Belgian presidency of the European Union

The 3rd Forum
26 & 27 October 2010, Brussels
on Social Services of General Interest

The 3rd Forum on social services of general interest (SSGI) took place on 26 and 27 October 2010 in Brussels. Organized by the Belgian Presidency of the Council of the European Union, the Forum brought together more than 300 participants representing various European institutions, the Member States and all stakeholders. Particular note should be taken of the presence, alongside that of Mrs. Laurette ONKELINX, Deputy Prime Minister and Belgian Minister of Social Affairs, of three members of the European Commission, Mr. László ANDOR, Commissioner for employment, social affairs and inclusion, Mr. Joaquín ALMUNIA, Commissioner for competition, and Mr. Michel BARNIER (represented), Commissioner for the internal market and services, as well as several European MPs including Mrs. Pervenche BERES, President of the Employment and Social Affairs Committee at the European Parliament, Mrs. Françoise CASTEX, President of the Public Services Intergroup, Mr. Marc TARABELLA, co-president of the Social Economy Intergroup and Mr. Proinsias DE ROSSA, rapporteur on the future of SSGI in Europe. The presence and the active participation of the following Member of the European Parliament have to be mentioned: Mr. Pascal CANFIN, Mr. Damien ABAD, Mrs. Marie-Christine VERGIAT, Mr. Peter SIMON, Mr. Frank ENGEL, Mrs. Heide RÜHLE.

Social services are not "typical" market. Some of them are Serviecs of general economic interest (SGEI), while others are Services of general non-economic interest (SGNEI). SGEI fall within the scope of the rules of the Treaty on the freedom of establishment and freedom to provide servics. The boundary between SGEI ans SGNEI is not always clear. In any case these services are all SGI: services of general interest whose social mission must not be compromised.

Where social services are concerned, fundamental rights are at stake: i.e. the right of access to placement services, the right of access to social security benefits and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest.

At the beginning of the 3rd forum, the question is: how can these social services be dealt with adequately under the rules of the internal market, so that the social mission can be fully ensured? Ultimately, technical issues relating to entrustment, prior authorization or approval show the determination of the States, the social actors and the Union to enact a social policy.

Social services are increasingly faced with the logic of public procurement. A strong trend can be detected: public procurement is chosen increasingly as a tool for managing some social needs.

Fundamental rights are at stake in social services: e.g. the right of access to placement services, the right of access to social security benefits and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest.

Within the context of the 3rd Forum, the following question arises (again): how can Social Services be dealt with from the standpoint of public procurement.

Does European State Aid legislation have a major effect on the way non-profit organisations and social services organise and fund their activities? Yes, if SSGI are SGEI and no, if they are SGNEI. It all depends on xhether social services can be considered economic or non-economic activities. The boundary is sometimes blurry, but one thing is sure: they are all SGI: services of general interest. This general interest mission must be ensured in normal times, but also in times of crisis.

Fundamental rights are at stake as far as sociam services are concerned: e.g. the right of access to placement services, the right of access to social security benefits and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest.

European State Aid rules apply to SGEI and more particularly to their funding methods and schemes. These rules were laid down with a view to the provision of public services while ensuring that the conditions of fair competition still apply. At the dawn of the 3rd forum, the question has become: how to deal with these social services from the standpoint of these rules, so that their social mission can be fulfilled? Ultimately, all technical questions relating to thresholds, payments, public service compensation, jurisprudence or common rules, such as the ones at issue in the ‘Altmark’ dispute, show the will of the States, the social actors and the Union to enact a social policy.

Some recent evolutions put extra pressure on Social Services of General Interest: not only did the current economic crises created financial constraints, but demographic and societal changes - due to an evolution of family structures - significantly altered the environment in which they operate. At the same time, we saw an evolution (e.g. part-time jobs, low salary jobs, migrant workers), and in the labour market (e.g. fast staff turnover, temporary shortages of workforce, increasing gap between high skilled and under-qualified workers).

