Promoting youth employment through EU funds: unclear benefits and high volume of support as unemployment is at an all-time low

Press release on Audit No 18/28 – 30 September 2019

The Supreme Audit Office (SAO) has examined the provision and spending of EU funds aimed at increasing youth employment between the years 2014 and 2018. The Ministry of Labour and Social Affairs (MoLSA) allocated over CZK 1.3 billion from the Operational Programme Employment 2014-2020 (OPE) and involved over ten thousand young people. The SAO has identified a number of shortcomings, both in the set-up of the system and, above all, in the spending of funds. The MoLSA did not set up measurable targets within the programme and therefore it was not possible to evaluate whether the financial support had served its purpose. Moreover, it failed to take into account a significantly low level of youth unemployment. In any case, it was not possible to determine whether the projects were effective because the Labour Office of the Czech Republic did not monitor their impact on youth unemployment.

Funds from the OPE were supposed to help increase the employment rate of people aged 15 to 29. Since 2013, the unemployment rate of this age group had been falling and in 2018 it fell to 6.7 %. This is well below the EU average in the long term. But, the MoLSA continued to provide financial support to increase employment at the same rate as it had done so at the time when the programme was designed and when the economic crisis was culminating. As part of the “Europe 2020” Strategy, the Czech Republic has set itself the objective of reducing youth unemployment by one third compared to 2010, which had been achieved in 2015, that is before the audited projects had even started.

In 2017, the MoLSA even increased the financial support for this age group by CZK 339 million, although the external evaluation of the programme pointed out that persons under the age of 25 were no longer a vulnerable group in the labour market and therefore they did not need special aid. To this end, the MoLSA should have targeted young people with multiple disadvantages, such as physical disability, low labour skills, threat of social exclusion, etc. However, the MoLSA responded to changes in the labour market and recommendations as late as in 2019, i. e., during the audit of the SAO.

The objectives of the MoLSA for allocating financial support were determined insufficiently, as was highlighted by an evaluation committee in the case of two projects. Therefore, it was not possible to assess whether the projects had served their purpose. For example, this applied to the objectives to increase accountability and access to work, to reduce the average time a person is recorded as unemployed, or to reduce the share of unemployed young people in the labour market.

The SAO audited three projects which received financial support amounting to a total of more than CZK 469 million. These projects were implemented by the Labour Office of the Czech Republic and the Ústí nad Labem Region. However, it was not possible to determine whether the projects were effective and helped to increase youth employment. The Labour Office did not keep track of how participants succeeded in the labour market once the project ended.

According to the framework of the OPE projects, the Labour Office was supposed to provide special treatment to project participants. However, the auditors have found that the Labour Office treated the participants within the framework of its standard services, in other words it did not offer any special services. For example, in the case of one project the participant was eligible for three hours of counselling but in reality received only one hour and fifteen minutes of counselling. Also, the projects were not complemented with further support that would ensure participants would not return to the register of unemployed persons once the project came to an end.

In the case of several project participants, the auditors have found that they did not need any support and managed to find a job or a traineeship by themselves. In one of the projects which was aimed at young unemployed people not registered at the Labour Office there was a surplus of those who had already been registered with the Office. Some participants received support from two projects at the same time. The MoLSA did not use an information system to detect any duplications, but only relied on the monitoring of the Labour Office. However, the Labour Office is not capable to detect all the cases where the participant is involved in two projects at the same time.

The Labour Office did not prohibited young people from taking up a subsidised job and being employed elsewhere at the same time. The Labour Office monitored employers providing subsidised jobs only formally.

In addition to that, the Labour Office assigned the project participants to inappropriate positions. For example, one of the project participants who had a university degree in law and also had legal training was assigned to a subsidised position in a private dental practice.

Communication Department
Supreme Audit Office

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