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“Social investment has always been seen as a cost, while it is an investment for the future”: this was the starting, and closing, point made by Mr Wolfgang Greif, Rapporteur of the EESC Opinion, at the public hearing "Employment (and fiscal) effects of social investment" on January 14.  Michel Mercadié member of Social Platform’s board spoke at the event to express our views on social policies and services as an investment for better cohesion in our societies.

In the social sector the focus is mostly on labour productivity, effectiveness/efficiency trade-offs, return-on-investment and cost-benefit analysis, and not the impact of social investment. This happens because the priority when investing in the social sector is focused on the financial aspect of spending public money, instead of addressing people’s needs. Instead of monitoring social results (focusing on impact, rather than input or output), the austerity paradigm has only tried to shift the risk of these investments from the public to the private sector. As a consequence, investments follow market rules with even more focus on financial aspects. However social spending should instead mostly be led by social aims, motivated by social pursuits and creating an asset (human capital) which gives outcomes in the long term. The influence of effectiveness/efficiency assessments in deciding why and how to invest in the social sector was underlined by Mr Egbert Holthuis, from DG EMPL. This is crucial when we talk about disparities among Member States budgets. After the comments received on the Social Investment Package, the Commission is currently working on the integration of the Social Investment measures in its general framework related to the EU Semester recommendations.

Prof. Anton Hemerijck argued that a paradigm shift is needed: just because the financial crisis seems to be over doesn’t mean that the social problems are over too. The EU can’t stop here and there are other issues to face: some welfare states have macroeconomic mistakes to correct (such as budget cuts to education and health services etc.) as evidence shows those states who offered more social protection during the crisis actually reacted better to the crisis.

Michel Mercadié expressed our general opinion in favour of the analysis and the proposals presented, which endorsed some of our previous requests. The role of social entrepreneurship is becoming ever more important. We believe no one should be excluded from the labour market and that social entrepreneurship means looking at everybody’s competencies to enhance their access to the labour market. On the resilience of social enterprises: even during the crisis, the social economy sector created more jobs than other sectors – currently employing over 11 million people. He also stressed the importance of Public-Private-Partnerships for the implementation of social investment strategies, but made a clear distinction between commercial and non-commercial ones. He gave a clear example of how impact assessments have shown that social investment brings proper budgetary and fiscal returns on investment.

Regarding activation measures, various forms of workfare are possible. It was said that priority should be given to youth and the long term unemployed. The EESC Opinion pays attention to the quality of jobs beyond employability, and we totally agree: support to non-decent jobs should be removed. A job no longer guarantees a decent income, and increasing poverty is leading to people not being able to pay for essential services such as health care and education.

Some interesting case studies showing how to contribute to social inclusion came from Eurofound, which examined 30 experiences among 10 EU member states on home-care services. The analysed initiatives were successful either in creating more jobs in the provision of health or in improving the quality of jobs (you can download their entire report online).