These new challenges imply that SSIG need to adapt this changed reality, but only while maintaining quality. This dimension is sometimes omitted. There was for example a net creation of jobs in SSGI, but without any guarantee as far as quality of these jobs goes. For the service users as well, quality became more important: they rightly became more demanding, and require personalisation of the services.

The European Employment Strategy and Active Inclusion strategies both build on the recognition of the need of high quality jobs. A.I. strategy in particular has integrated approach based on 3 pillars: adequate income support, active labour market strategies and access to quality social services (biennial report, 2008, p.46).

New management tools were introduced in the design, evaluation and monitoring of the service delivery. But it also left public authorities confronted with the challenge of maintaining a high quality of SSGI. Different initiatives were thus launched by the Commission after the publication of the EC Communication on services of general interest (COM (2007) 725 final nov. 2007), in order to develop a EU Strategy for the promotion of SSGI quality. These included:

- the launch of projects on the definition of quality standards in SSGI provision (VP/2008/004).
- a SPC i,itiative on the development of a EU voluntary quality framework providing guidelines on methods to set, evaluate and monitor SSGI (work program 2009 SPC); and
- training for local authorities

In the present document, we will give an overview of the situation as far as quality of SSGI goes, present recent initiatives by the involved stakeholders, and define the European Voluntary Quality Framework on SSGI.

Social services of general interest, which by definition are local services, are unlike other services. They are associated with the values of equality, inclusion and solidarity, and are at the heart of the European social model, contributing to the social and territorial cohesion of the EU.

The current debate on SSGI raises the central question of the relation between economics and the social sector. In fact, the main problem that concerns many stakeholders is the legal situation of SSGI in view of the internal market and competition rules.

The discussion is actually a very concrete one, beyond the touchy technical and legal aspects, given its consequences for European citizens. SSGI are indeed crucial today to cope with major challenges to growth and employment in a sluggish economic context. This context puts a special touch on the discussion because of the particularly important role that SSGI have played as stabilizers that softened the effects of the recent economic crisis whose repercussions are still felt today.

Social services of general interest are at the crossroads of economic and social reality, and at the intersection of national and European competences. No doubt this contributes to their complexity and the current difficulty for the European Union to formulate concrete responses expressing the actual recognition of the missions and specificities of SSGI.

The complexity of the SSGI issue is so great that it is not always easy to know what is meant when the expression is used.

The objective of this brochure is to rapidly take stock of the SSGI question on the European scene, without any claim of dealing exhaustively with the issue.

Social protection is at the heart of European society. It is the main difference between Europe and other industrialized regions in North America or Asia, and ensures that economic growth coincides with social progress. Since the beginning of the European Union the question arises how the EU can enforce Member States’ social security systems. In its founding Treaty of Rome, the EU states aimed at the promotion of full employment and social progress, the fight against social exclusion and discrimination and the promotion of social justice and social protection.

The horizontal social clause of the new Lisbon treaty calls for an intensified focus on the social dimension of EU policies. Taking into account social effects of all EU policies demands a structural dialogue across and within all EU institutions. It requires all strands of the Council and the Commission to benefit from the expertise inside the social strand. In turn, the debate in the social strand would benefit from pollination with outside discussions. This requires a commitment from the European Commission, the European Parliament and the Council of the European Union, to engage in dialogue across and within their institutions.

A key instrument to achieve this is a strong commitment to impact assessment. Assessing social impacts will lead to better informed decision making on the political level, to a stronger social dimension of EU policy, and eventually to a more cohesive European Union. To come to a balanced decision it is essential to assess the EU’s social goals simultaneously with its other objectives. The Belgian EU Presidency highlights the potential of the Commission’s Impact Assessment for a rapid and high quality implementation of the Horizontal Social Clause. At the same time, we are continuing the discussion on how the evaluation of social impacts inside the Commission’s Impact Assessment can be improved in the future, to truly deliver up to the expectations of a strong and social European Union.