The European Structural & Investment Funds Regulations, Mechanics and Relevant Actors

Executive Summary

The European Structural and Investment Funds (ESI funds) deliver a critical mass of investment for the achievement of Union goals. The adoption of all Partnership Agreements and Operational Programmes of the 2014-2020 period signals the start of an exciting new phase for the Union with investment impact set to benefit many millions of EU citizens and residents into the future.  The potential of the 2014-2020 funding period to support sustainable and inclusive societies in Europe is bought to the fore in the commitment of funds to end institutional care and transition to community based services supporting independent living for all adults and family/family like care for children. The Regulations and Guidance documents clearly embrace the view that the transition from institutional care to community based living and support services responds to rights and not just needs and is a mandatory change process. 

This informative paper sets out the Regulations and Guidance documents relevant to supporting the transition, detailing the mechanics and operation of the ESI funds, the monitoring, reporting and evaluation requirements as well as the bodies responsible for management and control that are set up at national level in each Member State.

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Table of Contents

Community Living for Europe: Structural Funds Watch........................................3The 2014-2020 Legislative Framework governing the Funds................3Introduction to the European Structural and Investment Funds...........................3Common Provision Regulation No. 1303/2013......................................................4Management, monitoring and control..................................................................9Reporting and evaluation...................................................................................12The Fund Specific Regulations..........................................................14European Regional Development Fund Regulation (EU) No. 1301/2013............14

Provisions for innovative actions.....................................................................16Example measures to be funded by the ERDF................................................17

European Social Fund Regulation (EU) No. 1304/2013.......................................19Provisions for social innovations......................................................................21Example measures to be funded by the ESF...................................................22

Community Living for Europe: Structural Funds Watch

Community Living for Europe: Structural Funds Watch is an independent pan-European monitoring and evaluation initiative concerned with whether and how the ESI Funds are being spent to ensure a right to community living for all.  The initiative is funded by LUMOS and based in the Centre for Disability Law and Policy at the National University of Ireland Galway. It is guided by a Steering Committee comprised of LUMOS, the Centre for Disability Law and Policy, European Disability Forum, European Foundation Centre, the Equal Rights Trust, Age-Platform Europe and the European Expert Group on the Transition from Institutional to Community-based Care.

The new legislative framework for the 2014-2020 programming period is the result of concerted advocacy over many years on the part of these and many other organisations across Europe pointing to a historic change on paper. On the basis of hard evidence we advocate for the continual improvement in the application and monitoring of the Funds, particularly the European Regional Development Fund and the European Social Fund.

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The 2014-2020 Legislative Framework governing the Funds

Introduction to the European Structural and Investment Funds

Cohesion policy is to be delivered through three funds: the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund (CF)1. These three funds together with the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF) make up the ESI Funds.  

The Funds operate on a seven-year programming cycle and are governed by Regulations. Regulations are binding legislative Acts, they are immediately enforceable as law in all Member States and must be applied in their entirety across the EU2.  The new legislative framework introduces significant reforms to Cohesion Policy in order to streamline and harmonise actions that are tailored to the needs of the Member States for maximum impact on growth and jobs. Adopted on 17th December 2013 the new framework is characterised by an overarching Common Provision Regulation (CPR) that sets out common rules for all five funds3. Complementing these common rules are Fund Specific Regulations that set out fund specific rules concerning the type of activities to be supported by each of the five funds specific mission4. The legal framework for ensuring the transition from institutional care to community based living through the use of the funds is comprised of the CPR and the Fund Specific Regulations for the European Social Fund (ESF) and the European Regional Development Fund (ERDF)5. Article 9 of the CPR sets out eleven Thematic objectives of the Funds, these objectives are to contribute to the achievement of Union goals namely economic, social and territorial cohesion and the Europe 2020 strategy for smart, sustainable and inclusive growth. Each objective is translated into several investment priorities specific to each of the five funds that are contained in the Fund Specific Regulations. Thematic objective 9 of the funds is promoting social inclusion, combatting poverty and any discrimination that translates into several ESF and ERDF investment priorities that specifically include the transition from institutional to community based services.

1 The Cohesion Fund focus is primarily transport and environment applying only to EU Member States which have a GDP lower than 90 % of the EU – 27 average, Croatia not taken into account.2 Article 288 Treaty on the Functioning of the European Union (TFEU)3 Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 OJ L 347, 20.12.2013, p. 320–469)4 http://ec.europa.eu/regional_policy/en/information/legislation/regulations/ 5 Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006; Regulation (EU) No 1304/2013 of the European Parliament and of the Council of 17 December 2013 on the European Social Fund and repealing Council Regulation (EC) No 1081/2006

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Common Provision Regulation No. 1303/2013The Common Provision Regulation (CPR) contains 5 parts. Part 1 sets out the subject matter, definitions and explanation of terms used throughout the Regulation. Article 1 of the CPR in Part 1 states that the Fund Specific Regulations may establish fund specific rules to complement Part 2, Part 3 and Part 4 of the CPR.  If there is doubt as to the application between these provisions, Part 2 of the CPR shall prevail.

Part 2 of the CPR contains general provisions applicable to all ESI Funds except when it explicitly allows for derogations. Article 4.1 states that the funds are to provide support through multi-annual programmes that must:

complement national regional and local intervention; deliver the Europe 2020 strategy and the Treaty based objectives of

economic, social and territorial cohesion; take account of the Europe 2020 Integrated Guidelines6, relevant Country

Specific Recommendations7, the Council recommendations8 and the National Reform Programmes in the framework of the European Semester.

The general principles set out in Article 4 CPR for the overarching implementation and operation of Union support for the ESI funds have their origin in the EU Treaties. General principles include, the complementarity of the funds meaning that the funds are to be used in accordance with the needs of the Member States paying particular attention to the Country Specific Recommendations and National Reform Programmes within the European Semester.  The principle of proportionality is to be observed in relation to the preparation, implementation, monitoring, reporting, evaluation, management and control of programmes with regard to the level of funding allocated.  

Proportionality is linked to the general EU principle of subsidiarity contained in Article 5 of the Treaty on European Union (TEU)9. Under the principle of subsidiarity, areas that are outside the exclusive competence of the Union, and therefore shared between the Member States and the EU10, the EU shall only act if the objectives of the proposed action cannot be achieved by the Member State at central, regional or local level.  If the scale of the proposed action or the likely effects (impact or expected results) of the proposed action are better achieved at EU level then it can act in order to achieve its aims. In the case of the ESI funds, Article 4 CPR emphasises that the implementation of the funds

6 Council Recommendation on broad guidelines for the economic policies of the Member States and of the Union -Part I of the Europe 2020 Integrated Guidelines SEC(2010) 488 final (Brussels, 27.4.2010); Council Decision on guidelines for the employment policies of the Member States -Part II of the Europe 2020 Integrated Guidelines COM(2010) 193 final (Brussels, 27.4.2010) available http://ec.europa.eu/eu2020/pdf/Brochure%20Integrated%20Guidelines.pdf 7 Article 121(2) TFEU8 Article 148(4) TFEU9 Consolidated version of the Treaty on European Union (OJ C 326, 26.10.2012, p. 13–390) 10 Article 4 TFEU; areas of shared competence between the EU and the Member States include employment and social policy and economic, social and territorial cohesion.

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are to be in ‘close cooperation between the Commission and Member States in accordance with the principle of subsidiarity’11.

The need for coordination is emphasised between each of the five funds and, between the Funds and other Union policies, strategies and instruments such as the European Fund for Strategic Investments12, Horizon 2020, LIFE+, Asylum, Migration and Integration Fund, COSME, Erasmus+ and the Connecting Europe Facility. The Commission has released guidance for beneficiaries of the ESI Funds and related EU funds in order to promote coordination and complementarity of funding instruments13. This guidance includes a specific section on the use of the funds under thematic objective 9 promoting social inclusion and combatting poverty alongside examples of such co-funded projects in the Czech Republic, Hungary and Germany14.

