Original publication: January 2016
Authors: Erik Gløersen, Marius Drăgulin, Silke Haarich, Sabine Zillmer, Frank Holstein, Cristian Lüer and Sebastian Hans (Spatial Foresight)
Short link to this post: http://bit.ly/2F513wx
The study analyses the role that SGI can play in the 2014-2020 programming period, and how the European Structural and Investment Funds (ESIF) framework can impact them. It shows that the ESIF contributions to improved SGI provision can be strengthened through a focus on capacity building efforts and more integrated territorial approaches. SGI related cohesion policy measures can, as a complement to European competition policy, help to build a social market economy in the European Union.
The importance of services of general interest (SGI) for social and territorial cohesion is acknowledged in the TFEU and other key regulations. Their service in the ‘public interest’ is dynamically defined by national governments, regulators and other stakeholders under the influence of cultural and institutional traditions. Given these differences, depending on Member State or even region, SGI contribute to regional development in mostly indirect ways. Nevertheless, common SGI features like availability, accessibility, affordability and quality can be distinguished and studied, as this report does. Such features allow policymakers to plan, monitor and evaluate their public service obligations, as well as other EU-level regulatory obligations.
In their pursuit of single market integration, EU authorities seek to provide national and regional authorities with the regulatory means to ensure their public service obligations, while preserving the principle of free and undistorted competition to the widest extent possible. SGI therefore play a key role in defining the European model of ‘social market economy’, i.e. how to strike a balance between market integration and the preservation of social, economic and territorial cohesion.
The study analyses the role that SGI can play in the 2014-2020 programming period, and how the European Structural and Investment Funds (ESIF) framework can impact them. It looks at the overall strategic framework that SGI have in EU-level regulation, analyses new opportunities presented in the current period as opposed to the previous one, and provides policy recommendations on how best to implement SGI-related policies to ensure their effectiveness until 2020 and beyond. These findings and recommendations seek to enable the European Parliament and the REGI Committee within to propose specific policy measures to steer the direction of future SGI measures in a direction most suitable for their efficient implementation.
As shown in this report, EU regulators adopt different tactics depending on the type of SGI:
- either letting markets operate freely and afterwards intervening to compensate for the unmet needs of certain social groups or territories, as in banking,
- or regulating through incentives to meet political expectations for public and universal service obligations, as it happens in sectors like telecommunications, energy or transport.
Such a tailored approach is useful in the future, given the regulatory and environmental changes in SGI provision presented here. Given the weak constitutional basis for EU level regulation, dialogues with representative organisations of different sectors play a central in European level interventions. Some novelties in the 2014-2020 ESIF regulation and other legislative acts facilitate this: the introduction of formalised partnerships between public, private and civic actors in the Partnership Agreements, the newly-introduced ex-ante conditionalities requiring consultations with local stakeholders for developing strategies like smart specialisation strategies or the mainstreaming of community-led local development approaches beyond its use in rural development are just a few examples of this.
It is also important for EU policymakers such as the European Parliament to acknowledge the difficulty in comparing levels of SGI provision and access across Europe, given several factors:
- First, such differences occur at sub-regional levels, highlighting the need for placebased policies.
- Second, geographically specific territories like islands and remote areas need services adapted to their needs. A focus on ‘equality of access’ can be counterproductive.
- Third, border regions experience particular problems in linking their SGI provision with their neighbours, calling for greater flexibility in adapting national policies locally and continued dialogues and coordination efforts.
These factors are in no way impenetrable barriers to ensuring availability, accessibility, affordability and quality of SGI, as the numerous case studies in this report illustrate. As shown, it is precisely these tougher conditions that encourage innovative approaches: for instance, transnational cooperation can improve SGI provision in fields such as transport and energy. ESIF can cover financing gaps to fund SGI provision where this is lacking. And innovative governance arrangements share the costs and benefits of providing services of general economic interest between public and private actors.
Though this report studies future challenges and opportunities, the past and its marks cannot be ignored. Especially, the recent financial crisis has triggered important changes in many EU sectors and policies, including those concerning SGI provision. Some Member States, especially in northern Europe, responded with stimulus packages to re-launch the economy, while others, particularly in the south, tightened their belts around public spending via targeted cuts. In SGI, this was most evident in sectors like healthcare or education. To adapt, public authorities increasingly involved private and social economy actors in SGI provision, either through service outsourcing or public-private partnerships (PPP). Such governance arrangements, sometimes innovative, come with both fears and hopes: fears of losing control on quality and transparency, while hope in better addressing public needs if the public is more involved either through NGOs or private actors. Among it all, as described here, social actors and especially social co-operatives proved remarkably fit to take on SGI provision roles due to their resilience and long-term oriented features.
As governance arrangements evolve, so do social conditions and especially technology, forcing public service obligations to adapt. The increasingly vital role of broadband, for instance, creates demand for new types of SGI, as seen in case studies presented in this report. The demand and types of SGI provision are determined by both external pressures and private cost-efficient offerings. This SGI governance evolves through individual and organisational learning: public authorities need new competences to plan strategically, monitor, control quality and outcomes, and negotiate. This is a key field in which ESIF can contribute to SGI provision, e.g. through capacity building efforts and dissemination on European State Aid regulations.
Furthermore, ESIF could play a role promoting more collaborative approaches to the definition of ‘public interest’ within each sector and geographical setting. This would usefully complement legally driven processes of privatisation of SGI delivery, which need to be complemented by pro-active public policies to organise public procurement procedure, quality controls, monitoring and evaluation so as to preserve the public interest.
Cohesion policy can also to a greater extent be promoted as a complement to competition policy with regards to SGI. This would for example imply that ESIF explicitly seek to address challenges and pitfalls of SGI outsourcing and PPP that are extensively observed in the literature, but have so far had limited policy implications at the European and national scales.
Finally, part of the added-value of ESIF lies in the integrated, territorial approaches and multiannual programming. Their contributions to SGI provision therefore need to be encouraged to be less sectoral and more cohesion-oriented. Plans for balanced and coordinated SGI provision may for example be required as an ex-ante conditionality.
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