The European Social Fund (ESF)

The European Social Fund (ESF) is the European Union's main tool to support jobs, help people obtain better jobs, and ensure fair job opportunities for EU citizens. The Fund invests in human capital, including workers, job seekers, youth and other individuals who face challenges in finding employment. The ESF is supported by €10 billion annually and funds a range of projects, including vocational training and lifelong learning to give the EU's workforce new and adaptable skills.

About the ESF

The ESF is working towards fulfilling the European Union's commitment to create more and better jobs in a socially inclusive society. These goals are at the centre of the Europe 2020 strategy, which focuses on promoting sustainable and inclusive economic growth in the European Union. The ESF is also helping to mitigate adverse impacts from the economic crisis that began in the late 2000s, including helping to address higher levels of unemployment and poverty in member states.

Priorities for the ESF are set by the European Commission with EU member countries. Joint decisions are also made with respect to how the Fund spends its resources. One of the ESF's priorities is boosting the adaptability of workers by providing new skills and ways of working for workers and businesses. The Fund also focuses on improving access to employment by helping youth transition into the workforce, as well as train job-seekers so they can improve their employability. The ESF also focuses on helping traditionally disadvantaged groups, including disabled persons, ethnic minorities, recent immigrants with poor language skills, ex-offenders and recovering drug abusers.

How it Works

As part of the ESF, the European Union distributes funding to member states and regions. This funding is used to finance operational programmes, which are agreed upon between each member state in partnership with the European Commission. Operational programmes fund projects that are focused on employment. Projects may be delivered by public or private organisations. Participants can include individual workers or jobseekers, as well as businesses and organisations.

The ESF promotes partnerships between various levels of government, including at the European, national, and regional or local level. Partnerships also typically include non-government organisations (NGOs), workers' organisations and other private or public partners. These partnerships may involve co-financing between public and private partners, and co-financing between the European Commission and parties in member states. There is also an element of shared management of the project involving various participating groups.

The ESF provides needs-based funding. The level of funding and types of projects differ between regions, depending on their relative wealth. The EU is divided into four funding categories based on regional Gross Domestic Product (GDP) per capita compared with the average for the EU. The aim for regions with a convergence objective ('convergence regions') is to promote economic growth and job creation. These are areas of the EU that are least developed. Convergence regions have a GDP per capita of less than 75 percent of the average of the EU's 25 member states. The aim in areas with a regional competitiveness and employment is to provide supports that anticipate and respond to change in order to strengthen competitiveness and improve employment.

The ESF also considers areas that are in the process of moving from the convergence objective to the regional competitiveness and employment objective. Phasing-out regions have a GDP that is more than 75% of the EU-25 average for 2007-13 but less than 75% of the EU-15 GDP per capita for 2007-13. Phasing-in regions have a GDP per capita that is more than 75 percent of the EU-15 average for 2007-13 but less than 75% of the EU-15 average for 2000-06. Where regions are classified will impact the amount of co-financing from the ESF. For example, the ESF may fund up to 70 percent of projects in convergence regions.

Types of Projects

The ESF funds tens of thousands of projects each year. Projects include local, regional and national initiatives. All projects focus on employment. Activities may relate to strengthening employment and mobility, including creating job opportunities for youth, boosting business, and promoting adaptable skills or openness to change. They may also focus on better education and giving opportunities to all citizens, such as those who are socially marginalised. Projects may also support social enterprise, local partnerships and inclusive approaches to employment or skills development. Activities may also relate to improving public service, including the development of more effective institutions.

Projects range in size from small neighbourhood initiatives to large-scale projects at a national level. Examples include funding for a local charity to help disabled people find jobs, vocational training initiatives to promote opportunities to job-seekers at the national level, networking and information sharing to help immigrants and promote diversity, and workshops for children to learn about the skills needed to find employment in the future. Projects may focus on schools, youth, job-seekers, entrepreneurs and those considering starting a business, and traditionally disadvantaged groups.