Obstacles to the participation of small non-profit associations in projects financed by the European Social Fund

Subject: Obstacles to the participation of small non-profit associations in projects financed by the European Social Fund

I have been contacted by Portuguese associations involved in community-led local development projects, financed by the European Social Fund, who have told me about the tremendous difficulties they are experiencing, which are being made worse by the current pandemic.

They are struggling as a result of the rules for participating in these projects, which stipulate that partner entities must pay upfront for the proposed action and will then be reimbursed later, upon submitting their expenses.

These rules create problems for non-profit associations with limited resources, whose financial situation has taken a beating during the COVID-19 pandemic, as they struggle first to advance the costs, and then again when, as we see happening, reimbursement is delayed.

Is the Commission aware of this situation and the impact it has? What does it makes of the above? What can be done, in the current context, to ensure that participation in projects financed by the European Social Fund is not the preserve of entities with financial firepower and does not force small structures, such as non-profit associations, to face such difficulties, which have obliged some to sell off their own assets?

Answer given by Mr Schmit on behalf of the European Commission

(19 April 2021)

After the COVID-19 outbreak, the European Commission acted quickly to ensure that Member States have sufficient financial means to support the beneficiaries. The Coronavirus Response Investment Initiatives (CRII and CRII+) (1) of 2020 enabled greater and quicker transfer of funds through allowing for a 100% co-financing of the EU funds, including from the European Social Fund (ESF) and no recovery by the Commission of the unused annual advance payments.

It also introduced maximum flexibility in reprogramming between European structural and investment funds, including the ESF, as well as the possibility to modify the priorities of ESF programmes.

These flexibilities have been extended under the new Recovery Assistance for Cohesion and the Territories of Europe programming, which has reinforced the 2014-2020 cohesion programmes in order to address the socioeconomic impacts of the pandemic and prepare the economy for a resilient, green and digital recovery.

The Commission is aware of the delays caused by the COVID-19 pandemic in relation to ESF payments for Community-led local development projects (CLLDs). However, under the shared responsibility rules of cohesion policy, payments to beneficiaries are fully the responsibility of the Member State.

In order to support entities, particularly those with smaller structures in implementing CLLDs, managing authorities in Portugal have taken actions within the scope of the CRII+, notably to advance payments to beneficiaries, apply flexible administrative rules and allow for the eligibility of expenses supported by beneficiaries in actions which may have been cancelled due to COVID-19 restrictions.

⋅1∙ Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending Regulations (EU) No 1301/2013, (EU) No 1303/2013 and

(EU) No 508/2014 as regards specific measures to mobilise investments in the healthcare systems of Member States and in other sectors of their economies in response to the COVID-19 outbreak (Coronavirus Response Investment Initiative); Regulation (EU) 2020/558 of the European Parliament and of the Council of 23 April 2020 amending Regulations (EU) No 1301/2013 and (EU) No 1303/2013 as regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak.