. At the end of March 2020, approximately €500 million was available under
the national ESF programme. However, only €250 million was directly available to the
Ministry
6
, the remainder having already been delegated to intermediate bodies (Employment
Centre, departments, local plans for integration and employment, etc.), which were able to set
their own priorities in the context of crisis management.
3
See the
Coronavirus Response Investment Initiative (CRII and CRII+)
adopted in March and April 2020.
4
European Regional Development Fund.
5
For example, the fungibility of ERDF and ESF budget appropriations allowing the regions to redeploy under-used
budgets, in order to channel them in particular towards support for businesses.
6
The ministry of labour manages the national ESF programme. It delegates part of the financial resources to various
institutions (operators, departments, etc.). The regions manage the regional programmes, which represent around
30 % of all ESF funding in France.
5
Taking into account the other programmes managed by the ministry of labour (youth
employment initiative and programmes for the overseas departments), 270 operations had
been funded by the end of July 2021 in response to the health crisis, including 169 under the
national ESF programme, for an amount of €114.5 million. Of these 270 operations, nearly
60% fall within the scope of employment support (support for young people and job seekers,
vocational training, digital, health and safety at work, teleworking, etc.).
The ministry took the option of benefiting from 100% funding under two calls for projects
at national level launched in 2020. The first,
Objective: recovery
, was led by the National
Agency for the Improvement of Working Conditions (ANACT) to promote the continuation or
sustainable resumption of work by combining occupational health and business performance.
Objective: recovery - support for VSEs/SMEs in rolling out occupational health and
safety measures
Allocated €5 million over the period from April 2020 to June 2021, the project has been
extended to December 2021.
A preliminary assessment carried out in February 2021 showed that, since November 2020,
1,900 applications had been submitted on-line by companies, and that 910 meetings proving
guidance had been held. 22 companies benefited from short-term one-day support, 145 companies
from individual support and 106 companies from collective support. Applications related in particular
to the implementation of teleworking, the adaptation of organisations linked to the crisis and the
response to pressure within companies.
According to the data available at the end of July 2021, €4.6 million was committed for this
project at a national level, including the overseas departments.
The second call for projects was launched for the benefit of the ministry of National
Education in order to ensure continuity of remote learning during lockdown.
Apart from these two national projects, only about ten operations fully funded by
European resources were launched in 2021
7
, which explains why the average level of EU
funding of operations is only 52% in France.
b) Progress report on the main flexibility measures used introduced in spring 2020
All programmes combined, funds redirected in France to business support represented
€97 million out of the €3.7 billion intended for all Member States.
7
By various intermediate bodies and the ministry
’s decentralised departments.
6
Graphic n°1: main flexibility measures used
in France and in all Member States (in M€)
Source: Court of Accounts, in accordance with European Commission Cohesion Data
Amounts set in September 2021. Amounts shown in red correspond to the total spent.
France has proportionately reallocated less ESF funding to measures to support workers
and vulnerable groups
8
(€146m
9
) than its European Union partners (€4.1
billion for all Member
States). Most of these measures have been aimed at promoting social inclusion and combating
poverty. Loans directly allocated to support jobs represented approximately €30 million:
-
€15.7 million to help workers, businesses and entre
preneurs adapt to change;
-
€7 million aimed at facilitating the sustainable integration of young people into the job
market;
-
€6.1 million for access to lifelong training;
-
€1.5 million in favour of social entrepreneurship and professional integration in soci
al
enterprises and the social economy.
France is also characterised by a dispersion of funding to a multitude of measures and
project leaders, which can complicate management of the corresponding funds.
3 - The absence of co-financing of furlough scheme
Learning the lessons of the 2008-2009 crisis, France has chosen, like many other
countries, to develop the use of furlough scheme to avoid a massive increase in the number
of job seekers along with a loss of skills detrimental to recovery. Companies have made
extensive use of the scheme introduced in March 2020 and, to a lesser extent, of long-term
furlough. In total, their compensation claims amounted to €33.6 billion between March 2020
and July 2021, which represents the most expensive direct job support measure.
However, this measure will not benefit from any European funding in France, unlike other
Member States which have used it either within the framework of the
ad hoc
instrument set up
in spring 2020 by the European Union, or within the framework of the ESF
10
.
