Guidance

Annual Implementation Report 2019

Updated 8 October 2024

Applies to England

CCI	CCI
Title	ESF England
Version	2019.0
Date of approval of the report by the monitoring committee	14-Aug-2020

1. Overview of the implementation of the Operational Programme (Article 50(2) and 111(3)(A) of regulation (EU) NO 1303/2013)

Key information on the implementation of the operational programme for the year concerned, including on financial instruments, with relation to the financial and indicator data.

Throughout this report, unless otherwise stated, all commitment by the Managing Authority (MA) and spend is quoted in Sterling (£) and all commitment and spend against the Performance Framework (PF) is reported in Euros (€). The PF and Payment Application (PA) figures include National Match Funding and therefore represent the total expenditure. Where included within a PA, all € values in this part of the report are as transmitted to the European Commission using the EUR Exchange Rate appropriate to that certified batch of expenditure. All other figures, where not yet included within any Interim PA (IPA), have the January 2020 EUR exchange rate applied and are therefore converted using EUR exchange rate of 0.85208.

The Department for Work and Pensions (DWP) and the European Commission (EC) formally agreed and adopted the European Social Fund (ESF) Operational Programme (OP) in September 2015. The OP was reviewed in 2018 to better reflect current policy challenges and evidence; reviewing the assumptions made in the OP around finances and associated indicators; addressing long-standing issues and revisiting assumptions in the light of more experience delivering the programme and a significantly different economy. The new OP was adopted in October 2018.

In January 2019 the MA received notification that the EC had interrupted payments based on findings from the 2017 Early Preventative Systems Audit. The MA worked to address the EC’s concerns and were able to demonstrate that our systems were indeed compliant with EU Regulations. As a result, the payment interruption was lifted on 24 July 2019. The following interrupted IPAs were reimbursed:

• IPA9a submitted 23 November 2018 for €506,694,462.17 total eligible expenditure. Payment received 15 August 2019

• IPA9b submitted on 20 December 2018 for €509,667,043.10 total eligible expenditure. Payment received 15 August 2019

• IPA10 submitted on 19 March 2019 for €56,461,184.46 total eligible expenditure. Payment received 21 August 2019

These interrupted payment applications total €1,072,822,689.73

Further submissions were made in 2019:

• FPA11 submitted on 29 July 2019 for €21,463,621.45 total eligible expenditure. Payment received 21 August 2019

• IPA12 submitted on 4 October 2019 for €313,409,786.08 total eligible expenditure. Payment received 1 November 2019

• IPA13a submitted on 18 November 2019 for €123,783,916.38 total eligible expenditure. Payment received 29 November 2019

• PA13b submitted on 13 December 2019 for €127,254,365.79 total eligible expenditure. Payment received 30 December 2019

The total payment applications for 2019 was €1,658,734,379.43

At the end of 2019, committed spend for the 2014 to 2020 programme was £2,137,746,672.

In 2019, progress against the PF is measured against the 2023 final Programme targets, instead of the 2018 milestone in previous years. The data below illustrates the achievements by each Category of Region (CoR), for both the Participant and Financial indicators, against the 2023 final of Programme target:

1.1 Participant Performance (O1 and O2):

Priority Axis 1:

• Less Developed: 11,099 (35%) Actual Outputs against 2023 target of 31,790

• Transition: 177,210 (68%) Actual Outputs against 2023 target of 259,660

• More Developed: 525,570 (48%) Actual Outputs against 2023 target of 1,104,560

• YEI: 77,041 (70%) Actual Outputs against 2023 target of 110,490

Priority Axis 2:

• Less Developed: 8,366 (61%) Actual Outputs against 2023 target of 13,740

• Transition: 72,037 (36%) Actual Outputs against 2023 target of 198,100

• More Developed: 160,778 (27%) Actual Outputs against 2023 target of 587,200

1.2 Financial Performance

Priority Axis 1

• Less Developed: Actuals declared to the European Commission (EC) by 31/12/2019 of €21.5m (18%) against a 2023 target of €116.3m

• Transitional: Actuals declared to the EC by 31/12/2019 of €292m (48%) against a 2023 target of €611.4m

• More Developed: Actuals declared to the EC by 31/12/2019 of €942.3m (36.2%) against a 2023 target of €2.6bn

• YEI: Actuals declared to the EC by 31/12/2019 of €180.9m (39%) against a 2023 target of €461.8m

Priority Axis 2:

• Less Developed: Actuals declared to the EC by 31/12/2019 of €14.1m (23%) against a 2023 target of €61.3m

• Transitional: Actuals declared to the EC by 31/12/2019 of €112m (23%) against a 2023 target of €477m

• More Developed: Actuals declared to the EC by 31/12/2019 of €262m (17%) against a 2023 target of €1.54bn The MA has continued to work closely with Cornwall and the Isles of Scilly (CIoS), ESF England’s only Less Developed Region (LDR), during 2019.

After a slow start to the Programme the situation has improved and Calls to the value of £74.8m have now been launched, an in year increase of £25.4m from 2018. This, plus the Co-Financing Organisation (CFO) contracts in the Region, has resulted in projects to the value of £70.2m being approved and a further £23.9m in the pipeline. If all the applications in the pipeline come to fruition, this would lead to 66% of the notional allocation being committed in the LDR. Further Calls are planned to utilise the entire LDR notional allocation.