Member States are to carry out their programming and preparation tasks in Partnership with a broad range of relevant partners established in Article 5 of the CPR15. Implementation of the Funds are to be within a framework of shared management between Member States and the Commission16 except for the Connecting Europe Facility (CEF) transport projects, innovative actions at the initiative of the Commission under Article 8 of the ERDF Regulation17, technical assistance at the initiative of the Commission18 and support for direct management under the EMFF Regulation.  The principle of sound financial management is to be observed including economy, efficiency and effectiveness19 as laid down in Article 30 of the Financial Regulation20.  Effectiveness of the Funds during all stages of implementation, monitoring, reporting and evaluation are to be ensured21 while the various responsibilities and roles of the Commission and Member States are to be carried out with the aim of reducing the administrative burden on beneficiaries thereby easing access to the Funds22.

11 Article 4(3) Common Provision Regulation (EU) No 1303/201312 European Structural and Investment Funds and European Fund for Strategic Investments Complementarities: Ensuring Coordination, Synergies and Complementarity (European Union, Brussels, February 2016) available http://ec.europa.eu/regional_policy/sources/thefunds/fin_inst/pdf/efsi_esif_compl_en.pdf 13 European Union, Guidance for Beneficiaries of European Structural and Investment Funds and related EU instruments (Luxembourg: Publications Office of the European Union 2014)14 ibid 46-4815 Article 4(4) Common Provision Regulation (EU) No 1303/201316 Article 4(7) Common Provision Regulation (EU) No 1303/201317 see Article 8 ERDF Regulation (EU) No 1301/201318 see Article 58 Common Provision Regulation (EU) No 1303/201319 Article 4(8) Common Provision Regulation (EU) No 1303/201320 see Regulation (EU, EURATOM) 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/200221 Article 4(9) Common Provision Regulation (EU) No 1303/201322 Article 4(10) Common Provision Regulation (EU) No 1303/2013; see the role of the High Level Group on Simplification established by Commission Decision C(2015) 4806 final (Brussels, 10.7.2015)

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The Member States and the Commission must ensure that support from the ESI funds is in line with certain horizontal principles including partnership and multi-level governance (Article 5 CPR), non-discrimination (Article 7 CPR) and sustainable development (Article 8 CPR).  Horizontal principles cut across all stages of funding including preparation, programming, implementation, monitoring and evaluation.  This means that projects supporting the transition from institutional care to community based living that do not ensure the consultation and involvement of bodies responsible for promoting social inclusion such as disabled persons organisations, older persons organisations and child and family organisations in the implementation, monitoring and evaluation stages must not be supported by the Funds.  Similarly, projects that might have a negative impact on the environment or disadvantage women, children, persons with disabilities and older persons must not be supported. The use of the ESI funds is to be strategic with clear established objectives and a common framework to guide Member States toward the best possible use of the funds to ensure maximum impact. Article 9 of the CPR sets out eleven thematic objectives that each of the ESI funds is to support and which are broken down into specific actions for each of the funds in the Fund Specific Regulations. Securing the transition from institutional care to community based living and family/family-like living for children is an action to be achieved under thematic objective 9 ‘promoting social inclusion, combating poverty and any discrimination’.

To ensure the harmonious, balanced and sustainable development of the Union Article 10 of the CPR establishes a Common Strategic Framework that is set out in detail in Annex I CPR. The Common Strategic Framework provides strategic guiding principles to help Member States achieve integrated development in the pursuit of Union objectives by using the ESI Funds in coordination with other Union instruments, policies and the horizontal principles. The horizontal principles of the Common Strategic Framework include partnership and multi-level governance, sustainable development, promotion of equality between men and women and non-discrimination, Accessibility, addressing demographic change and, climate change, mitigation and adaption. The Common Strategic Framework highlights certain action to be taken on the part of Member States to realise the horizontal principles. Under partnership and multi-level governance Member States must examine the need to strengthen the institutional capacity of partners in order to develop their potential in contributing to the effectiveness of their partnership23. The emphasis placed on ensuring and cultivating partnership that is effective is important, recognising firstly that partners may experience barriers to their effective involvement and secondly, that Member States must actively support and facilitate partnership and multi level governance in order for it to be effective. Article 5 of the CPR establishes that a code of conduct on Partnership in the form of a Delegated Act must set out how the Member States may use the ESI Funds, including technical assistance24, to strengthen the institutional capacity of relevant partners25. 23 Annex I (5.1.2) Common Provision Regulation (EU) No 1303/201324 Article 59 Common Provision Regulation (EU) No 1303/201325 Article 5(3)(e) Common Provision Regulation (EU) No 1303/2013

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Article 17 of the European Code of Conduct on Partnership26 advises that the Managing Authority shall examine the need to make use of technical assistance to support strengthening the institutional capacity of partners.

Taking into account Member States specific economic, social and territorial needs in the context of the yearly European Semester, each Member State must draw up a strategic plan with clear investment priorities in the form of a Partnership Agreement27. This Agreement is to be drawn up by the Member State in cooperation with the partners referred to in Article 5 of the CPR and in dialogue with the Commission based on procedures that are ‘transparent for the public’28. Partnership Agreements are to cover all five of the ESI Funds and in line with the Common Strategic Framework set out the planned use of the Funds. The Partnership Agreement must be consistent with the Europe 2020 strategy, relevant Country Specific Recommendations and demonstrate coordination between the ESI funds and other Union instruments and funding streams to ensure an integrated approach in Union development. Core elements of the Partnership agreement include Member States strategic choices namely selected thematic objectives, allocations of funding, main results expected, a list of proposed Operational Programmes, commitments to ensuring effective administrative capacity and the reduction of the administrative burden on beneficiaries29. The CPR requires Member States to concentrate support from the funds ‘on interventions that bring the greatest added value’ to achieving Europe 2020 targets in light of territorial needs30. Thematic concentrations in line with Member States territorial development status are set out in the Fund Specific Regulations.

The Commission also work with National authorities in drawing up Operational Programmes that translate the investment priorities and objectives of the Partnership Agreement into a coherent intervention strategy specific to the Member State territory31. Article 26 of the CPR specifies Member State Operational Programmes are to cover the period 1st January 2014 to 31st

December 2020. Operational Programmes must be drawn up in cooperation with the partners as specified in Article 5 of the CPR based procedures that are transparent for the public32. Core elements of the Operational Programme include the selection of investment priorities linked to the chosen thematic objectives, specific objectives and results to be achieved, allocations of funding and justification (intervention logic) for the investment choices. Operational Programmes must include a financing plan, a list of major projects, identification of specific needs and demographic challenges in the Member State and financial, output and result indicators forming the basis for monitoring, 26 Commission Delegated Regulation (EU) No 240/2014 of 7 January 2014 on the European code of conduct on partnership in the framework of the European Structural and Investment Funds (OJ L 74, 14.3.2014, p. 1–7)27 Articles 14-17 Common Provision Regulation (EU) No. 1303/2013 - Partnership Agreements are to cover the period 1st January 2014 to 31st December 202028 Article 14 Common Provision Regulation (EU) No. 1303/201329 Article 15 Common Provision Regulation (EU) No 1303/201330 Article 18 Common Provision Regulation (EU) No 1303/201331 Articles 26-31 Common Provision Regulation (EU) No 1303/201332 Article 26 Common Provision Regulation (EU) No 1303/2013

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evaluation and review of performance33. The Operational Programmes are the main platform for the ex ante conditionalities that must be fulfilled by Member States and act to ensure favourable investment conditions before funding is released34. Where the conditions are partially or wholly unfulfilled the Operational Programmes must contain Action Plans setting out planned actions, designated bodies and a timeline toward fulfilment of each ex ante conditionality by 31st December 201635. Article 26 of the CPR specifies that the Member States and the Commission must ‘cooperate to ensure effective coordination in the preparation and implementation of programmes’. While the principle of proportionality must be observed there is clear provision for the Commission to play a more active role with the Member State in the implementation of programmes that on evidence, has proven particularly beneficial in several Member States36.