8
In particular, people in a precarious situation, whether job seekers or not, the elderly or people with disabilities,
etc.
9
This amount may relate to projects reoriented both to health and to business support (source: Court of Accounts
based on the
Cohesion data
of the European Commission, September 2021).
10
National furlough schemes became eligible for ESF co-financing from 31 March 2020. France has not used this
option, the amounts available being very limited given the financial challenges.
7
The SURE Instrument
11
was created for Member States most affected by the crisis in
spring 2020. France and Germany have chosen not to use this loan scheme in order to give
priority to Member States with a less favourable borrowing capacity. A total of 19 Member
States
12
made use of this facility, for a total amount of €94.3 billion. The first payments began
in October 2020.
At one point, the ministry of labour had considered funding furlough in part
13
using
European financing intended to support the recovery, in the form of grants (see part two).
However, in the end, this option was abandoned in spring 2021, because furlough scheme
was not clearly part of a recovery objective, but was rather considered by the European
Commission as a crisis measure.
B - Lessons to be learned for the future in managing the emergency
1 - Quick and coordinated reaction from the ministry of labour in the emergency phase
From March 2020, the Secretariat General for European Affairs and the ministry of labour
were in regular contact with the directorates general of the European Commission to be able
to quickly implement the measures announced at European level and to support project
owners.
During the first lockdown, the ministry was fully committed to support project owners and
operators. Regular telephone discussions and video meetings notably enabled the ministry to
ascertain the situation of operators during lockdown and how they could resume their activities.
Particular attention was given to exchange with project owners aiming of easing certain
administrative burdens and supporting the cash flow of those most in difficulty.
In addition, instructions facilitated the appropriation of new measures (extension of the
deadline for using appropriations, authorisation of transfers within financial resources,
monitoring of appropriations available).
At last, the National Agency for Territorial Cohesion (ANCT), responsible for coordinating
the various funds, organised itself to respond to the cross-cutting issues of the crisis. From the
start of the pandemic, it was able to assess the most urgent needs and identified the difficulties
encountered in implementing these measures in conjunction with Régions de France
association, managing authorities and Government departments directly affected (ministries of
labour and Overseas territories in the field of employment, the secretariat general for European
Affairs).
2 - Persistent management difficulties to overcome, despite the flexibility granted
In response to the Covid-19 epidemic, the flexibility measures granted by the European
Commission in terms of control and audit of operations cofinanced have remained limited
14
.
The management framework of the ESF has been maintained. The same applies for the main
obligations concerning, in particular, programming of operations, justification of expenses in
terms of co-financing, reimbursement as well as compliance with performance targets.
11
Support to Mitigate Unemployment Risks in an Emergency
(SURE): European instrument for temporary Support
to Mitigate Unemployment Risks in an Emergency, consisting of providing Member States with guaranteed loans.
12
Among which Italy, Spain, Poland, Belgium, Portugal, Romania and Greece.
13
Funding for long-term furlough (APLD) by European recovery instrument had originally been considered to the
tune of €3.8 billion.
14
The European Commission has given audit authorities the option to use non-statistical sampling, based on their
professional judgment, pursuant to exceptional and temporary measures for the 2019-2020 accounting year.
8
However, the annual audits of operations for the 2018-2019 and 2019-2020 accounting
years have highlighted structural difficult
ies in France’s management of the national ESF
programme. The system for audits of operations was affected by malfunctions (the 2019-2020
annual audits could not be completed on time). In addition, a high error rate led the Inter-
Ministerial Committee for Audit Coordination (CICC, Audit Authority for European Funds in
France) to issue a negative opinion in its 2020 annual control report on the national
programme.
In a decision of 6 July 2021
15
, the Court recommended taking the necessary measures
to significantly reduce this error rate. It also recommended that audits of operations, currently
the responsibility of the ministry of labour, should be carried out directly by the CICC as regards
the national ESF programme.
Finally, the planned tagging of Covid-19-oriented operations in information systems
should also ensure more reliability during management verifications.
II - Tough challenges in coordinating and evaluating the
Recovery Plan
Following the adoption of measures to manage the emergency phase, in July 2020, the
European Council decided to launch a European recovery plan, called
Next Generation EU
(€806.9 billion), in order to support and consolidate the economic recovery in the Member
States. Most of these new resources come under the Recovery and Resilience Facility set up
to help fund the National Recovery and Resilience Plans (NRRPs) presented by the Member
States. France’s NRRP was approved by the Council of the European Union on 13 July 2021.
