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Brussels, 2 July 2008

Report on social services of general interest

What are social services of general interest (SSGIs)?

In addition to health and social security services, 'social services of general interest' encompass social assistance services, employment and training services, social housing, child care or long-term care services.

These services play a vital role in our societies and help promote cohesion, employment, social inclusion and economic growth. SSGIs help to create opportunities and are important in the implementation of the Renewed Social Agenda on Opportunities, Access and Solidarity.

They form part of so-called services of general interest (SGIs) which include large network industries (energy, telecommunications, audiovisual broadcasting and postal services), water supply, waste management or education. SGIs are services essential for the daily life of citizens, which are classed by public authorities as being of 'general interest' and subject to specific public service obligations.

Why is the Commission publishing this report?

In the 2006 Communication on SSGIs, the Commission undertook to establish a monitoring and dialogue tool on SSGIs in the form of biennial reports. This dedicated reporting exercise on social services was also announced in the 2007 Communication on SGI.

What are the main contents of the report?

It focuses on services delivered directly to the person and provides an overall picture of these services in the EU. It describes their socio-economic situation and the major economic and societal changes to which they have to adapt. It looks at the way in which they adjust to evolving needs and constraints and how these changes affect the organisation, financing and provision of SSGIs in terms of relevant EU rules.

How important are health and social services to the EU economy?

Social and health services represent a major part of the EU economy, particularly in terms of employment, as most of them are labour-intensive. They make up 9.6% of total employment in the EU, varying from 4.2% in Romania to 18.0% in Denmark.

They have also contributed significantly to job creation in the EU, especially among women and older workers. While workers in these services are generally better skilled, wage levels have declined relatively, and are now below the EU economy average and well below other non-market services. Working conditions are very demanding and job satisfaction is below that of other economic sectors. Part-time work is widespread, which could explain why the sector continues to attract workers. Not surprisingly, turnover is high, staff shortages are frequent, and the influx of workers from non-EU countries has increased.

How much do Member States spend on them?

Financial resources devoted to social and health services account for around 9% of EU GDP, ranging from 3.6% of GDP in Estonia to 10.7% of GDP in the United Kingdom. In the majority of Member States, social protection spending is mostly financed from the public purse but private funding has increased slightly.

How are Member States modernising services?

Modernisation is a response to the social and economic challenges that all EU societies are faced with (ageing, changing gender roles and the quests for social integration, labour market flexibility and greater cost efficiency, etc.). The need for services is becoming increasingly sophisticated and complex, so access remains a key concern.

There are common features in reforms to the organisation and management of SSGIs across Member States. The general aim of increasing efficiency and effectiveness of service provision translates into (i) increased use of performance measurement tools; (ii) user empowerment and user involvement mechanisms; (iii) integration of services; and (iv) decentralisation. The report also observes a shift from public programming towards more market-based regulation.

What are the main trends identified?

Part of the report looks in more detail at three sectors where the impact of socio-economic factors is particularly strong: long-term care, labour market services for disadvantaged persons, and childcare. These three sectors also illustrate the contribution of SSGIs to employment growth in the EU. The report analyses the role of these services in European societies, presents an overview of service provision and expenditure, and describes the modernisation process in these three sectors.

The main modernisation drivers for these sectors are the following: (i) ageing is the main challenge for long-term care services; (ii) labour market services have to adapt to the changing labour market needs; and (iii) the development of childcare services is a response to emerging needs resulting from gender equality policy objectives and changes in family structures.

How is the Commission helping public authorities apply the relevant EU rules?

The report looks at how national modernisation processes impact on the applicable Community law and on the strategy put in place by the Commission to provide stakeholders in this field with guidance and support.

The consultation process launched after the 2006 Communication on SSGIs has shown that the difficulties experienced in the application of Community rules are not caused by the rules themselves but rather by the fact that these rules are not well known and applied and that the possibilities they offer are not fully exploited.

In addition to a series of clarifications provided in the 2007 Communication, two Staff Working Documents, dealing respectively with public procurement[1] and state aid rules[2], provide answers to the most frequently asked questions in the social field during the consultation process.

Moreover, an ‘interactive information service’ (IIS) launched by the Commission in January 2008 provides concrete guidance to citizens, public authorities and service providers by answering their questions posted on a dedicated webpage. Even if it is too early to evaluate this service, the first results are positive and show that it is successful responding to an existing demand.

IP/08/1070: Commission proposes Renewed Social Agenda to empower and help people in 21st century Europe

Where can I find more information about SSGIs?


On SGIs:

[1] SEC(2007) 1514, of 20 November 2007.

[2] SEC(2007) 1516, of 20 November 2007.

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