At the programming stage (Partnership Agreement and Programmes), Member States have to make a clear link between ESI Fund intervention and the Europe 2020 strategy, with particular focus on the relevant country-specific recommendations. A significant change in comparison with the previous programming periods is that this link must be maintained throughout the implementation stage. If new relevant country-specific recommendations are issued which require support from the ESI Funds, the Commission may request that Member States make appropriate adjustments to the Partnership Agreements and the Programmes. Following adoption of the Partnership Agreements and programmes, consistency with the European Semester will be ensured through two mechanisms laid down in Article 23 of the CPR. The first mechanism is Re-programming; the Commission may request a Member State to review and propose amendments to its Partnership Agreement and relevant programmes, where it is necessary to support the implementation of relevant Council Recommendations or maximise the growth and competitiveness impact of the ESI Funds in Member States receiving financial assistance. When a Member State fails to take action in response to this request, the Council may, upon the Commission’s proposal, suspend part or all of payments for the programmes or priorities concerned. The decision on lifting any suspensions will be taken once the Member State has proposed amendments as requested by the Commission. The second mechanism is Economic Governance Procedures; the Commission will submit a proposal to the Council to suspend part or all of the commitments or payments for the programmes of a Member State if it does not comply with the rules regarding the Excessive Deficit Procedure, the Excessive Imbalance Procedure or, for Member States under financial assistance, the related adjustment programme. The Council will then decide on suspension and, where the Member State has taken appropriate corrective action, on lifting suspension. In any case, suspensions should be proportionate and subject to the ceilings set out in Article 23(II) of the CPR.

33 Article 27 Common Provision Regulation (EU) No 1303/201334 Article 19 Common Provision Regulation (EU) No 1303/201335 Article 19 Common Provision Regulation (EU) No 1303/201336 see the role of the Taskforce for Better Implementation in eight Member States http://ec.europa.eu/regional_policy/en/policy/how/improving-investment/task-force-better-implementation/

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Poor regulatory and policy frameworks as well as administrative and institutional bottlenecks in the Member States undermined the effectiveness and impact of previous investment from the ESI funds. In the spirit of learning from past mistakes and to ensure better use of the funds, the new legislative framework introduces specific conditions that must be fulfilled by the Member States, before funding is released. The ex ante conditionalities are to ensure that all institutional and strategic policy arrangements are in place, creating favorable investment conditions thereby maximizing the impact of available funds. The Commission may suspend all or part of the Member States allocation from the Structural Funds if they do not comply with the ex ante conditionalities that are set out in Annex XI Part I and Part II of the CPR37. The Commission released detailed Guidance documents in respect of the ex ante conditionalities providing important definitions of terms and explanations of what each condition and criteria mean38.

There are two types of conditions, first the Thematic ex ante conditionalities apply to a specific sector or policy and are specifically aligned to the Thematic Objectives of the Funds (e.g. active inclusion, research and development)39. The General ex ante conditionalities have horizontal application and apply to all sectors and policies (non-discrimination, disability, public procurement, statistical systems and result indicators)40. There are three thematic ex ante conditionalities each requiring certain criteria for fulfillment that are attached to thematic objective 941. Ex ante conditionality 9.1 is attached to thematic objective 9 ‘promoting social inclusion, combating poverty and any discrimination’ and the corresponding ESF and ERDF investment priorities set out in the Fund Specific Regulations42. Ex ante conditionality 9.1 requires ‘The existence and the implementation of a national strategic policy framework for poverty reduction aiming at the active inclusion of people excluded from the labour market in the light of the Employment guidelines’43. The Commission defines a strategic policy framework as a document or set of documents ‘established at national or regional level, which sets out a limited number of coherent priorities established on the basis of evidence and a timeframe for the implementation of those priorities and which may include a monitoring mechanism’44. In the case of a poverty reduction strategy, the Commission advises that the strategy should be in line with the Employment guidelines45 and have the ‘main characteristics of the comprehensive and integrated active 37 Article 19(5) Common Provision Regulation (EU) No 1303/201338 Internal Guidance on ex ante conditionalities for the European Structural and Investment Funds Version 2.0: August 2014, Part I ; Guidance on ex ante conditionalities for the European Structural and Investment Funds Part II 13th February 2014.39Internal Guidance on ex ante conditionalities for the European Structural and Investment Funds Version 2.0: August 2014, Part I p 340 ibid41 9.1 active inclusion, 9.2 integration of marginalised Roma communities and 9.3 on health; see Annex XI Part 1 Common Provision Regulation (EU) No 1303/2013, p 448-45042 Article 3(1)(b)(i) ESF Regulation (EU) No 1304/2013; Article 5(9)(a) and (b) ERDF Regulation (EU) No 1301/201343 ex ante conditionality 9.1 Part 1 Annex XI Common Provision Regulation (EU) No 1303/2013, p 44844 Guidance on ex ante conditionalities for the European Structural and Investment Funds Part II 13th February 2014, p 258

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inclusion strategy described in the 2008 Recommendation on active inclusion’46. Five criteria for fulfillment of the ex ante conditionality 9.1 are set out in Annex XI Part I of the CPR which must all be fulfilled47. The national strategic policy framework must:

1. provide a sufficient evidence base to develop policies for poverty reduction and monitor developments

2. contain measures to support the poverty and social exclusion target defined in Member State National Reform Programmes which include the promotion of sustainable and quality employment opportunities for people at high risk of social exclusion, including those from marginalised communities.

3. must involve relevant stakeholders in combatting poverty.4. depending on the identified needs, include measures for the shift from

institutional to community based care.5. upon request and where justified relevant stakeholders must be provided

with support in the submission of project applications and for the implementation and monitoring of that project should it be selected.

The phrase ‘depending on the identified needs’ aims to make a clear distinction between those Member States who have shifted to community-based care and those that have not yet done so. In those Member States where needs have been identified (as the shift to community-based care has not yet been completed), the ex-ante conditionality requires that their strategic policy frameworks on poverty reduction include measures to support the shift to community-based services48. The European Commission established “identified needs” for deinstitutionalization in twelve Member States: Bulgaria, Czech Republic, Estonia, Greece, Hungary, Lithuania, Latvia, Poland, Romania, Slovenia, Slovakia and Croatia49. These Member States must therefore include ‘measures for the transition from institutional to community-based care’ in their national strategic policy framework for poverty reduction aiming at active inclusion.

45 Council Decision 2010/707/EU of 21 October 2010 on guidelines for the employment policies of the Member States OJ L 308, 24.11.2010, p. 46–51; Council Decision 2012/238/EU of 26 April 2012 on guidelines for the employment policies of the Member States OJ L 119, 4.5.2012, p. 47–4846 Guidance on ex ante conditionalities for the European Structural and Investment Funds Part II 13th February 2014, p 258 – 259; Commission Recommendation of 3 October 2008 on the active inclusion of people excluded from the labour market (notified under document number C(2008) 5737) OJ L 307, 18.11.2008, p. 11–14; see also Commission Staff Working Document ‘Follow-up on the implementation by the Member States of the 2008 European Commission recommendation on active inclusion of people excluded from the labour market - Towards a social investment approach’ SWD(2013) 39 final (Brussels 20.2.2013)47 Internal Guidance on ex ante conditionalities for the European Structural and Investment Funds Version 2.0: August 2014, Part I, p 1248 ibid 26049 European Expert Group on the Transition from Institutional to Community-based Care Toolkit on the use of European Union Funds for the Transition from Institutional to Community-based Care (Revised version 2014) http://www.deinstitutionalisationguide.eu/wp-content/uploads/2016/04/Toolkit-07-17-2014-update-WEB.pdf p 22