In order to take full advantage of this new funding made available over the period 2021-
2026 (A), France, and in particular the ministry of labour, needs to adapt in order to meet
European obligations for monitoring, coordinating and evaluating the measures included in the
NRRP (B).
A - Significant amount for co-financing employment policies as part of
the recovery
Two new measures derived from the European recovery plan
Next Generation EU
will
enable France to benefit from additional financial contributions: “REACT EU”
16
, for €3.9 billion,
and the “Recovery and Resilience
Facility”, which represents European funding of €39.4 billion
for France, which is much more than the initial 2021-2027 long-term financial framework for
European structural and investment funds (ERDF, ESF+ and the Just Transition Fund).
15
Court of Accounts,
Management of European procedures and resources in the context of measures for
employment following the health crisis
, decision of 6 July 2021. On the difficulties of managing the ESF, see also
Management of European Social Fund financial contribution: malfunctions to be corrected and progress to be
consolidated in terms of performance
, decision of 19 June 2019.
16
Recovery Assistance for Cohesion and the Territories of Europe
.
9
Diagram n° 2: EU recovery funding
Source: Court of Accounts
1 - Additional retroactive budget appropriations as part of the European Recovery
Plan: “REACT EU”
“REACT
-
EU” aims to fund projects related to the recovery until the end of 2023, the
objective being to support access to the job market and to protect employment, including
through furlough schemes. These resources supplement the cohesion policy funds (including
the ERDF and the ESF). Certain derogatory provisions introduced in spring 2020 will also apply
in this context, in particular, 100% funding of operations and retroactive eligibility of operations
from 1
st
February 2020.
With an indicative budget of €3.9 billion, France is the third beneficiary of “REACT
-
EU”,
after Italy and Spain
17
. The ministry of labour should
have €615 million in appropriations under
the national ESF programme, plus €245 million for overseas territories.
17
The amounts allocated to these countries in 2021 were €11.3 billion and €10.3 billion respectively.
10
Diagram n° 3: d
istribution of “REACT
-
EU”
contribution to the scope of the ESF
managed by the Government
Source: ministry of labour, Employment and Economic Inclusion, December 2020
The ministry of labour has chosen to concentrate use of these budget appropriations in
order to increase the financial resources of the Employment Centre
18
, which will benefit from
€463 million, in particular to
support professional integration services for young people
(intensive support for young people, comprehensive support) and new schemes targeted at
long-
term job seekers (“remobilisation pack”).
2 - European recovery contributions to support a wide range of traditional measures in
favour of jobs
Presented by the French Government to the European Commission on 28 April 2021,
the National Recovery and Resilience Plan (NRRP) was adopted by the Council of the
European Union on 13 July 2021. A preliminary pre-funding payment was made on 19 August
2021 for an amount of €5.1 billion
19
.
The part of the plan managed by the ministry of labour, relating to protecting jobs, young
people, disability and vocational training, should benefit from financing under the Recovery
and
Resilience Facility of an amount of €7.1 billion, for total expenditure estimated at €10.9
billion.
18
The Agency for the Employment of Executives (APEC) will also receive €3 million.
19
Payments will be staggered until 2026.
11
Diagram n°4: 18% of European Union financing for NRRP is intended to support jobs
Source: Court of Accounts
The investments and reforms included in the NRRP are part of the France Relance
national recovery plan, covering the period 2020-2022 presented by the Government on 3
September 2020. The European contribution represents approximately 40% of the €100 billion
of this plan. It will be funded by a loan from the European Commission and paid to France in
tranches according to previously defined objectives, aimed at measuring the progress made
in implementing reforms and investment measures.
12
The “Jobs, young people, disability, vocational training” component (represe
nting 18%
of amounts
) is the second biggest component in financial terms, after the “Research and
development, health and territories” component (19%).
The place of employment policies in national recovery and resilience plans: the Italian
and Spanish examples
In addition to achieving the goals of the ecological transition (to which at least 37% of the
budget allocated must be devoted) and the goals of the digital transition (20%), social policies are
also taken into account. Social measures (outside the healthcare sector) and educational measures
represent approximately €102 billion, i.e., 20% of the total of those plans
already submitted by 25
Member States
. Measures relating to the labour market, employment and skills are estimated at €35
billion (i.e., 7% of the Recovery and Resilience Facility). Almost all States have included measures in
favour of skills or employment, in particular, France, Spain and Italy, which were issued
recommendations by the Council of the European Union on this subject.
