Time for a systemic change to promote social investment

Last Monday we participated in the Annual Convention for Inclusive Growth organised by the European Commission – previously called the Annual Convention of the European Platform against Poverty.

While I was listening to the debates, I was pleased to notice a change in the rhetoric by high representatives of the European Commission. In November 2014, Jean-Claude Junker, President of the European Commission, declared in front of the European Parliament: “I want Europe to be dedicated to being triple-A on social issues, as much as it is to being triple-A in the financial and economic sense”. Until now, no one has really understood what this means in practice. At the Annual Convention, Commissioner Thyssen made an attempt to share her understanding of it: a “social triple A” represents a commitment that economic issues go hand in hand with social issues. The social dimension has to be taken up in the European Semester – the annual cycle of economic governance, setting out general economic and social priorities for the European Union and providing Member States with policy guidance for the following year.

Allan Larsson, Special Adviser to the Commission for the European Pillar of Social Rights, acknowledged that social policies not only benefit people, but also the economy. Indeed, the best performing Member States are the ones with strong social systems. The social and the economic are sides of the same coin. He stressed that the main link between social and economic issues is education: we need to start with investing in children.

On the one hand I was happy to hear this, although with a mixture of sadness; social NGOs have already been making such recommendations for six years. On the other hand, I wondered, “Are these just nice words? Will these declarations translate into concrete policy actions?” These considerations resonate within me even stronger after the horrific attacks in Brussels. While the intelligence, police and judicial systems have to do their work, social policies must also become more prominent.

The Junker Commission has put investment high on the EU agenda, namely through the Investment Plan and the European Fund for Strategic Investments (EFSI). Within the broader context of investment, Social Platform wants to reclaim the legitimate space of social investment. Investing in good social policies, services and human capital is the only way to build better, fairer, more equal and inclusive societies. This would serve not only people, but also the economy. EFSI is just one of the available instruments – definitely not the only one – that can give us the opportunity to do so. At the Annual Convention I reported to the plenary on the recommendations arising from the workshop dedicated to EFSI.

Participants all agreed that there is a huge need for investment in the social sector – not only because public budgets are shrinking, but also because of demographic and societal challenges, alongside the important transformations and reforms the sector is undergoing. However, while money seems to be available for the social sector through EFSI, five main barriers persist for its use; a lack of tailored information on how EFSI can be used for the social sector, the lack of specific instruments for the sector, the limited understanding of the social sector by financial institutions, the lack of financial skills in the social sector, as well as public authorities’ fiscal constraints that limit their investment capacity.

The main recommendations were:

  • Improve the accessibility of information about EFSI’s possible use in the social sector.
  • Involve experts from the social sector, together with financial experts, in the development of more tailored tools.
  • Improve the technical capacity of public authorities and social service providers.
  • Improve the financial sector’s understanding of the social sector through training, including on quality criteria for social services.
  • Allow for more budgetary flexibility when public authorities invest in social, health and education services.

Let’s pick up some of these recommendations and work together. It’s time to change words into action!