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Part 3 of the CPR sets out general provisions applicable only to cohesion policy funding (ERDF, ESF and CF) and are to complement the general provisions of Part 2 CPR. Article 89(1) states the mission of these three funds is to contribute to developing and pursuing the actions of the Union leading to the strengthening of its economic, social and territorial cohesion.  Actions supported by these three funds shall contribute to the delivery of the Union strategy for smart, sustainable and inclusive growth (Europe 2020).  To achieve this mission, two goals are to be pursued –

1. Investment for growth and jobs in Member States and regions, to be supported by the Funds; and

2. European territorial cooperation, to be supported by the ERDF50. The European territorial cooperation goal, also known as Interreg, is not subject to several of the reforms of cohesion policy such as the ex ante conditionalities51. Funding under this goal amounts to €10 billion and supports 79 Interreg programmes promoting trans-boundary cooperation (cross-border, transnational and interregional) providing “a framework for joint action between Member States, to find common solutions to shared problems”52. The ‘Investment for growth and jobs’ goal that covers all cohesion policy funding is our primary focus for the purposes of ensuring the transition from institutional care to community based living as contained in the new legislative framework for 2014-2020. Articles 89 – 99 in Part 3 set out general provisions under the ‘Investment for growth and jobs’ goal relating to geographic coverage, financing, non-transferability of resources and programming. Articles 90-92 detail the financial framework for Cohesion Policy followed by specific funding and percentage allocations for the two goals.  The additional adjustments (i.e Cyprus) and Allocation Methodology of funding are set out in Annex VII of the CPR.

The rules of Additionality are to apply to programmes under the Investment for growth and jobs goal53.  This means support from the Funds must not replace public spending of the Member State, the Funds are to be additive to Member State public expenditure and be equivalent to the amount of public spending from the previous programming period 2007-2013.  Compliance with Additionality is to be verified before programming in the Partnership Agreements, in 2018 as a mid-term verification and in 2022 as an ex post verification, the rules of which are detailed in Annex X of the CPR.  The Commission, taking into account the economic situation of the Member State, may impose financial corrections in the case of non compliance with the rules of Additionality54. In accordance with Article 95 CPR the Commission published an overall assessment of Additionality annexed to a Communication from the

50 Article 89 Common Provision Regulation (EU) No 1303/201351 Article 19(8) Common Provision Regulation (EU) No 1303/201352 Annex 1, COM (2015) 639 final 14th December 201553 Article 95 Common Provision Regulation (EU) No 1303/201354 Article 95(6) Common Provision Regulation (EU) No 1303/2013

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Commission reporting on the adoption of all Member State Partnership Agreements and Operational Programmes55.

Article 96 CPR details the content, adoption and amendment of operational programmes under the Investment for growth and jobs goal.  These programmes can be fund specific and region specific or adopt an integrated approach concerning more than one region category, combine complementary investment priorities from the ERDF, ESF and CF under one thematic objective or, combine complementary investment priorities from different thematic objectives.  Member States operational programmes must contain priority axes that correspond to the chosen thematic objectives and comprise one or more investment priorities of that objective in line with the fund specific rules.  Each investment priority must detail its specific objectives, common result indicators, examples of actions to be supported, identification of main target groups, guiding principles for the selection of operations and result indicators.

Complementing part 2 of the CPR on general monitoring and evaluation, Articles 110-117 in Part 3 elaborate on monitoring, evaluation, information and communication specific to Cohesion Policy funded programmes. Part 4 also establishes complementary rules to the general provisions of Part 2 concerning general provisions applicable to the Funds and the EMFF.  These include management and control systems and authorities detailing the procedural designation and functions of the Managing Authority and Certifying Authority as well as the functions and cooperation rules with Audit Authorities (Articles 122-128 CPR).   Financial management including payments to beneficiaries and the decommitment procedure are detailed in Articles 129 – 136 followed by the preparation, examination and acceptance of accounts, closure of operational programmes and suspension of payments in Articles 137-148 CPR.

Management, monitoring and control

Member States must designate three authorities that are to manage and control their Operational Programmes56. General principles applicable to all management and control systems are set out in Part 2 Article 72 CPR and must respect the principles of sound financial management in accordance with Article 30 of the Financial Regulation57. The Managing Authority can be a national, regional or local public authority or body or a private body, the Certifying Authority can be a national, regional or local public authority or body and the Audit Authority can be a national, regional or local public authority or body that must be functionally independent from the managing and certifying

55 Annex III COM(2015) 639 final Brussels 14th December 2015 http://ec.europa.eu/contracts_grants/pdf/esif/invest-progr-timing-submission-adopt-pa-and-progr_en.pdf 56 Article 123 Common Provision Regulation (EU) No 1303/201357 Regulation (EU, EURATOM) 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002

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authorities58. Payments from the Commission will only be made following the correct designation procedure of the Managing and Certifying Authority that are set out in Article 124 CPR59. The Managing Authority has overall responsibility for the management of the Operational Programme covering functions of annual reporting, selection of operations, financial management, control and on-the-spot verifications of operations60. It must establish a computerized system to record and store data on each operation necessary for monitoring, evaluation, financial management, verification and audit, including data on individual participants in operations61. Specific rules in the form of a Delegated Act are laid down in relation to the data to be recorded and stored within the monitoring system in line with Article 125(8)62. In line with Article 125(9) the Delegated Act includes minimum requirements for the audit trail in respect of account records to be maintained and the supporting documents to be held by the managing authority, certifying authority, intermediate bodies and the beneficiaries of the funds63.

The Member State must set up a committee within three months of the Commission adopting an Operational Programme to monitor the implementation of the programme in agreement with the Managing Authority64. The Managing Authority must support the work of the Monitoring Committee in particular by providing it with the ‘information it requires to carry out its tasks, in particular the progress of the programme toward achieving its objectives, financial data, indicators and milestones’65. The monitoring committee composition is to be decided by the Member State however it must include representatives of relevant Member State authorities and intermediary bodies as well as the partners referred to in Article 5 CPR66. The process of delegation to a monitoring committee must be transparent and each member is to have a voting right67. Article 110 sets out the specific functions of the monitoring committee as follows:

1. The monitoring committee shall examine in particular: (a) any issues that affect the performance of the operational programme; (b) progress made in implementation of the evaluation plan and the follow-up given to findings of evaluations;

58 Article 124 Common Provision Regulation (EU) No 1303/201359 Article 135 Common Provision Regulation (EU) No 1303/201360 Article 125 Common Provision Regulation (EU) No 1303/201361 Article 125(2)(d) Common Provision Regulation (EU) No 1303/201362 Article 24 Commission Delegated Regulation (EU) No 480/2014 of 3 March 2014 supplementing Regulation (EU) No 1303/2013 of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund63 Article 25 Commission Delegated Regulation (EU) No 480/2014 of 3 March 201464 Article 47 Common Provision Regulation (EU) No 1303/201365 Article 125(2)(a) Common Provision Regulation (EU) No 1303/201366 Article 48 Common Provision Regulation (EU) No 1303/201367 Article 48(1) Common Provision Regulation (EU) No 1303/2013

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(c) implementation of the communication strategy; (d) implementation of major projects; (e) implementation of joint action plans; (f) actions to promote equality between men and women, equal opportunities, and non-discrimination, including accessibility for persons with disabilities; (g) actions to promote sustainable development; (h) where applicable ex ante conditionalities are not fulfilled at the date of the submission of the Partnership Agreement and operational programme, progress on actions to fulfil the applicable ex ante conditionalities; (i) financial instruments.

2. By way of derogation from Article 49(3)68, the monitoring committee shall examine and approve: (a) the methodology and criteria used for selection of operations; (b) the annual and final implementation reports; (c) the evaluation plan for the operational programme and any amendment of the evaluation plan, including where either is part of a common evaluation plan pursuant to Article 114(1)69; (d) the communication strategy for the operational programme and any amendment of the strategy; (e) any proposal by the managing authority for any amendment to the operational programme.

