ESF Technical Working Group Brussels, 10 October 2016 Mid-Term Review Package on the Multiannual Financial Framework (MFF): Youth Employment Initiative and proposed amendments to the Common Provisions Regulation (CPR) on the ESI Funds and the ESF Regulation ESF Technical Working Group Brussels, 10 October 2016

EXTENDING THE YEI

Mid-term review MFF Commission's communication: "Given the persistently high levels of youth unemployment in many regions and the encouraging first results shown, it is proposed to supplement the original allocation of the YEI by EUR 1 billion over 2017 – 2020, to reach a total amount of EUR 8 billion (with EUR 1 billion of matching funding to be provided from the European Social Fund)."

Key elements of the proposal YEI 2017-2020 EUR 2 bil YEI SPECIFIC ALLOCATION ESF CONTRIBUTION GLOBAL MARGINS (EUR 1bil) REALLOCATION OF ESF (EUR 1bil)

Key elements of the Proposal (II) Minimal modifications to the legal framework required: updating of allocations -eligibility of regions and breakdown of resources determined on the basis of the latest available annual data (Article 16 CPR and Annex VIII CPR) -no changes to the delivery system of the YEI: current rules will continue to apply

Next steps -Political agreement on the MFF: end of 2016 -Amendment of budget for 2017 – use of global margins for 2017-2020: spring 2017 -Amendment of the CPR (amounts): spring 2017 - Amendment of the Commission Implementing Decision - breakdown of allocations by Member State -Amendment of PA and OPs: autumn 2017

Amendments to the Common Provisions Regulation (CPR) on the ESI Funds and the ESF Regulation

Revision of Financial Regulation incl. "Omnibus" Regulation Adopted on 14.09.2016 as part of the package on the Mid-Term Review of the MFF – COM(2016)605 – See Art. 265 and 266 Focus of proposed amendments for the ESI Funds: Reducing administrative burden for beneficiaries: Simplified cost options (SCOs) Joint Action Plans (JAPs) Improving synergies with other EU instruments Streamlining financial instruments Increasing flexibility for investments in Member States Proposals take account of first recommendations by HLG monitoring simplification for beneficiaries of ESI Funds

I. Reducing the administrative burden Type of SCOs & mandatory use Lump sums: removal of the upper limit (Art. 67(1)(c) CPR) New possibility: financing based on fulfilment of conditions related to progress in implementation to be defined in delegated acts - linked to Art. 121 FR (Art. 67(1)(e) CPR) Compulsory use of SCOs for ERDF and ESF grants/repayable assistance where public support does not exceed EUR 100.000 for operations not implemented exclusively through public procurement (moved from ESF Regulation) - (Art. 67(2a) CPR) Accompanying provision providing managing authorities with a 6 months transitional period (Art. 152(4) CPR)

I. Reducing the administrative burden – Establishing the amount of a SCO Additional methodology for determining a SCO: use of draft budgets on a case by case basis and agreed ex ante by the managing authority in case the public support does not exceed EUR 100.000 (Art. 67(5)(a) CPR) Off the shelf SCOs: possibility for COM to adopt delegated acts for definition of standard scales of unit costs and flat rates and related methods (Art. 67(5)(a) CPR)

I. Reducing the administrative burden – Calculating staff costs Additional options for calculating staff costs: Direct staff costs = 20% of the direct costs other than staff costs (from ETC Regulation) (Art. 68a(1) CPR) Rules for calculating the hourly rate for staff costs (latest documented annual gross employment cost/1720 hours) have been clarified (Art. 68a(2) and (3) CPR): in case of part-time work: pro rata in case annual gross employment costs are not available: use available data or employment contract adjusted for a 12 month period Specific provision on staff costs for staff working on part-time assignment on an operation with fixed hours per month + no need for separate working time registration (Art. 68a(4) CPR)

I. Reducing the administrative burden – Calculating remaining eligible costs Remaining eligible costs (other than direct staff costs) = 40% of eligible direct staff costs (Art. 68b CPR) (moved from the ESF regulation) New provision clarifies that for ESF operations the allowances and salaries paid to participants are not included in the 'remaining eligible costs', but are additional eligible costs.

I. Reducing the administrative burden – Management verifications Clarification on management verifications when SCOs are used: managing authority has to verify that conditions for reimbursement of expenditure are met (no need to verify expenditure) (Art. 125(4)(a) CPR) Provision to apply retroactively

I. Reducing the administrative burden – Encourage use of Joint Action Plans (JAP) Lower requirements for minimum public expenditure allocated to a JAP (EUR 5 Mio. instead of EUR 10 Mio.) and for the share of public support of OP (5 % instead of 20%) (Art. 104(2) CPR) No minimum requirements for first JAP submitted under the Investment for Growth and Jobs and ETC goals (Art. 104(3) CPR) Deletion of limitations for reimbursements (Art. 105(2) CPR) Various changes to reduce content requirements for the JAP (Art. 106 CPR) Adaptation of coverage of COM decision approving the JAP (Art. 107 CPR) No need for JAP steering committee to be distinct from programme monitoring committee (Art. 108 CPR)

II. Improving synergies with other EU instruments Changes on eligibility of expenditure to improve synergies with other EU Funds: provision allowing expenditure to be reimbursed from different ESI Funds and Union instruments on a pro rata basis in accordance with the document setting out the conditions of support (Art. 65(11) CPR) EFSI-ESI Funds complementarity

III. Increasing flexibility for investments in Member States Migration and asylum highlighted as horizontal priority for all ESI Funds (Art. 9 CPR) Possibility to transfer resources allocated under shared implementation to other EU instruments under direct or indirect management or to enhance the risk bearing capacity of the EFSI: MS have to submit request by 30 September, financial appropriations of future years only, programme amendment required (Art. 30a CPR; linked to Art. 125 FR) Streamlining of procedures for the amendment of the Partnership Agreement through an annual alignment exercise, (Art. 16 (4a) CPR)

IV. Other changes in the CPR contributing to simplification Increased legal certainty for electronic documents: no originals are required if the national rules for certification of conformity are complied with (Art. 140(3) CPR) Clarifications on obligations on information and communication: apply to beneficiaries as from when they obtain the document setting out the conditions for support to the operation (Art. 115 and Annex XII CPR) Extension of the exemption to deduct net revenue for operations generating net revenue only during implementation (now for operations with total eligible cost below EUR 100.000 instead of EUR 50.000) (Art. 65 (8) CPR)

IV. Other changes in the CPR Inclusion of natural persons as beneficiaries of cohesion policy support (Art. 2 CPR) Clarification of rules for community-led local development and ITIs, and in particular on the status of intermediate body (Art. 34 and 36 CPR) Additional possibilities for the implementation of operations covering different programme areas (Art. 70 CPR and Art. 13 ESF) Increasing flexibility for the use of the ESI Funds for technical assistance and clarifications on the calculations of ceilings (Art. 59 and 119 CPR)

V. Amendments to the ESF Regulation Clarification on operations implemented outside the programme area (Art. 13 ESF - similar to Art. 70(2a) CPR) Deletion of provisions on SCOs which have been moved to the CPR, i.e. Compulsory use of SCOs for small operations 40% flat rate on direct staff costs to cover remaining costs of the operation. The CPR clarifies that remaining costs do not include salaries and allowances paid to participants. Reporting on the common indicators on the household situation: only twice (in 2019 and 2025) on the basis of a representative sample. Provision to apply retroactively

Thank you!