ESF projects do not necessarily reach the most vulnerable individuals, according to an audit. The Ministry of Economic Affairs and Employment should ensure that ESF project funding would be better allocated to the main target groups, i.e. the unemployed and people in a weak labour market position. In addition, the Ministry should define more clearly the objective of ESF project activities and their relationship with the national labour market policy. Furthermore, the Ministry should develop electronic data collection methods that allow for a less burdensome administrative collection of personal data on participants in ESF projects.
The purpose of the audit was to assess the process of funding the European Social Fund (ESF) development projects, as well as the allocation, follow-up and impacts of the funding during the 2014–2020 programming period.
The audit discovered that employment impacts are not necessarily the main criterion to receive ESF funding, since the ESF programme has a number of other objectives besides employment and the order of importance of those objectives has not been specified. The regional employment situation also affects which projects are supported.
Although the target groups of ESF projects are not limited to the unemployed, the audit shows that the projects do not sufficiently reach the main target group of ESF activities, i.e. the unemployed.
According to the ESF personal data system, only a quarter of the participants were unemployed. This information is based on the participants’ own assessment. Furthermore, the data compiled by Statistics Finland for the purpose of the audit shows that in 2016, only a fifth of the ESF participants were unemployed.
At best, ESF projects can complement the national active labour market policy and, among other things, enable experimenting new employment models. However, if the national labour market policy is not in line with ESF project activities, it may undermine the impacts of ESF projects. From the point of view of ESF activities, it could be useful to define more clearly their objective and their relationship with the national labour market policy.