The Certifying Authority is charged with drawing up and submitting payment applications to the Commission, certifying the accounts and expenditure, ensuring a computerized data system of such information and keeping track of recoverable and/or withdrawn amounts from operations70. The audit authority is to ensure that audits are carried out on the proper functioning of the management and control system of the operational programme and to ensure audit work is in line with internationally accepted audit standards71. The audit authority is charged with drawing up an audit opinion and a control report that must set out the main findings of audits including deficiencies found in management and control systems and proposed actions to remedy these deficiencies72. The audit authority must prepare an audit strategy to be updated annually setting out the audit methodology, sampling methods and planning of audits for the current accounting year and two subsequent accounting years. In 68 Article 49(3) Common Provision Regulation (EU) No 1303/2013 states ‘The monitoring committee shall be consulted and shall, if it considers it to be appropriate, give an opinion on any amendment of the programme proposed by the managing authority’.69 Article 114(1) Common Provision Regulation (EU) No 1303/2013 states ‘An evaluation plan shall be drawn up by the managing authority or Member State for one or more operational programmes. The evaluation plan shall be submitted to the monitoring committee no later than one year after the adoption of the operational programme’.70 Article 126 Common Provision Regulation (EU) No 1303/201371 Article 127(1) and (3) Common Provision Regulation (EU) No 1303/201372 Article 127(5) Common Provision Regulation (EU) No 1303/2013

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line with Article 127(6) CPR the Commission adopted an Implementing Act laying down detailed rules as regards the audit strategy, the audit opinion and the annual control report73. In line with Article 127(7) CPR the Commission adopted a Delegated Act that details the scope and content of audits of operations74, methodology for the selection of the sample of operations75 and audit of accounts76. Further to Article 127(8) the Delegated Act specifies the terms of use concerning data collected during audits carried out by Commission officials or authorised Commission representatives that is to be available to the European Court of Auditors and the European Anti-Fraud Office77.

Reporting and evaluation

Article 50 of the CPR establishes the requirement of the Managing Authority to submit an annual implementation report each year from 2016 up to and including 2023 on the implementation of programmes for the previous financial year. A final report on implementation must also be submitted to the Commission for all ERDF, ESF and CF programmes78. Article 111 of the CPR sets out specific content of the annual implementation reports for the Investment for growth and jobs goal that must be submitted by 31st of May each year79. In the case of ESF programmes Article 5 of the ESF Regulation requires each managing authority to transmit, together with the annual implementation report, electronic data for each priority axis broken down by investment priority. Data must include the output and result indicators set out in Annex I of the ESF Regulation and, in derogation of Article 50(2) CPR, shall relate to values for partially or fully implemented operations80.

The 2016 annual implementation report may set out, where relevant, actions taken by the Member States to fulfill the ex ante conditionalities and is due by the 31st May 201681. The 2016 implementation report must cover the 2014 and 2015 financial years as well as the period between the starting date for eligibility of expenditure and 31st December 201382. The Commission is to inform the Member State within two months after receiving the implementation 73 Commission Implementing Regulation (EU) 2015/207 of 20 January 2015 laying down detailed rules implementing Regulation (EU) No 1303/2013 of the European Parliament and of the Council as regards the models for the progress report, submission of the information on a major project, the joint action plan, the implementation reports for the Investment for growth and jobs goal, the management declaration, the audit strategy, the audit opinion and the annual control report and the methodology for carrying out the cost-benefit analysis and pursuant to Regulation (EU) No 1299/2013 of the European Parliament and of the Council as regards the model for the implementation reports for the European territorial cooperation goal74 Article 27 Commission Delegated Regulation (EU) No 480/201475 Article 28 Commission Delegated Regulation (EU) No 480/201476 Article 29 Commission Delegated Regulation (EU) No 480/201477 Article 26 Commission Delegated Regulation (EU) No 480/201478 Article 50(1) Common Provision Regulation (EU) No 1303/201379 Article 111(2) Common Provision Regulation (EU) No 1303/2013 advises special reporting provisions for the annual implementation reports in the years 2017 and 2019 that are to be submitted by 30th June. 80 Article 5(3) ESF Regulation (EU) No 1304/201381 Article 50(2) Common Provision Regulation (EU) No 1303/201382 Article 111(1) Common Provision Regulation (EU) No 1303/2013

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report of its observations and within five months of receiving the final implementation report in 202383. Where the Commission makes observations on concerning issues affecting the implementation of programmes, the managing authority must provide all necessary information with regard to the observations and, within three months the measures taken to address these observations84. Article 50(9) advises that the annual and final implementation reports together with a summary of content for European citizens shall be made available to the public. Article 53 CPR requires the Commission to transmit each year from 2016 a summary report to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. This report is to be based on the Member States annual implementation reports and a ‘synthesis of the findings of the available evaluations of programmes’85.

Article 51 of the CPR establishes an annual review meeting that is to be organized each year from 2016 up to and including 2023 between the Commission and the Member State with the aim of examining the performance of each operational programme, taking into account the annual implementation report. The Member State and Commission may agree not to hold an annual review meeting for a programme in any year except for 2017 and 201986. In 2017 and 2019 every operational programme in the Member State must be examined in the annual review meeting, taking account of the annual implementation and the 2017 and 2019 progress report87. Further to the strategic approach of Part 2 of the CPR, Article 52 requires each Member State by the 31st August 2017 and the 31st August 2019 to submit to the Commission a progress report on the implementation of the Partnership Agreement as at the 31st December 2016 and 31st December 2018 respectively. The partners in Article 5 CPR are to be involved by the Member States in the preparation of the progress reports that includes the participation of the monitoring committees88. In line with Article 5(3)(d) CPR the Commission adopted a Delegated Act known as the European Code of Conduct on Partnership detailing the involvement of the relevant partners in the preparation of progress reports89. The Delegated Act specifies that the involvement of partners in the progress report must, in particular, make an ‘assessment of the role of partners in the implementation of the Partnership Agreement and the overview of the opinions given by the partners during the consultation, including, where appropriate, the description of the way in which the opinions of partners have been taken into account’90. In line with Article 52(4) CPR, the Commission adopted an Implementing Act that sets out the model to be used when submitting the progress report to ensure uniformity91. The Commission may request additional information from the Member State within two months of receiving the progress report if the 83 Article 50(7) Common Provision Regulation (EU) No 1303/201384 Article 50(8) Common Provision Regulation (EU) No 1303/201385 Article 53(1) Common Provision Regulation (EU) No 1303/201386 Article 51(3) Common Provision Regulation (EU) No 1303/201387 Article 51(2) Common Provision Regulation (EU) No 1303/201388 Article 5(2) Common Provision Regulation (EU) No 1303/201389 Commission Delegated Regulation (EU) No 240/2014 of 7 January 2014 on the European code of conduct on partnership in the framework of the European Structural and Investment Funds90 Article 14 Commission Delegated Regulation (EU) No 240/2014 of 7 January 201491 Annex 1, Commission Implementing Regulation (EU) 2015/207 of 20 January 2015

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information provided is incomplete or unclear and may therefore affect the quality and reliability of the assessment92. On the basis of the progress reports, the Commission must prepare a strategic report summarising the progress of the Member States to be submitted to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions by the 31st December 2017 and 31st December 201993. The latter bodies will be invited to hold a debate on the Commissions strategic report, the Council in particular shall debate the contribution of the ESI funds to the achievement of the Europe 2020 strategy specifically to ‘improve the quality of spending and the effectiveness of the policy in line with the European Semester’94. On the basis of this debate, the Council should provide input to the assessment made at the spring meeting of the European Council on the ‘role of all Union policies and instruments in delivering sustainable job-creating growth across the Union’95. From 2018 and every two years following this, the Commission must report on its most recent strategic reports on the contribution of the ESI funds to the Europe 2020 strategy in its Annual Progress Report to the spring meeting of the European Council96.