The challenge of low levels of unemployment in the LDR remains and still causes some issues with Priority Axis (PA) 1. The MA has taken steps to address this, including the continuation of PA1 focus groups and by increasing engagement with the CFOs and Grant Recipients (GRs).

Earlier in the Programme CIoS focussed more on PA2 Calls, however in 2019, the focus has been on PA1 as some CFO delivery entered its final stages. Robust contract and stakeholder management of projects, along with a greater understanding of the claims process from the GRs’ perspective, has ensured that claims have been submitted in a timelier manner.

As a result of this increased focus, in 2019 the LDR exceeded its PA2 targets by a substantial margin and also crossed the 85% threshold for PA1 Participants, enabling the latter target to be considered “achieved”. The 6% Performance Reserve (PR) value was added to original allocations in all CoRs. The implication of CIoS not meeting its target in 2018, meant that the value of the PR will need to be moved, along with associated targets, from PA1 to PA2 in the LDR so that the funding is not lost, is done via an OP review. The MA has worked closely with colleagues in CIoS to determine the detail of this transfer and a request to amend the OP was submitted on 16 March 2020.

A large proportion of ESF England’s provision is delivered through four national CFOs. As these organisations deliver such a significant portion of the ESF England Programme, the MA has ensured that these partners are closely performance managed. In 2019 three of the CFOs worked with the MA to consider extending Projects based on published performance criteria, focusing primarily on Strategic Fit and Value for Money. Those projects that met the criteria were offered extensions and those that did not, are closing down. The exercise will continue during 2020.

2. Implementation of the Priority Axis (Article 50(2) of Regulation (EU) No 1303/2013)

2.1 Overview of the implementation

ID: 1 Priority axis: Inclusive Labour Markets

Key information on the implementation of the priority axis with reference to key developments, significant problems and steps taken to address these problems.

Whilst performing strongly against N+3 and Performance Framework (PF) targets, (the Programme achieved all but one PF indicator), the MA has robustly continued to address commitment issues due to the Programme’s previously reported slow start. In order to boost commitment levels and drive performance, the MA has continued to work closely with the Local Enterprise Partnership (LEP) areas in England. These stakeholders advise on local strategic need and how ESF funds can fill gaps in existing provision; ensuring the Programme reaches the most disadvantaged in society, and does not duplicate other provision.

Examples of steps taken to drive performance and increase commitment levels include:

• raising the Minimum Call Value from £50,000 to £150,000

• increasing the Minimum Application Level to 25% of Call value or £150,000, (whichever is the greater)

• encouraging greater joint working and collaboration between LEP areas

• launching fewer, larger Priority Axis (PA) calls, encouraging consortia bids where appropriate

• streamlining moderation and appraisal of Calls, to reduce delays from inception to signed Funding Agreements (FAs)

• implementing online applications and appraisals, (which fulfilled a key requirement of the EPSA audit); developing Call Plans to commit all remaining funding

• continual support to identify Match Funding, (which has been previously cited as a reason for Call market failures)

As a result, commitment of all Funds by the end of 2019 was: £2,137,746,672.09

PA1: £1,513,564,782.52

Commitment Breakdown as at 31/12/2019:

• Direct bid: £538,501,126.39

• ESFA: £464,358,295.61

• HMPPS: £196,000,000.20

• DWP: £141,343,445.03

• NLCF: £173,361,915.30

ID:2 Priority Axis: Skills for Growth

Key information on the implementation of the priority axis with reference to key developments, significant problems and steps taken to address these problems.

Many of the actions taken and focus stated above were also appropriate for PA2.

PA2: £595,568,884.22

Commitment Breakdown as at 31/12/2019:

• Direct Bid: £107,398,785.38

• ESFA: £488,170,098.84

ID:3 Priority Axis: Technical Assistance (TA)

Key information on the implementation of the priority axis with reference to key developments, significant problems and steps taken to address these problems.

There have not been any specific issues in delivering PA3, however there has been a level of under commitment in this PA which has been addressed by launching a further Call.

PA3: £28,613,005.35

Commitment Breakdown as at 31/12/2019:

• Direct Bid: £28,613,005.35

The MA agreed to implement the TA Simplified Cost Option (SCO) in November 2019 and work with GRs to amend their Projects accordingly will be undertaken in 2020.

2.2 Common and programme specific indicators (Article 50(2) of Regulation (EU) No 1303/2013)

Priority axes other than technical assistance

Priority axis 1

Inclusive Labour Markets

Investment Priority 8i Access to employment for job seekers and inactive people, including the long term unemployed and people far from the labour market, also through local employment initiatives and support for labour mobility.

Tables 2a, 2c 4a and 4b can be found within data tables 8i

Priority axis:1

Inclusive Labour Markets

Investment Priority

8ii Sustainable integration into the labour market of young people (ESF), in particular those not in employment, education or training (NEET), including young people at risk of social exclusion and young people from marginalised communities, including through the implementation of the Youth Guarantee.

Tables 2A, 2C, 4A and 4B can be found within data tables 8ii

Priority Axis: 1

Inclusive Labour Markets

Investment Priority 1

9i Active inclusion, including with a view to promoting equal opportunities and active participation, and improving employability.

Tables 2A, 2C, 4A and 4B can be found within data tables 9i

Priority axis: 1

Inclusive Labour Markets

Investment Priority:1

9vi Community led local development strategies.