For comparison, an amount of
€6.
6 billion (i.e., 3.4% of the total)
is anticipated in Italy’s NRRP
for active employment policies, including vocational training, enhanced learning and skills matching.
Spain, meanwhile, has reserved €2.3 billion for the labour market, €2 billion for vo
cational training,
€3.5 billion for the development of digital skills and €2 billion for apprenticeships, i.e., 14% of its
NRRP.
In France, the scope of the employment component is covered by 22 measures
20
, 15 of
which come under the responsibility of the ministry of labour
21
. These relate in particular to
training for jobs of the future, support for apprenticeships, the recruitment bonus and some
measures of the “skills investment plan” (PIC).
Many of these measures, such as the “
youth g
uarantee”
scheme or subsidised contracts,
were already in force but their number of beneficiaries increased in the context of the recovery
plan.
20
Some of these schemes come under the remit of the ministry of national education.
21
The plan also includes four reforms in the area of employment: unemployment insurance, furlough, restructuring
Employment Centre services and health and safety at work.
13
Table n° 1: measures coming under the remit of the ministry of labour
* Personal training account
Source: Court of Accounts, based on the NRRP adopted in July 2021 by the Council of the European Union
3 - Risks in terms of coordination between the different sources of funding over the
period 2021-2026
The 2021-2026 period will be characterised by a large number of European funding
contributions which will have to be managed according to a particularly tight schedule. This
situation requires correct coordination to avoid the risk of double funding
22
.
A beneficiary has the option of having both ESF funding and financing from the Recovery
and Resilience Facility, provided that it can guarantee the traceability of the sources of funding.
In April 2021, the ANCT accordingly distributed a guide to good practices to the authorities
managing these funds, to help them identify the risks of double funding.
22
Regulation (EU) 2021/241 of 12 February 2021 establishing the Recovery and Resilience Facility provides in its
Article 9 that “
Support under the Facility shall be additional to the support provided under other Union programmes
and instruments
.
Reforms and investment projects may receive support from other Union programmes and
instruments provided that such support does not cover the same cost
”.
Area
Mechanism
Measure
Total cost
(M€)
RRF
application
(M€)
Young people
Support for
apprenticeships and
professional training
contract, civic service
Apprenticeship bonus
5,123
2,347
Professional training contract
bonus
858
800
Recruitment bonus
Bonus for hiring young people
956
803
Training in jobs of the
future
Personalised support for 16-18-
year-olds
245
74
Support and integration
Youth Guarantee-Pacea
333
233
Subsidised contracts
685
317
Disability
Bonus for recruiting
disabled workers
Bonus for recruiting disabled
workers
85
43
Vocational training
Employee training
FNE-Formation
800
800
Retraining or promotion through
work-study (Pro-A)
270
270
PIC/Digitalization of
training
PIC - Distance learning
160
160
PIC - Digitised learning content
and content platforms
304
304
CPF contribution* Strategic
professions
25
25
AT Pro (CPF-transition)
100
100
Improving services and
support resources
Improving resources of France
compétences
750
750
Improving resources of the
Employment Centre
250
50
TOTAL
10,944
7,075
14
However, this initiative does not exempt the ministry of labour from close support for
project owners in order to ensure appropriate management of the funds during this period,
characterised both by intense spending and by tight deadlines.
The diversity and large amounts of funding are obvious factors of management
complexity and increased levels of work for the ministry
’s departments. Structural funds
require
a high level of expertise in managing and auditing these funds, even though the risk
management culture remains weak within central administration and decentralised
departments of the ministry of labour. However, the complexity has further increased with the
flexibility measures granted in the emergency phase and with the new financial contributions
allocated in the recovery phase.
In addition, programming periods are overlapping and funding schemes are increasing.
This situation is obviously a source of difficulties in terms of management, coordination and
ability to use funds. It requires both an administrative management capability and skills in
setting up a project, in order to mobilise the massive financial contributions at stake and to
meet the commitment deadlines (see the table below).