The Fund Specific Regulations

European Regional Development Fund Regulation (EU) No. 1301/2013

The ESI Funds are to support thematic objective 9 ‘promoting social inclusion, combating poverty and any discrimination’ in order to contribute to the Europe 2020 strategy and the economic, social and territorial cohesion of the Union97. The treaty basis of the European Regional Development Fund (ERDF) that is to ‘redress the main regional imbalances in the Union’ can be found in Article 176 of the TFEU. Article 174 of the TFEU specifies the ERDF must contribute to the aim of reducing regional disparities between the levels of development of the various regions and reducing the backwardness of the least favoured regions. The ERDF Regulation98 sets out the scope of ERDF support in Article 3 and translates thematic objective 9 into four investment priorities in Article 5. Two of these investment priorities are specifically linked to achieving the transition from institutional care to community based living (deinstitutionalisation)99. In order to contribute to the investment priorities set out in Article 5, the ERDF 92 Article 52(3) Common Provision Regulation (EU) No 1303/201393 Article 53(2) Common Provision Regulation (EU) No 1303/201394 Preamble point 51 and Article 53(2) and (3) Common Provision Regulation (EU) No 1303/201395 Preamble point 51 and Article 53(3) Common Provision Regulation (EU) No 1303/201396 Article 53(4) Common Provision Regulation (EU) No 1303/201397 Article 9 Common Provision Regulation (EU) No 1303/201398 Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the Investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ L 347, 20.12.2013, p. 289–302);99 ex ante conditionality 9.1 ‘investment priorities’ Annex XI, Part 1 Common Provision Regulation (EU) No 1303/2013; Guidance on ex ante conditionalities for the European Structural and Investment Funds Part II 13th February 2014, p 257

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Regulation outlines six broad activities that the ERDF is to support, three of which are relevant for supporting the transition100:

d) investment in social, health, research, innovation, business and educational infrastructure

e) Investment in the development of endogenous potential through fixed investment in equipment and small-scale infrastructure; including small-scale cultural and sustainable tourism infrastructure, services to enterprises, support to research and innovation bodies and investment in technology and applied research in enterprises.

f) networking, cooperation and exchange of experience between competent regional, local, urban and other public authorities, economic and social partners and relevant bodies representing civil society, referred to in Article 5(1) of Regulation (EU) No 1303/2013, studies, preparatory actions and capacity building.

Reformed Cohesion Policy focuses its resources on targeted growth areas. Article 4 of the ERDF Regulation sets out the thematic objectives that the ERDF is to concentrate its support in order to contribute to the investment for growth and jobs goal. ERDF support is primarily focused on four thematic objectives namely, strengthening research, technological development and innovation (thematic objective 1), enhancing access to, and use and quality of, ICT (thematic objective 2), enhancing the competitiveness of SMEs, of the agricultural sector for the EAFRD and of the fishery and aquaculture sector for the EMFF (thematic objective 3) and supporting the shift towards a low-carbon economy in all sectors (thematic objective 4).In more developed regions with a GDP above 90% of the EU 27 average (Croatia not taken into account) at least 80% of total ERDF resources at national level shall be allocated to two or more of thematic objectives 1, 2, 3 and 4 of Article 9 Regulation (EU) No 1303/2013101. Further to this at least 20% of the total ERDF resources at national level shall be allocated to thematic objective 4 in Article 9 of Regulation (EU) No 1303/2013102. Transitional regions with a GDP between 75-90% of the EU 27 average (Croatia not taken into account) must spend at least 60% of total ERDF resources on two or more of thematic objectives 1, 2, 3 and 4 of Article 9 Regulation (EU) No 1303/2013 and at least 15% of total ERDF resources are to be spent on thematic objective 4103. Less developed regions with a GDP below 90% of the EU 27 average (Croatia not taken into account) must spend at least 50% of total resources on two or more of thematic

100 Article 3 (d), (e) and (f) ERDF Regulation (EU) No 1301/2013101 Article 4.1(a)(i)102 Article 4.1(a)(ii)103 Article 4.1(b)(i)–(ii)

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objectives 1, 2, 3 or 4 of Article 9 Regulation (EU) No 1303/2013 and at least 12% of total ERDF resources are to be spent on thematic objective 4104.

Article 5 states the ERDF shall support the following investment priorities that are set out for each of the eleven thematic objectives in accordance with the disparities, development needs and growth potential of the Member State territory. The National Reform Programmes and Country Specific Recommendations of the European Semester must be taken into account when analysing the needs of the territory. The ERDF shall support the achievement of thematic objective 9 ‘promoting social inclusion, combating poverty and any discrimination’ by:

a) Investing in health and social infrastructure which contributes to national, regional and local development, reducing inequalities in terms of health status, promoting social inclusion through improved access to social, cultural and recreational services and, the transition from institutional to community based services105

b) Providing support for physical, economic and social regeneration of deprived communities in urban and rural areas106

The recitals of the ERDF Regulation provide context and guidance further to the above stated investment priorities and are therefore included as important provisions in guidance produced by the Commission, specific to the transition from institutional to community based care107.

(15) In order to promote social inclusion and combat poverty, particularly among marginalised communities, it is necessary to improve access to social, cultural and recreational services, through the provision of small-scale infrastructure, taking account of the specific needs of the disabled and the elderly

(16) Community-based services shall cover all forms of in-home, family-based, residential and other community services which support the right of all persons to live in the community, with an equality of choices and which seek to prevent isolation or segregation from the community

Provisions for innovative actions

Article 8 of the ERDF Regulation presents opportunities in the context of achieving thematic objective 9 and supporting the shift to community based support services for all. Article 8 provides for the ERDF to support, at the

104 Article 4.1(c)(i)-(ii)105 Article 5(9)(a) ERDF Regulation (EU) No 1301/2013106 Article 5(9)(b) ERDF Regulation (EU) No 1301/2013107 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014)

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initiative of the Commission, innovative actions in the area of sustainable urban development in accordance with Article 92(8) of the CPR. These actions shall include ‘studies and pilot projects to identify or test new solutions which address issues related to sustainable urban development and are of relevance at Union level’108. In addition, the partners in Article 5 CPR are to be encouraged by the Commission to be involved in the preparation and implementation of innovative actions109. Derogating from the requirements of thematic concentration in Article 4 of the ERDF Regulation, innovative actions may support all activities necessary to achieve the thematic objectives of the funds and the corresponding ERDF investment priorities110. Innovative actions can therefore be programmed under thematic objective 9 and its corresponding ERDF investment priorities111 in more developed, less developed and transitional regions. According to the preamble recital 8 of the ERDF Regulation:

‘It is necessary to promote innovation and the development of SMEs, in emerging fields linked to European and regional challenges such as creative and cultural industries and innovative services, reflecting new societal demands, or to products and services linked to an ageing population, care and health, eco-innovation, the low-carbon economy and resource efficiency’.

€330 million of Structural Funds resources for the investment for growth and jobs goal are allocated to innovative actions under direct or indirect management by the Commission in the area of sustainable urban development112. In accordance with Article 8(3) and Article 14 ERDF Regulation the Commission adopted a Delegated Act laying down detailed rules concerning the principles for the selection and management of innovative actions to be supported by the ERDF113. The Commission must designate one or more entities or bodies to be entrusted with the budget implementation tasks for innovative actions at Union level114. This ‘entrusted entity’ shall select innovative actions on the basis of calls for proposals, taking account of themes defined by the Commission services on an annual basis115. The Delegated Act specifies any urban authority of a local administrative unit or any association or grouping of urban authorities of local administrative units comprising at least 50 000 inhabitants in a city, town or suburb may apply for support to undertake innovative actions116. The selection of innovative actions must satisfy five criteria set out in the Delegated Act that includes ‘the involvement of relevant 108 Article 8(1) ERDF Regulation (EU) No 1301/2013109 Article 8(1) ERDF Regulation (EU) No 1301/2013110 Article 8(2) ERDF Regulation (EU) No 1301/2013111 Article 5(9)(a) and (b) ERDF Regulation (EU) No 1301/2013112 Article 92(8) Common Provision Regulation (EU) No 1303/2013113 Commission Delegated Regulation (EU) No 522/2014 of 11 March 2014 supplementing Regulation (EU) No 1301/2013 of the European Parliament and of the Council with regard to the detailed rules concerning the principles for the selection and management of innovative actions in the area of sustainable urban development to be supported by the European Regional Development Fund114Article 1 Commission Delegated Regulation (EU) No 522/2014 115 Article 2(1) Commission Delegated Regulation (EU) No 522/2014116 Article 2(2)(a) and (b) Commission Delegated Regulation (EU) No 522/2014

