Towards social investment for growth and cohesion

The European Commission sees welfare states as having three functions: social investment, social protection and stabilisation of the economy. A new set of policy proposals argues for a recalibration of welfare and health towards a social investment model. The Social Investment Package (SIP) launched on the 20 February by the Commission contains proposals on a range of areas to encourage investment in human capital and promote measures “strengthening people’s current and future capacities.” The main headlines of the Social Investment Package are to:

  • Increase the sustainability and adequacy of social system through simplification and better targeting
  • Pursue activating and enabling policies through targeted, conditional and more effective support
  • Promote social investment throughout the life-cycle, emphasising early years support for children and preventive approaches in later life

ESN chair Lars-Göran Jansson comments: “I am delighted to see the long-standing commitment in social services at local level to investing in service users’ potential included in the Social Investment Package.” Indeed the Commission notes that “welfare systems have contributed to improving social outcomes”, making a substantial difference to poverty rates, for example. Lars-Göran Jansson continues: “Social investment provides a promising basis for public authorities to work with non-profit and for-profit actors alike, and of course with people and communities, to renew our collective commitment to wellbeing and social inclusion for all.”

The adoption of this initiative by the Commission is timely given slow economic growth and austerity policies undertaken by Member States since the crisis. The challenge is to make long-term social investment and short-term fiscal consolidation mutually supportive. There are dramatic tensions between those advocating for and against further austerity in national politics, for example in the recent Italian elections.

It is not clear which arguments will prevail at national or European level, but, ESN's Policy Director Stephen Barnett argues, “We see experiences at local level of services being reformed to focus on ‘service users’ strengths and abilities’ whilst also addressing local budget constraints. The Social Investment Package offers our sector a real opportunity to work towards systemic change, building on innovative practices and approaches that are already working well.” ESN therefore welcomes the Social Investment Package and would encourage its Members and other stakeholders to utilise its arguments and ideas at national, regional and local level for investment in and reform of social and related services.

The next steps at EU level are for the Commission to achieve endorsement from the European Parliament and Council (where central governments are represented). The Commission also wishes to work with stakeholders to further develop the ideas and proposals presented in the package, notably for ESN on the use of Structural Funds, the ‘Investing in Children’ Recommendation and ‘one-stop-shops’. The European Parliament and others have already argued for an ‘EU Social Investment Pact’ to complement the EU Plus Pact on fiscal and competitiveness reforms in 2011 – this would certainly send a strong signal of the EU’s commitment to cohesion and growth alike.