Tables 2A, 2C, 4A and 4B can be found within data tables 9vi

Priority axis: 2

Skills for Growth

Investment Priority 1

10iii Enhancing equal access to lifelong learning for all age groups in formal, non formal and informal settings, upgrading the knowledge, skills and competences of the workforce, and promoting flexible learning pathways including through career guidance and validation of acquired competences.

Tables 2A, 2C, 4A and 4B can be found within data tables 10iii

Priority axis

2 Skills for Growth

Investment Priority

10iv Improving the labour market relevance of education and training systems, facilitating the transition from education to work, and strengthening vocational education and training systems and their quality, including through mechanisms for skills anticipation, adaptation of curricula and the establishment and development of work based learning systems, including dual learning systems and apprenticeship schemes

Tables 2A, 2C, 4A and 4B can be found within data tables 10iv

2.3 Priority Axes for technical assistance

Priority Axis: 3

Technical Assistance

Tables 2C, 4A and 4B can be found within data tables PA3

Priority Axis: 3	Technical Assistance
Specific objective	3.1 To ensure that the activities which fall within the scope of the programme are managed, monitored and evaluated in line with the Common Provisions Regulation, European Social Fund Regulation and the Commission’s delegated and implementing regulations.

Table 5

Information on the milestones and targets defined in the performance framework.

2.4 Financial data (Article 50(2) of Regulation (EU) No 1303/2013)

Table 6

Financial information at Priority Axis and programme level.

Table 7

Breakdown of the cumulative financial data by category of intervention for the ERDF, the ESF and the Cohesion Fund (Article 112(1) and (2) of Regulation (EU) No 1303/2013 and Article 5 of Regulation (EU) No 1304/2013)

Table 8

The use made of cross financing.

The above tables can be found within data tables 5 to 8

Table 10

Expenditure incurred outside the Union (ESF).

Table 11

Allocation of YEI resources to young people outside the eligible.

These tables can be found with data tables 10 and 11

3. Synthesis of the evaluations

Synthesis of the findings of all evaluations of the programme that have become available during the previous financial year, with reference of name and reference period of the evaluation reports used.

Evaluation evidence gathered in 2019 builds on previous findings which show that the ESF Programme is being effective in meeting its core aims of promoting sustainable employment and labour market mobility, improving social inclusion and enabling access to education and training. The new evidence, which is based on analysis of management information and survey data, in addition to counterfactual impact analysis of the Youth Employment Initiative (YEI), provides a strong indicator of the positive impact ESF is having on participants.

3.1 Leavers Survey results

The 2018 AIR Report presented a range of indicators of effectiveness from the six month leavers survey, including participants’ longer term employment and education outcomes and their experiences of and satisfaction with ESF support. The latest data from the survey, which covers leavers up to mid 2019, provides a 50% increase in the sample size since AIR 2018, and confirms the findings from the previous year.

2019 findings show that ESF and YEI are effectively engaging participants facing an array of disadvantages in the labour market. Before joining ESF or YEI, the majority of respondents were either: unemployed (58%); inactive, excluding those in education or training (8%), or currently in education or training (4%). Of those unemployed, 53% had been out of work for 6 months or more. Just over 51% of respondents were in receipt of social security benefits and 65% were recorded as having a disadvantage. Self reported disadvantage in the survey, including those with drugs, alcohol dependency and ex-offenders, was even higher at 77%. 37% recorded a disability or long term health condition.

A key indicator of effectiveness (CR06) shows that around 39% of respondents who were unemployed or inactive before they joined an ESF or YEI course or programme, moved into employment since joining and were in employment, including self employment, six months after leaving. Results exceed the targets across all Categories of Region:

Less Developed: Result 36% vs Target 34%

Transitional: Result 43% vs Target 34%;

More Developed: Result 38%vs Target 34%.

However, there were small but significant variations in findings by: Gender (41% male, 37% female), and Ethnicity (White 40%, Black, Asian and Minority Ethnic 37%). Those recorded as having a disadvantage were significantly less likely to have moved into employment than those without (36% vs 50% respectively) and similarly for those with a disability or long term health condition, 30% were less likely to have moved into employment compared to those without a disability (47%). This result also varied significantly across the age ranges surveyed, with employment rates lower for 15 to 17 year olds (25%) and those aged 55 plus (32%) compared with 18 to 24 (46%), 25 to 29 (43%) and 30 to 54 (38%).

Looking at types of employment six months after leaving, 86% were working for an employer while 9% were self employed and 5% on an apprenticeship.

Considering the quality of employment, 65% of those in employment after six months were on permanent or open ended contracts, with a further 8% on a fixed term contract lasting 12 months or longer, suggesting a reasonable standard and stability of job. However, 24% were either on zero hours’ contracts, employed on a temporary or casual basis, or on a fixed term contract lasting less than 12 months.

There is some evidence that ESF or YEI is helping people to progress in employment (CR07) with 31% of those in employment on entry showing improved labour market status six months after leaving, however this is slightly below the programme target of 35%. There is little variation by gender (male 31%, female 32%). Age was also a key factor, with 28% of 30 to 54 year olds and 17% of 55 plus significantly less likely to progress than younger age groups. There was little variation by disability status or ethnicity.

Examples of employment progression included: Moving from precarious to permanent employment (28%), and a small minority (4%) moved from being under employed (working part time but wanting to work full time) to being fully employed. 28% had changed job, whilst 24% had or changed employer.