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partners in the preparation of the proposal’117. The maximum award for each innovative action is €5 million and it should be implemented within three years118. Article 8 and the supporting Delegated Act offers the opportunity for civil society organisations, NGOs and bodies representing social inclusion to work in partnership with their local authorities to identify, study, pilot and test innovative actions. This is particularly opportune in the context of supporting ERDF investment priorities under thematic objective 9. A Factsheet produced by the Commission on Integrated Sustainable Urban Development advise that the Commission is to establish an Urban Development Platform comprising 300 cities throughout Europe119. The platform is to be a mechanism for raising awareness among European citizens of the contribution of cohesion policy and the Europe 2020 strategy while also ‘facilitating integrated and innovative actions for sustainable urban development and capitalising on the results’120. Example measures to be funded by the ERDF

Example measures to be funded by the ERDF to promote and ensure the transition to community based living are set out in guidance from the Commission and include:

the development and/or adaption of social, health and education infrastructure for the provision of community based services,

the development of accessible housing in the community, the development of supported housing options, Investment in social housing available to those leaving institutional care home adaption (physical adaptions, ICT and e-health), childcare infrastructure (crèche, after school, early childhood support

services) in the community family-like placements for children in the community that must be in line

with the UN Guidelines for the Alternative Care of Children121.

In addition, infrastructure once used, or in current use, for institutional care should be the subject of planning strategies for viable and logical reuse and most vitally ‘do not involve the provision of residential care for any group’122. The guidance recognizes that the transition to community based living requires careful planning and given the often poor conditions in institutional care settings may require improvements in such existing infrastructure. The use of the ERDF for such improvements is strictly limited and must form part of the Member States broader strategic plan for community based living and therefore must be ‘phased out in the course of the transition process’123. It is particularly important to note that the guidance clearly states ‘building or renovating long-117 Article 2(3)(c) Commission Delegated Regulation (EU) No 522/2014118 Article 2(5) and (6) Commission Delegated Regulation (EU) No 522/2014119 ‘Integrated Sustainable Urban Development’ Cohesion Policy 2014-2020 Factsheet http://ec.europa.eu/regional_policy/sources/docgener/informat/themes2012/urban_en.pdf 120 ibid121 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014)122 ibid123 ibid

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stay residential institutions is excluded from ESI funding support, regardless of their size124. In similar fashion, the use of small scale infrastructure such as small group homes and/or foster care for children play a necessary part in the transition process. Several Member States have utilized small group homes and foster care as part of their deinstitutionalization strategies however, the Commission have taken care to advise Member States who have adopted such an approach that ‘work needs to continue to ensure the effective delivery, the good quality and financial sustainability of all new services on the ground125. While forming a necessary part of the process, small group homes and foster care involve the separation of children from their families therefore, preventive and support measures in the community must be adequately prioritized in order to continue the transition process126. Echoing the European Guidelines and Toolkit of the European Expert Group on the Transition from Institutional to Community- based Care127, Commission guidance advise that the size of a building or the number of persons should not be used in isolation to judge whether existing or prospective supported infrastructure can be considered a community-based service or simply a scaled-down institution128. The base line assessment should instead focus on whether the prospective or supported infrastructure provides a ‘setting allowing for the possibility for independent living, inclusion in the community (including physical proximity of the location) and high-quality care’129. A key factor in the process is identified by the Commission who advise the need to ring fence funds as ‘the progressive closing down of larger institutions should allow for the reallocation of existing national budgetary resources to the new facilities’130. In particular we see the importance of the complementarity of funding, learning from the previous programming period the Commission advise an ‘integrated use of funds – including EU and national funds - is indispensable in the programming of deinstitutionalisation measures’131. European Social Fund Regulation (EU) No. 1304/2013

The ESF Regulation132 specifies the mission and scope of the European Social Fund (ESF), together with the related investment priorities addressing the thematic objectives, and lays down specific provisions concerning the type of 124 ibid125 Commission Staff Working Document, Country Report Bulgaria 2016 Including an In-Depth Review on the prevention and correction of macroeconomic imbalancesSWD(2016) 72 final (Brussels 26.2.2016) 46126 Georgette Mulheir ‘Ending Institutionalisation: an analysis of the financing of the deinstitutionalisation process in Bulgaria’ (Lumos, 2014) 5-6127 The Common European Guidelines and Toolkit on the use of European Union Funds produced by the European Expert Group on the Transition from Institutional to Community- based living are available http://deinstitutionalisationguide.eu/128 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014)129 ibid130 ibid131 ibid132 Regulation (EU) No 1304/2013 of the European Parliament and of the Council of 17 December 2013 on the European Social Fund and repealing Council Regulation (EC) No 1081/2006 (OJ L 347, 20.12.2013, p. 470–486)

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activities that may be financed by the ESF. The tasks of the ESF have a treaty basis in Article 162 of the TFEU which must contribute to the treaty based objective of economic, social and territorial cohesion in accordance with Article 174 TFEU. The ESF is to take account of the requirements established in Treaty law that include a guarantee of adequate social protection, the fight against social exclusion and protection of human health133. The fund specific mission of the ESF is to benefit people, including disadvantaged people such as the long-term unemployed, people with disabilities, migrants, ethnic minorities, marginalised communities and people of all ages facing poverty and social exclusion134.

For the first time a minimum share of the Cohesion Policy budget (23.1%) is allocated to the European Social Fund that has risen to 24.8% at the designation of the Member States135. In addition, at least 20% of the total ESF funding in each Member State must be allocated to measures supporting thematic objective 9 ‘promoting social inclusion, combatting poverty and any discrimination’136. Following the adoption of all Member States Operational Programmes the actual share designated to social inclusion measures has risen above the 20% minimum to 25.6% of the ESF137. The ESF is to support four thematic objectives namely promoting sustainable and quality employment and supporting labour mobility (Thematic Objective 8), promoting social inclusion, combating poverty and any discrimination (Thematic Objective 9), investing in education, training and vocational training for skills and lifelong learning (Thematic Objective 10) and enhancing institutional capacity of public authorities and stakeholders and efficient public administration (Thematic Objective 11). The four thematic objectives are translated into a total of nineteen investment priorities that are set out in Article 3 of the ESF Regulation. Each Operational Programme that is to receive ESF funding must concentrate support on up to five of the nineteen investment priorities138. More developed regions must concentrate at least 80% of their ESF allocation on up to five investment priorities139. Transitional regions must concentrate at least 70%140 and less developed regions at least 60%141 on up to five investment priorities.

Article 3(1)(b) of the ESF Regulation translates thematic objective 9 ‘promoting social inclusion, combating poverty and any discrimination’ into six investment priorities. Two of the investment priorities are specified in guidance released by the Commission on the transition from institutional care to community based

133 Article 9 TFEU134 Article 2(3) ESF Regulation (EU) No 1304/2013135 COM(2015) 639 final (Brussels, 14.12.2015)136 Article 4.2 ESF Regulation137 EC Communication138 Article 4 ESF Regulation (EU) No 1304/2013139 Article 4.3(a) ESF Regulation140 Article 4.3(b) ESF Regulation141 Article 4.3(c) ESF Regulation

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living and services142 and the ex ante conditionality linked to thematic objective 9143.

(i) Active inclusion, including with a view to promoting equal opportunities and active participation, and improving employability144

(iv) enhancing access to affordable, sustainable and high quality services, including health care and social services of general interest145.