Table n° 2: timetable of commitment estimates
In €bn
2021
2022
2023
2024
2025
2026
2027
Total
Cohesion policy fund
ERDF-ESF
2014-2020
1,241
1,241
REACT-EU
3.09
0.82
3.91
ERDF-ESF
2021-2027
2.25
2.25
2.25
2.25
2.25
2.25
2.25
15.75
JTF*
0.26
0.26
0.26
0.06
0.06
0.06
0.06
1.03
Recovery and Resilience Facility
RRF
24.4
15.00
39.4
* Just Transition Fund
Source: ANCT - Guide to the structuring of the Recovery and Resilience Facility with European Cohesion Policy funds, April 2021
B - Lessons to be learned in terms of coordination, control and
evaluation for the period 2021-2026
Each measure of the national recovery plan is accompanied by one or more monitoring
indicators intended to give material form to a qualitative commitment (known as a “milestone”)
or a quantitative commitment (known
as a “target”). The plan’s monitoring indicators were
chosen cautiously by the French authorities, in agreement with the European Commission, to
take into account the uncertainties surrounding the recovery. They form the framework for
evaluating the results of the plan.
The proof that these targets have been reached determines the disbursement of the
planned European financing. In the event of non-compliance with the commitments, this
disbursement may be suspended, in part or even in full. The conditionality of payments on the
duly proven achievement of results is something new compared to the usual methods of
managing the ESF.
15
The 15 measures for which the ministry of labour is solely responsible, require a major
monitoring system and mobilisation of all its departments in order to meet the obligations of
reporting information and internal audit.
To tackle these challenges, in June 2020, the ministry set up a weekly steering
committee meeting chaired by the Delegate General for Employment and Vocational Training,
in order to monitor the progress of these measures. This committee will have to ensure, just
as for the associated target values, rigorous follow-up, in collaboration with the various
operators concerned by the collection and the reliability of the necessary data.
The quality of data collection is fundamental for carrying out the evaluations which
determine allocation of the funding.
Beyond monitoring and evaluation, the plan’s measures are subject to
controls and
reporting obligations to the European Commission. Resorting to new funding in the context of
the recovery will require the organisation of further audits of operations, but also of
management and internal control systems.
The Court draws the attention of the ministry of labour to the vigilance it will have to
exercise, no doubt with the same workforce, in complying with binding obligations throughout
the implementation of the National Recovery and Resilience Plan, i.e., until 2026, in order to
benefit from the expected funding.
16
__________________ CONCLUSION AND RECOMMENDATIONS __________________
In spring 2020, the European Union offered Member States diversified solutions to
respond to the urgency of the health crisis, by allowing them to redirect existing resources from
European structural and investment funds and by creating a new financial loan instrument
based on European solidarity to support employment, which France has chosen not to use.
Admittedly, France was active in negotiations with the European Union and resolutely
took advantage of the leeway offered by redeploying ESF funds as closely as possible to needs
in the emergency phase.
However, the ministry of labour found itself faced with more
difficulties in clearly defining
its strategy with a view to recovery and in acquiring management, monitoring and evaluation
tools adapted to the challenges of the coming period. The contribution of new funding, in
particular during the 2021-2023 period, will further highlight management difficulties,
particularly with regard to the ability to use up all the funds available.
It is therefore important for the ministry of labour to adapt its tools to cope with this
particularly complex period and to take full advantage of European funding within its scope.
The 2021-2026 period will require great attention to evaluate results in the employment sector.
However, the obligations to monitor the measures of the National Recovery and
Resilience Plan also constitute opportunities the ministry of mabour must resolutely grasp in
order to consolidate the internal control culture within its central and decentralised
departments, improve the efficiency of its organisation and strengthen the management and
control procedures for the European funds.
The Court also makes the following recommendations:
1.
strengthen the steering of operations benefiting from European funding during the 2021-
2026 period (ministry of labour, employment and economic Inclusion);
2.
anticipate operational difficulties in terms of management and control in order to ensure
sound use of European funding, in particular during the 2021-2023 period (ministry of
labour, employment and Integration, in conjunction with the ANCT and the CICC);
3.
ensure rigorous monitoring and evaluation of the measures implemented as part of the
National Recovery and Resilience Plan in order to take full advantage of European financial
resources (ministry of labour, employment and economic Inclusion).