39% were in roles with more responsibility or requiring higher level skills or competencies (36%), and 23% were in roles requiring a higher level of qualification. Looking at the wider benefits to the participants, 65% felt they had more training opportunities available to them, 60% were more satisfied with their job and 57% felt that their future pay and promotion prospects would improve. 52% felt they had better job security and 45% said they had received a pay increase. 17% had gained a promotion.

Turning to education and training, 10% of leavers were in education or training six months after leaving, compared with 4% on joining. Most commonly, those leavers were either in college full time (42%), part time (19%) or attending university (14%). Other activities included being on a course while working (6%) or being on a traineeship (5%).

Overall satisfaction with the course or programme was very high (82%) and a similar proportion (81%) felt that the ESF had helped them to some extent to get a job, or made it more likely they would get a job in the future. However, a minority (17%) felt it hadn’t helped at all.

In terms of how the programme helped, 86% felt it was relevant to their needs and that the level of difficulty and time spent on the course (both scoring 78%) were about right. 72% of participants felt that being provided with advice or guidance about types of work they could do was the most common form of support, followed by more general advice about work (69%) and training or advice in how to look for work (64%).

Looking at other skills, when asked about how the course or programme had helped them, respondents rated self confidence most highly (73%), followed closely by the ability to do things independently (72%), and communication skills (71%). Importantly, further analysis of these results shows that even where participants have not moved into employment or education, they have still benefited in acquiring these skills.

Other forms of support provided were childcare, 73% who received it stated that they would have faced difficulties otherwise. 31% stated that they received ESF help with managing a health condition or disability.

3.2 Youth Employment Initiative impact evaluation

Qualitative research findings and survey results submitted in the 2018 Annual Implementation Report provided evidence of the Youth Employment Initiative (YEI)’s effectiveness at supporting young NEETs (Not in Education, Employment or Training) to enter or re-enter employment, education or training. In line with the Commission’s recommended good practice, in 2019 we have conducted our first Counterfactual Impact Evaluation (CIE) of the Youth Employment Initiative by comparing the employment outcomes of YEI participants with a statistically matched group of non YEI participants. This enables us to assess the extent to which the positive outcomes observed can be attributed to the YEI over and above other factors, such as the generally improving youth employment rates in the UK over the programme period.

The treatment group of YEI participants was drawn from management information and matched to administrative data registers. To create a similar comparator group from administrative registers, key matching variables were used, such as: age; gender; region; indicators of deprivation, and days in employment or on social security benefits prior to joining YEI. For non YEI participants, a pseudo start date was also allocated; this was done by using a distribution of actual start dates of participants and then randomly allocating them to non participants in the comparator group.

An important caveat to the analysis was that administrative registers relating to education and training were not available, meaning we could only measure employment outcomes. Employment outcomes were measured at 6 months and 12 months after participants left YEI (for the comparator group, this was calculated as 6 and 12 months after their pseudo start date).

The results showed that YEI participants were found to be in employment for an additional 31.5 days in the six months following support when compared with non participants, and an additional 24.7 days in the 12 months following support. So overall, YEI participants spent on average 56.2 additional days or 8 weeks in employment over 12 months compared with their non YEI counterparts.

These positive estimates of employment impacts generated by the CIE were mirrored by the evidence derived from management information and leavers survey data. While the former showed that just under a third of participants are recorded as entering employment immediately on leaving the programme, the survey indicated that nearly half were in employment six months after leaving, showing that it can take time for the benefits of YEI participation to be realised. In addition, given that the majority of YEI participants experience other labour market disadvantages, taken together, this evidence reinforces the positive impact YEI is having on society.

As more data becomes available we will be able to track the sustainability of employment outcomes beyond 12 months. The methodology used for the YEI analysis will also be used to do counterfactual analysis of the wider ESF Programme benefits.

3.3 Planned evaluation in 2020

Evaluation activity in 2020 will include:

• publication of the final YEI impact evaluation report in Autumn 2020

• publication of a report of the leavers survey (covering 6 month leavers up to mid 2019) in Autumn 2020

• publication of a report of qualitative research carried out with a sample of project case studies in Autumn 2020 (fieldwork conducted between October 2019 and February 2020)

• commissioning of a new leavers survey to track leavers from 2020, complemented where possible by data from administrative registers, and

• ongoing counterfactual impact evaluation

Publication dates and activity are subject to change given the impact of COVID-19.

3.4 Information on the implementation of the Youth Employment Initiative.

The Youth Employment Initiative (YEI) is one of the main EU financial resources to support the implementation of Youth Guarantee schemes. It was launched to provide support to young people living in regions where youth unemployment was higher than 25% in 2012. The UK Government did not implement the Youth Guarantee due to the measures it had put in place at the time through Jobcentre Plus and the Youth Contract.

The YEI exclusively supports young people who are not in education, employment or training (NEETs), including the long term unemployed or those not registered as job-seekers. It ensures that in parts of Europe where the challenges are most acute, young people can receive targeted support. In England, the YEI is delivered locally with the advice of local committees in Local Enterprise Partnerships (LEPS) areas who work with the ESF Managing Authority (MA) to develop calls to invite applications for funding to tackle youth unemployment in their area alongside existing Government provision. The YEI builds on and enhances existing provision, or develops new innovative programmes to support young NEETs to access the labour market or education or vocation training opportunities.

