Social service reform

In recent years, the European Union has been active in moving forward policy initiatives to help boost growth and prosperity in Europe. This is important for the voluntary and community sector as there are significant changes in public procurement and social investment that will affect the shape and delivery of social services.

This section includes information on:

• Procurement legislation review 2010-12
• Single Market Act
• Europe 2020 Strategy
• Procurement
• State aid rules

EU procurement review 2010-12

Since 2010, the EU has been engaged in reviewing the 2004 European Procurement Directives. During 2011, the European Commission consulted widely with national governments, public authorities and other organisations on the legislation. NCVO has been working with partners in England and Europe, to learn about and inform policymakers on the issues within procurement that affect the civil society sector. Read below  for more information about NCVO's contribution to this review.

Learn more about procurement legislation in Europe, and NCVO's work on public service delivery.

Joint sector statement on procurement review

NCVO and key sector umbrella bodies have jointly released a statement on proposals of the new European Directives, which would significantly improve civil society organisation’s ability to bid for public sector contracts. 

The coalition is also seeking a meeting with Cabinet Office Minister, Francis Maude to discuss civil society priorities in the UK’s current negotiations with the EU, and ensure open dialogue is maintained between the government and the sector during the progress of the Directives review.

• Read the sector statement (PDF 1.6MB)
• Read the letter to Francis Maude (PDF 262KB)

NCVO submission to Cabinet Office on procurement review

On 20 January, NCVO responded to a Cabinet Office consultation on the new EU proposals, which were released in December 2011. This submission will help inform the UK government's position on the proposals ahead of negotiations between the Council of Europe and the European Parliament, to be held throughout 2012.

Read the full submission (PDF 132KB).

NCVO recommendations report for EU procurement review

In December 2011, NCVO compiled a recommendations report for the ongoing review on the European regulations on public procurement. The report analyses current UK and EU policies related to public services and other social policies, and the role of the voluntary and community organisations as service providers. It highlights issues in current procurement practice and makes a series of recommendations to inform legislation changes in Europe, and help change the procurement environment for the sector.

Read the full report (PDF 109KB).

Single Market Act

The Single Market Act is a policy agenda which was adopted by the European Commission in October 2010, as a series of measures to boost the European economy and create jobs, in light of the financial crisis.

The Single Market is a high priority for the European Commission to foster greater confidence in the commercial market while also meeting social policy objectives.

The strategy includes twelve levers of growth, many of which have great significance for the civil society and social economy sectors:

1. Access to finance for small and medium enterprises (SMEs)
2. Worker mobility in the Single Market
3. Intellectual property rights
4. Consumers: Single Market players
5. Services: strengthening standardisation
6. Stronger European networks
7. Digital Single Market
8. Social entrepreneurship (anchor to social investment)
9. Taxation
10. Social Cohesion
11. Regulatory business environment
12. Public procurement (Anchor to procurement section)

EU Commission President Barnier aims to launch twelve projects identifying these levers in 2012, to make life easier for everyone in the Single Market, which is composed of businesses, citizens, consumers and workers.

Visit the Europa website for more information about the Single Market Act.

Many of the levers of growth affect civil society organisations – either directly through access to funding, investment, influence and delivering services; and indirectly by shaping the general market and the effects on citizens.

Further information on some of the key levers is detailed below.

EU2020 Strategy

This strategy (PDF, 1.24MB) provides the strategic framework for the EU’s recovery programme, following the Lisbon Strategy for Jobs & Growth.

Established in March 2010, the strategy sets out to boost competitiveness and productivity while achieving social cohesion across and within the Member States.

To reach this objective, the Commission has established five headline targets:

• reduction of poverty, to lift 20 million people out of poverty by 2020;
• an employment rate of 75 % of the working age population;
• meeting the EU's climate and energy targets: reduction of greenhouse gas emissions, increased share of renewables in energy consumption and improved energy efficiency;
• reduction of school drop-out rates and more students in higher education; and
• 3% of the EU's GDP invested in research and innovation.

Procurement

The EU Treaty principles

All public bodies are obliged to adhere to the fundamental principles of the EU Treaty, regardless of whether the EU procurement rules apply to any given contract.
The EU Treaty principles include the following:

• Free movement and non-discrimination
• Fairness
• Transparency
• Proportionality

These principles underpin procurement law in the form of the European Procurement Directives which are transposed into national law by national governments. They apply to all public contracting authorities, including central and local government, and many other bodies funded by the public purse, when they invite tenders for works, services and goods.

The European Procurement Directives aim to ensure:

• the safeguarding against corruption and favouritism
• the opening up the public procurement market and to ensure the free movement of supplies, services and works within the EU
• value for money in public service delivery

Find out more about the EU legislation on procurement.

State aid rules

The term ‘State aid’ is used to describe a multitude of ways in which public resources are used to support businesses. State aid rules have been designed to prevent the use of this support in ways that distort free trade in the EU.

Although the EU Treaty does not include a definition of what constitutes State aid, the Commission has declared that it includes:

• Direct subsidies
• Tax exemptions
• Preferential interest rates
• Guarantees of loans on expressly favourable terms
• Provision of services on preferential terms
• Indemnities against losses

The rules restrict the support the public sector may provide to civil society organisations that operate in a commercial environment. They do not apply to the whole of the sector, but only where the support could inhibit fair competition with other businesses.

EESC opinion on the reform of the State aid rules

As a member of the European Economic and Social Committee Sir Stuart Etherington and NCVO were successful in ensuring that key points affecting non-profit service providers were included in the final draft of the EcoSoc opinion on the reform of State aid rules in the public procurement regulations. This included extending the criteria for “efficiency”, a call for more EU guidance, and greater clarity on the relationship between civil society and earning reasonable profit through service delivery.

• Read the full opinion.