The ESF requires actions on the part of managing authorities of operational programmes in less developed and transitional regions to encourage adequate participation of the social partners in actions supported by the ESF146. In order to achieve this, managing authorities must ensure that ‘an appropriate amount of ESF resources are allocated to capacity building activities, in the form of training, networking measures, and strengthening of the social dialogue, and to activities jointly undertaken by the social partners’147. In addition adequate participation of and access by NGOs in and to actions supported by the ESF must be encouraged and more concretely, managing authorities must ensure an appropriate amount of ESF resources are allocated to capacity building of NGOs in less developed and transitional regions148. The Commission specify that in order to ensure the transition to community based care and services, strategies should be ‘designed and implemented in consensus with service users’ representatives, service providers and relevant stakeholders’149. Importantly the guidance advises the need for transition measures to be part of a broader ‘strategic vision’ ensuring long-term sustainability of measures such as ‘the continued operation of infrastructure beyond the timespan of the programme’150. Commission guidance suggest the implementation phase of such strategies may require a ‘strong coordinating entity at national level, backed up by a strong partnership involving all relevant stakeholders’151.

Importantly the transition from institutional to community-based care is explicitly included in Article 8 of the ESF Regulation under the promotion of 142 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014) 143 Guidance on ex ante conditionalities for the European Structural and Investment Funds Part II 13th February 2014, p 257144 Article 3(1)(b)(i) ESF Regulation (EU) No 1304/2013145 Article 3(1)(b)(iv) ESF Regulation (EU) No 1304/2013146 Article 6(2) ESF Regulation (EU) No 1304/2013147 Article 6(2) ESF Regulation (EU) No 1304/2013148 Article 6(3) ESF Regulation (EU) No 1304/2013149 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014)150 ibid151 ibid

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equal opportunities and non-discrimination. The Member States and Commission are to promote and mainstream the principle of non-discrimination further to Article 7 of the CPR that requires the prevention of any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation during the preparation and implementation of programmes. In particular Article 7 of the CPR requires accessibility for persons with disabilities be taken into account throughout preparation and implementation of programmes. Mainstreaming the principle of non-discrimination is to ensure that all stages of the policy making process including design, implementation, monitoring and evaluation incorporate from the outset, an equality perspective in order to tackle systemic and multiple forms of discrimination152. The specific actions contained in the investment priorities that are to be supported by the Member States and the Commission aim to combat all forms of discrimination and to facilitate the transition from institutional to community-based care153. Recital 19 of the ESF Regulation further states that:

‘The ESF should support the fulfilment of the Union’s obligation under the UN Convention on the Rights of Persons with Disabilities with regard inter alia to education, work, employment and accessibility. The ESF should also promote the transition from institutional to community-based care. The ESF should not support any action that contributes to segregation or to social exclusion.’

Provisions for social innovations

Social innovation features prominently in the ESF Regulation that is to be promoted throughout all areas of action supported by the ESF and ‘in particular with the aim of testing, evaluating and scaling up innovative solutions…in order to address social needs in partnership with the relevant partners and, in particular, social partners’154. Member States are to identify in their operational programmes or at a later stage during implementation, fields for social innovation that correspond to the specific needs in the Member States155. Article 11 provides for ESF operational programmes to set out priority axes for the implementation of social innovations as established in Article 9 of the ESF Regulation. Specific to the ESF, Member State operational programmes should set out the contribution of planned ESF supported actions for social innovation if they are not covered by a dedicated priority axis in addition to the requirements set out in Article 96(3) of the CPR156.

Annex I of the ESF Regulation sets out common output and result indicators for ESF investments, all of which must be reported for all investment priorities set out in Member State operational programmes157. The common output and result 152 ‘Non-discrimination mainstreaming– instruments, case studies and way forwards’ (2007) publication produced on behalf of DG Employment, Social Affairs and Equal Opportunities by the Centre for Strategy and Evaluation Services, p 1-2153 Article 8 ESF Regulation (EU) No 1304/2013154 Article 9(1) ESF Regulation (EU) No 1304/2013155 Article 9(2) ESF Regulation (EU) No 1304/2013156 Article 11(3) ESF Regulation (EU) No 1304/2013157 Article 5(1) ESF Regulation (EU) No 1304/2013

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indicators have broad coverage including children, persons with disabilities, older persons, migrants, minorities and ‘other disadvantaged’ participants158. The existence of common immediate and longer-term result indicators for participants as well as common output indicators for entities will make for a substantial and quality amount of data strengthening the result-orientation of the new programming period159. Annex II contain specific result indicators for operations supporting the investment priority under the Youth Employment Initiative in Article 3(1)(a)(ii) of the ESF Regulation160. Example measures to be funded by the ESFGuidance produced by the Commission present examples of measures that can be funded by the ESF in the transition from institutional care to community based living. These include preventing the need for institutional care, developing services that enable people to live independently and be included in the community and, measures enabling access to mainstream education, employment, housing, health, transport and leisure activities regardless of the nature of impairment161. More specifically the guidance lists the following measures to be supported:

drawing up action plans for the transition that include individualised care support and preparation for each service user

ensure continuity and stability of service delivery during the transition stage especially development of new services at the beginning of the process when both systems are running in parallel

developing an integrated network of community based services including personal assistance, home care, family counselling, day care, job search assistance, nursing, foster care

re-training of staff who must transition from an institutional model of care to work in new integrated networks of community based services

curriculum development for posts in community based services and mainstream services

support services for families and the informal care sector for example respite services

awareness raising activities for people with support needs at risk of exclusion or institutionalised care to inform them of their right to live independently and be included in the community, their right of access to an integrated network of community based services including mainstream services, a child’s right to live with their family or in family like care and that families right to support in the community

In the case of children in alternate care, the provision of family-based or family-like care which includes family support162.

The Commission have highlighted several examples of good projects in Bulgaria, the Czech Republic and Latvia using support from the ESF. The Centre for foster 158 Annex I (1) ESF Regulation (EU) No 1304/2013159 Annex I (2), (3) and (4) ESF Regulation (EU) No 1304/2013160 Article 5(2) ESF Regulation (EU) No 1304/2013161 EC Draft Thematic Guidance Fiche for Desk Officers on the transition from institutional to community based care (de-institutionalisation DI) Version 2 (27/01/2014)162 ibid

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care and adoption project in Bulgaria is giving children in social care the best possible start in life by moving them out of social care homes and into a loving family environment. Run by the ‘For our Children’ Foundation, the project is building support services and recruiting foster parents163. In Latvia, the transition to community-based care of children and adults with psycho-intellectual disabilities will be supported and in the Czech Republic, the ESI Funds will support increasing availability and efficiency of health care services while moving the centre of psychiatric care to the community164.

In sum the 2014-2020 legislative framework governing the use of the ESI Funds requires both immediate and progressive actions on the part identified Member States165 who should use allocations from the ERDF and ESF to support the prevention of institutional care and transition to community-based support services for all. As of immediate effect it is made clear that the ESI funds must not be used to build or renovate long-stay institutions either large or small in size. The ERDF and ESF are to support measures aimed toward preventing and replacing institutional care with community based alternatives. The ex ante conditionality 9.1 is to ensure that these Member States have strategic policy frameworks with measures for the transition in place at national level before funding is released so that investments in community based services are effective, coordinated and achieve the greatest impact.

163 European Social Fund website ‘Fostering for a Fairer Future’ (19.09.2011) http://ec.europa.eu/esf/main.jsp?catId=46&langId=en&projectId=247 164 Contribution of the European Structural and Investment Funds to the 10 Commission Priorities – Justice and Fundamental Rights (December 2015) available165 Bulgaria, Czech Republic, Estonia, Greece, Hungary, Lithuania, Latvia, Poland, Romania, Slovenia, Slovakia and Croatia

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More Information:

Email: communitylivingforeurope@nuigalway.ie Phone: (+353) 91494270Web: www.communitylivingforeurope.orgTwitter: @CleSfw Facebook

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