In England, there have been a number of challenges with regards to the YEI implementation, such as the availability of Match Funding, which must be integral to the project and be drawn from the same eligible area, as well as the improvement in the economic climate and falling youth unemployment rate, which have reduced the number of eligible participants.

The MA and its partners recognise that YEI is strictly targeted at young people between the ages of 15 to 29 and NEET, and can only operate in eligible areas as set out above. In England, 90% of YEI funding is allocated to five NUTS (Nomenclature of Territorial Units for Statistics) 2 Regions (Inner London, Merseyside, Tees Valley and Durham, and West Midlands) which had 25% youth unemployment at initiative conception. In line with the ESF Regulation, the remaining 10% of the YEI allocation is targeted at NUTS 3 Regions (Kingston-upon-Hull, Leicester, Nottingham and Thurrock) with youth unemployment rates above 30% in 2012.

The YEI focusses on providing support and help for marginalised participants to move into traineeships, apprenticeships and work, or to re-engage in education and training, moving them closer to the labour market. Participants might, for example, be members of gangs, care leavers, young lone parents, ex-offenders or young people with learning difficulties. They are likely to require more intensive and tailored interventions.

3.5 Issues identified and measures taken to address them

YEI in England was expected to underspend in the More Developed (MD) Category of Region (CoR) by the end of the Programme, owing to a shortfall in take up. The reasons for this include: the restrictive eligibility criteria; the reducing numbers of NEETs due to youth unemployment falling; a lack of eligible Match Funding, and the (since revised) assumption that the YEI would finish in 2018. In addition, Co-Financing Organisations such as the Education and Skills Funding Agency and DWP declined to participate in the initiative due to the added complexities involved.

As stated, youth unemployment is reducing (the full impact of COVID-19 is still to be confirmed at this time). The overall 16 to 24 youth unemployment rate for England is 3.6% (Nomis March 2019), having reduced from 16.2% in 2015. For 16 to 24 males it is down to 12.6% from 24.2%; for females it reduced from 18.5% to 11.0%. There is concern about the transition from school to the labour market; most young people continue in education or training when they leave school, and make a successful transition to either further, or higher, education or employment, but there is still a group who either ‘drop out’, or struggle to make the transition to the labour market at age 18 to 19.

As a result, the proportion of young people NEET in England varies slightly between the ages of 16 and 18 where 4.8% were NEET at age 16, 3.6% at age 17 and 12.5% at age 18.

In order to address this and to attempt to utilise the full value of the YEI in the MD CoR, the MA launched a call in July 2019 which closed on 26 September 2019.

A total of 10 applications were received with a potential value of £60m (should they all be successful and progress through to Funding Agreement). These applications are currently going through the appraisal process. This leaves a total of £57m uncommitted, which includes £33m that was not realised from the published call, and a further £24m from other eligible YEI Regions. The MA is considering how to utilise this money, such as identifying potential new calls, exploring the potential to increase funding to existing projects in the MD CoR that are performing well, and identifying high performing projects in the Transition Region who may be interested in extending their projects via a transfer of funds from the MD CoR.

The Transition CoR has performed better and is on course to utilise the full YEI allocation.

3.6 Performance

To date, in England, YEI has supported a total of 77,041 young people who are NEET and spent €180.9m (YEI and ESF funding, including domestic Match Funding).

Latest results from the YEI evaluation continue to present a positive picture. Looking at employment outcomes (CR11), 43% were in employment, including self-employment, six months after leaving YEI. While slightly down on previous figures (48%), this remains substantially above the programme target of 34%. There was little variation between the results for men (49%) and women (47%). The result for self-employment (CR12) was slightly below the target (latest result 2%, target 3%) with women (1%) faring less well than men (3%). 20% were in continued education, training programmes leading to a qualification, an apprenticeship or a traineeship six months after leaving (CR10), again substantially above the programme target of 15%. Again, there was little variation between this result for men (19%) and women (21%).

As detailed in section 4, the positive employment results from the survey are now supported by analysis from counterfactual impact evaluation, which shows that on average, YEI participants were in employment for an additional 56 days in the twelve months following YEI participation, compared with a similarly matched group of NEETs who didn’t take part in YEI. This provides a strong indication that the outcomes were achieved as a result of YEI over and above other factors, such as improving youth employment rates in the UK over the programme period.

Examples of YEI activity currently taking place in England include the following.

Springboard, which works with 20 delivery partners in a number of sectors in the city of Hull and across the Humber. Participants receive help with barriers to work such as travel, childcare costs and mental health issues, as well as training when required. Strong working relationships with Jobcentre Plus, alongside their partners’ own recruitment activities, has resulted in a high level of referrals for this programme.

By the end of 2019 the Springboard project had achieved the following Outputs and immediate Results: 3,400 Participants; 1,657 into work, apprenticeships or education or training on leaving; 2,310 gained qualifications.

Liverpool City Region’s Ways to Work YEI project helps economically inactive young people to access a range of services, including: high quality information; advice and guidance; transitional employment opportunities, and skills development. Participants are provided with 1-2-1 support and a personalised action plan. Participants on the project are able to access financial support to prepare them for work, as well as work experience opportunities.

By the end of 2019 the Ways to Work project had achieved the following Outputs and immediate Results: 32,921 participants with 6,726 into education or training, gaining a qualification, or in employment, including self-employment, against a target of 6,965. The project helped 383 participants achieve a qualification.

OnTrack engages and supports NEET young people aged 15 to 29 in Thurrock. It will reduce youth unemployment in the authority and support the South East LEP (SELEP) ESIF strategy.

OnTrack has been delivered in partnership by Thurrock Council and The Consultancy Home Counties Group (TCHC), combining the expertise and performance of an established local training provider with the local understanding and connection to local services of a local authority. The project used innovative, targeted approaches to engage participants into intensive and personalised 1-2-1 mentoring and support, helping them navigate existing funded services and new tailored elements including: work placements; Information Advice and Guidance, and personal budgets.

By the end of 2019 the OnTrack project had achieved the following Outputs and immediate Results: 1,323 participants against a target of 1,310; 597 into education or training, gaining a qualification, or in employment, including self-employment against a target of 716. The project helped 340 participants achieve a qualification against a target of 392.

The Pathway to Success, Princes Trust YEI project supports NEET young people aged 16 to 25 in Liverpool City Region, targeting those furthest from the labour market, particularly those at risk of social exclusion and from marginalised communities.

The project provides a targeted, flexible and personalised pathway comprising their Fairbridge, Get Started and Get Into personal development and employability programmes which offer: intensive 1-2-1 support with different entry points and progression pathways into appropriate interventions; further training; and work suitable to individual needs and vocational interests.

Project delivery staff will identify eligible young people through The Prince’s Trust website, and an extensive network of other referral partners, Youth Employment Gateway, social media, word of mouth and young people focused events within the Liverpool LEP area.

By the end of 2019, the Pathways to Success Princes Trust YEI project had achieved the following Outputs and immediate Results: 640 participants against a target of 1,126 and 259 into education or training, gaining a qualification, or in employment, including self-employment with a target of 265. The overall contracted target for qualifications achieved on leaving (CRO3) is 230. So far, the project has helped 206 participants achieve a qualification.

3.7 Issues affecting the performance of the programme and measures taken (Article 50(2) of Regulation (EU) No 1303/2013)

(a) Issues which affect the performance of the programme and the measures taken.

The Programme made significant progress during 2019 with a high volume of commitment through Funding Agreements (FAs) and payments made to Grant Recipients (GRs). Lessons learned from the 2018 N+3 process led to close monitoring of claims submission and ensured that the 2019 target was achieved with an excess of €43.1m.

To further support commitment of funding, the MA has successfully implemented online applications and appraisals, which was a key requirement of the EPSA audit. Calls are now loaded onto ECLAIMS and applicants apply for funding online. MA staff use these electronic applications to appraise projects which reduces the MA’s need to upload and update information, cutting down the time from Call Closure to the issuing of an FA.

The MA has introduced a suite of contract management tools to drive improved performance of financials and deliverables for Direct Bids, which provides Contract Managers with more useable data in order to challenge under performance. The use of these performance monitoring tools has been rolled out to CFOs.

The MA has dedicated leads for each CFO; this provides consistent advice and guidance to support the timely submission of claims. CFO performance is managed through monthly teleconferences and twice yearly Performance Monitoring Meetings, providing the MA with the opportunity to discuss performance variances and ensure that the CFO will deliver Outputs and Results in line with contracted profiles. The CFOs also conduct monthly contract performance meetings with their procured contracts, and implement Performance Improvement Plans where contracts fail to meet minimum requirements. Where local areas have confirmed a continued need, the highest performing contracts have qualified for contract extensions.

Throughout 2019, CFOs have been given the opportunity to revise funding profiles and either release unused funds back to the MA, or extend projects where appropriate. In some instances, LEP areas took up the opportunity for new CFO provision, whilst others chose to close underperforming projects.

To encourage performance improvements, CFOs have supported best practice sharing forums. This has aided in the development of recovery plans for those Projects struggling to meet performance requirements.

In the Less Developed Region (LDR), CFOs worked closely with providers to improve performance by: using SMART action plans; holding regular performance meetings and, using Quarterly Review and published Performance Management Points.

The MA continued to work intensely with Cornwall and the Isles of Scilly (CIoS), ESF England’s only LDR, during 2019. CIoS has relatively low numbers of unemployed people which has caused some challenges with the achievement of PA 1 targets, resulting in a slow start to the 2014 to 2020 Programme.

The LD Category of Region (CoR) exceeded its Performance Framework PA2 targets by a substantial margin and also crossed the 85% threshold for PA1 Participants, enabling the latter target to be considered “achieved”. However, the PA1 2018 target for Financials was not achieved, with a final outturn of 77%.

The 6% Performance Reserve (PR) value was added to original allocations. The implication of this in the LDR is that the value of the PR needed to be moved, along with associated targets, from PA1 to PA2 in the LD CoR. The MA has worked closely with colleagues in CIoS to determine the detail of this transfer and a request to amend the OP was submitted on 16 March 2020.

Following a revision of the European Commission’s (EC) approach to decommitment, the EC confirmed that the YEI could continue to be spent up to the end of 2023. A YEI call to the value of £80m was a launched in July 2019 and the applications are currently being appraised.

Local areas report a lack of available Match Funding and this has been cited as a reason for a lack of applications against some published Calls. Of the 121 Calls published during 2019, (valued at £463m), 25 of them (totalling £48m), failed to attract any applications and as a result, the MA continuously looks to support the Programme by identifying opportunities for Match Funding.

The MA identified that the Apprenticeship Levy was suitable Match Funding during 2017, however the complexity of the Levy made it difficult to evidence and prove clean Match. In March 2019, a satisfactory and auditable solution was identified. This information was published in Action Notes 006/17 and 031/19 on the [GOV.UK] (https://www.gov.uk/government/publications/esf-action-notes-2014-to-2020-programme) website to support projects bidding for funding.

During the Operations Audit, GIAA identified a number of procurement breaches, including the discovery of a systemic error relating to one major Grant Recipient in respect of procurement use of their Register of Training Organisations (RoTO). Appropriate action for 2018/19 accounts was taken and the 2019/20 accounts will be reviewed to ensure that the appropriate recoveries for affected claims are recognised accordingly.

The MA will be undertaking a view of the of the RoTO issue to determine what improvements can be made, including an assessment of:

• further linked expenditure in the 2019/20 reference period, quantifying the financial impact to inform the 2019/20 End of Year reporting, as the value of the irregularity is still to be quantified

• the impacts beyond the current 2019/ 20 reference year, depending on the make up of Interim Payment Applications

• whether similar weaknesses might occur elsewhere in other large CFO procurement activities

The Managing Authority (MA) launched a Reserve Fund (RF) on 20 September 2019, with an initial value of just over £390m. The RF will enable the MA to ensure the most effective management of remaining funds until the end of the Programme, and while local Calls will still be launched, they can now be better targeted to fill both geographical and performance gaps. The RF is kept under continual review through assessment of committed spend, the pipeline of appraisal activity, proposed Calls and exchange rate movements.

Monitoring Programme performance has enabled the MA to identify commitment gaps for certain disadvantaged groups and as a result, increased emphasis has been made on supporting the over 50s, people from a BAME background and individuals lacking basic skills. Going forwards, Calls will now be focused on those disadvantaged groups and will target those less able to access ‘mainstream’ support, thus ensuring that the Programme meets its overall targets. The MA will continue to closely manage the performance of the Programme through 2020.

An assessment of whether progress made towards targets is sufficient to ensure their fulfilment, indicating any remedial actions taken or planned, where appropriate.

Programme progress against targets has been on track during 2019, except for achievement of the Less Developed Region (LDR) ‘spend’ target for the 2018 Performance Framework. Details are set out at 6(a). The LDR had a slow start to the 2014 to 2020 Programme. The situation is improving and there have been Calls to the value of £74.8m launched, an in year increase of £25.4m. This, plus CFO contracts in the Region, have resulted in projects valued at £70.2m being approved and a further £23.9m in the pipeline. If all the applications in the pipeline come to fruition, this would lead to 66% of the notional allocation being committed in the LDR. Further Calls are planned that would utilise the entire LDR notional allocation.

The 6% Performance Reserve (PR) value was added to original allocations. The implication of this in the LDR is that the value of the PR needed to be moved, along with associated targets, from PA1 to PA2. The MA worked closely with colleagues in the LDR and a request to amend the Operational Programme (OP) was submitted to the European Commission on 16 March 2020.

The 2019 N+3 target was exceeded by 2.9% generating a surplus of €43.1m, which will be carried forward into 2020. Progress towards the 2020 N+3 target is also strong. The forecast shows that with a continued claim rate of 90%, the MA will be on track to achieve the target by Q2 2020.

Due to the slow start to the Programme, the MA has been working closely with Local Enterprise Partnership (LEP) areas to improve commitment levels. These local stakeholders advise the MA on strategic needs in their area and how ESF funds can best fill the gaps in existing provision. Steps taken to improve commitment levels include:

• raising the Minimum Call Value from £50k to £150k

• increasing the Minimum Application Level to the greater of either 25% of the Call value or £150,000

• encouraging joint working between LEP areas

• launching fewer, larger Priority Axis Calls

• encouraging consortia bids

As previously stated, the Calls moderation and appraisal system has been streamlined to reduce delays in getting Calls from inception through to a signed Funding Agreement, and now includes an online application and appraisal process.

The MA had been operating 38 different notional allocations, reflecting the LEP areas. During 2019, the MA encouraged these LEP areas to develop forward looking Call plans to December 2019. The residual uncommitted funds from this exercise created the Reserve Fund (RF).

The RF was launched on 20 September 2019, with an initial value of just over £390m. This value will vary in line with exchange rate fluctuations.

Local Calls will continue to be launched and the RF will help ensure the most effective management of remaining funds until the end of the Programme, enabling us to fill both geographical and performance gaps.

While the MA is confident of meeting the overall Programme targets by the end of 2023, it now finds itself in a rapidly changing situation due to the COVID-19 pandemic.

The full extent of the impact of COVID-19 on the economic and employment situation in England and the recovery action required, will become clear over the coming months. Work is already underway between the MA, beneficiaries and local partners to determine what activities are still viable and necessary, and what changes may be required to support the economic recovery activity in England.

4. Citizen’s summary

A citizen’s summary of the contents of the annual and the final implementation reports shall be made public and uploaded as a separate file in the form of annex to the annual and the final implementation report

4.1 Report on the implementation of financial instruments

Optional for the report to be submitted in 2016, not applicable to other light reports: Actions taken to fulfil ex-ante conditionalities

4.2 Progress in preparation and implementation of major projects in preparation and implementation of major projects and joint action plans (article 101(H) and 111(3) of regulation (EU) NO 1303/2013)

Major projects

Significant problems encountered in implementing major projects and measures taken to overcome them

Not applicable

Any change planned in the list of major projects in the operational programme

Not applicable

4.3 Joint action plans

Progress in the implementation of different stages of joint action plans

4.4 Significant problems encountered and measures taken to overcome them

Not applicable

Date table for the above can be found within data tables 12 to 15

5. Part B

5.1 reporting submitted in years 2017,2019 and final implementation report. (Article 50(4), 111(3) and (4) of regulation (EU) No 1303/2013

6. Assessment of the implementation of the Operational Programme (articles 50(4) and 111(4) of regulation (EU) NO 1303/2013)

6.1 Information in Part A and achieving objectives of the programme (Article 50(4) of Regulation (EU) No1303/2013)

Priority Axis:1	Inclusive Labour Markets
Priority Axis:2	Skills for Growth
Priority Axis:3	Technical Assistance

Specific actions taken to promote equality between men and women and to prevent discrimination, in particular accessibility for persons with disabilities, and the arrangements implemented to ensure the integration of the gender perspective in the operational programme and operations (Articles 50(4) and 111(4), second subparagraph, (e) of Regulation (EU) No 1303/2013)

Not applicable

Sustainable development (Articles 50(4) and 111(4), second subparagraph, (f) of Regulation (EU) No 1303/2013)

Not applicable

Reporting on support used for climate change objectives (Article 50(4) of Regulation (EU) No 1303/2013)

|Priority axis| Amount of support to be used for climate change objectives (EUR)| Proportion of total allocation to the operational programme (%) | | Total| 0.00| 0.00% |

Role of partners in the implementation of the programme

Not applicable

7. Obligatory information and assessment according to article 111(4), first subparagraph (A) and (B), of regulation (EU) NO 1303/2013

Not applicable

Progress in implementation of the evaluation plan and the follow up given to the findings of evaluations

Not applicable

7.1 The results of the information and publicity measures of the Funds carried out under the communication strategy

Not applicable

8. Actions taken to fulfil ex-ante conditionalities (Article50(4) OF regulation (EU) NO 1303/2013) (may be included in the report to be submitted in 2016 (see point 9 above). Required in report submitted in 2017) Option progress report.

Not applicable

9. Additional information which may be added depending on the content and objectives of the Operational Programme (Article 111(4), second sub paragraph, (a), (b), (c), (d), (g) and (h), of regulation (EU) NO 1303/2013)

9.1 Progress in the implementation of the integrated approach to territorial development, including development of regions facing demographic challenges and permanent or natural handicaps, integrated territorial investments, sustainable urban development, and community led local development under the operational programme.

Not applicable

Progress in the implementation of actions to reinforce the capacity of Member State authorities and beneficiaries to administer and use the Funds.

Not applicable

9.2 Progress in the implementation of any interregional and transnational actions.

Not applicable

9.3 Where appropriate, the contribution to macro-regional and sea basin strategies

As stipulated by the Regulation (EU) No 1303/2013, article 27(3) on the “content of programmes”, article 96(3)(e) on the “content, adoption and amendment of operational programmes under the Investment for growth and jobs goal”, article 111(3), article 111(4)(d) on “implementation reports for the Investment for growth and jobs goal”, and Annex 1, section 7.3 on “contribution of mainstream programmes to macro-regional and sea-basin strategies, this programme contributes to MRS(s) and/or SBS:

• EU Strategy for the Baltic Sea Region (EUSBSR)

• EU Strategy for the Danube Region (EUSDR)

• EU Strategy for the Adriatic and Ionian Region (EUSAIR)

• EU Strategy for the Alpine Region (EUSALP)

• Atlantic Sea Basin Strategy (ATLSBS)

Progress in the implementation of actions in the field of social innovation, where appropriate.

  Not applicable

9.4 Progress in the implementation of measures to address the specific needs of geographical areas most affected by poverty or of target groups at highest risk of poverty discrimination or social exclusion, with special regard to marginalised communities and persons with disabilities, long term unemployment and young people not in employment including, where appropriate, the financial resources used.

PART C Reporting submitted in year 2019 and final implementation report (Article 50(5) of Regulation (EU) No 1303/2013)

10. Financial information at Priority Axis and programme level (Articles 21(2) and 22(7) of regulation (EU) NO 1303/2013)

11. Smart, Sustainable and Inclusive Growth (option progress report)

Information on and assessment of the programme contribution to achieving the Union strategy for smart, sustainable and inclusive growth.

12. Issues affecting the performance of the programme and measures taken – Performance and measures taken — Performance Framework (Article 50(2) of regulation (EU) NO 1303/2013)

Where the assessment of progress made with regard to the milestones and targets set out in the performance framework demonstrates that certain milestones and targets have not been achieved, Member States should outline the underlying reasons for failure to achieve these milestones in the report of 2019 (for milestones) and in the final implementation report (for targets).

13. Youth Unemployment Initiative (Article 19(4) and (6) of Regulation (EU) No 1304/2013 (where applicable))

The report submitted in 2019 shall set out and assess the quality of employment offers received by YEI participants, including disadvantaged persons, those from marginalised communities and those leaving education without qualifications. The report shall also set out and assess their progress in continuing education, finding sustainable and decent jobs, or moving into apprenticeships or quality traineeships.

The report shall set out the main findings of evaluations assessing the effectiveness, efficiency and impact of joint support from the European Social Fund and the specific allocation for YEI including for the implementation of the Youth Guarantee.