Reduction of youth unemployment and the setup of co-operatives

Date de clôture : 30 juin 2016  
APPEL À PROJET CLÔTURÉ

1. CONTEXT

Unemployment has risen dramatically across Europe over the last three years and young people face even tougher conditions in entering the labour market. The youth unemployment rate1 in the EU-28 was more than double the overall unemployment rate in 2014. At 22.2 %, more than one out of every five young persons in the labor force was not employed, but looking and available for a job. In the euro area, the youth unemployment rate was even higher at 23.8 %.2.

This decent work deficit does not only put young people at risk: entire societies are at risk of seeing increasingly social conflicts and political unrest due to the lack of job opportunities. Not only do underutilized young people incur significant losses by not fulfilling their potential, but this underutilization of young people in the labour market can trigger a vicious circle of intergenerational poverty and social exclusion. Today, too many young people are experiencing a dangerous mix of high unemployment, increased inactivity and precarious work, as well as persistently high working poverty.

Young people represent the promise of changing societies for the better. The youth employment crisis, considerably aggravated by the global economic and financial crisis, now requires governments, employers and workers to work even harder to promote, create and maintain decent and productive jobs. Unless immediate and vigorous action is taken, the global community confronts the grim legacy of a lost generation. Investing in youth is investing in the present and future of our societies.

One reason for this situation lays in the fact that inadequate quality and relevance of education and training can strongly affect the length and quality for school-to-work transition of young people. The lack of alignment between the education system and the needs of employers generate a mismatch between supply and demand of labour. Young people struggle to find a job that suits their qualifications, and employers fail to recruit the graduates with the right skills set.

The Commission's objective is clear: to get the economy back on a path of growth and to create new and decent jobs. The crisis destroyed many jobs – especially those of low-skilled workers. Now most new job offers require a different and higher skill-set than in the past3. The first pillar of the Entrepreneurship 2020 Action Plan4 adopted by the Commission in 2013 focuses on entrepreneurial education and training where the Commission intends to give young people the entrepreneurial knowledge and skills that will create a future generation of entrepreneurs.

The Commission estimates that youth entrepreneurship can be a pathway to decent work and sustainable enterprise for some young people and should be a component of national efforts to address the youth employment crisis. Embedding entrepreneurship education and curricula5 at an early age, in secondary and universities can be an effective way of improving attitudes towards entrepreneurship.

Young people are enthusiastic about starting businesses and are increasingly interested in socially responsible business. Promoting youth entrepreneurship with the aim of encouraging the growth of sustainable enterprises can therefore be another key element to tackle unemployment.

Whereas young people often cite that it is the cooperative values and principles that make cooperatives attractive to them both a means to create their own enterprises or as a potential employer, one needs however to note that schools traditionally teach traditional business management with focus towards conventional business models.

Few schools focus on different business models such as the model of cooperatives or include cooperative entrepreneurship in their curricula. Yet, the cooperative model is an option for young people as it has low capital requirements, limited liability, and in cases where members are also employees, the flexibility of self- employment. This self-employment option is particularly important for young people to enter into the labour market when faced with problems of finding a first job due to lack of opportunities or lack of experience.

Through their distinctive focus on values, cooperatives6 have proven themselves a resilient and viable business model that can prosper even during difficult times. By creating their own cooperative enterprises, tailored to local needs, young entrepreneurs encourage economic development in their community, simultaneously contributing to their individual capacity‐building and skill‐development As such, cooperatives make a strong contribution to the prevention and eradication of poverty, the creation of social safety‐nets, and the empowerment of youth.

To enable young people to fully take advantage of the cooperative enterprise option, a number of challenges need to be addressed. In many countries cooperatives are not included in school curricula, and so young people do not have the opportunity to learn about the form of enterprise during their studies. Many possibilities however exist to promote the cooperative model in secondary and universities such as:

•   development of dedicated courses with delivery of specific technical skills using mini-companies and activities entailing active learning and real-life situations.

•   supporting on the job training/internship for students during their studies. Cooperatives can facilitate school-to-work transition by providing on-the-job training to young people through internship or apprenticeship programmes in close cooperation with education. In offering a combination of career- related work experience and advanced employability skills, cooperatives invest in youth, offering first exposures to the world of work and breaking the “experience trap”.

•   promoting school cooperative ("junior enterprises/mini companies"). For young people still in school or at the university, it is a great opportunity to combine work experiences and school-based education introducing young people to the cooperative model of enterprise while providing exposure to the skills needed in running a business. School cooperatives can also offer basic financial services for savings and micro-credit and in doing so introduce basic financial literacy. Young people run the enterprise and gain valuable pre-employment experience by exposure to skills and entrepreneurial culture.

  It appears that much needs to integrate co-operative model education into the education continuum, starting at an early age. The creation of co-operative as a business option needs to be reinforced.

  In this context, the European Parliament decided in 2015 to initiate a Pilot Project7 aiming at tackling youth unemployment and helping young people to create cooperative forms of enterprises.

  The present call for proposals is a response to the European Initiative with a view to support actions that would contribute to reduce youth unemployment in Europe by ensuring that cooperative form of enterprises is adequately covered in educational curricula. 

2. OBJECTIVE OF THE CALL

2.1. GENERAL OBJECTIVES

To enable young people to fully take advantage of creating a company, a number of challenges needs to be addressed as regards entrepreneurship education especially when it comes to different kind of business organisation to be taught.

In many countries cooperatives forms of companies are for instance not included in school curricula, and so young people do not have the opportunity to learn about the form of enterprise during their studies. The teaching of entrepreneurship in schools, colleges and universities across Member States is focused on conventional business models of the traditional limited liability company with share capital. Gaps in information on cooperatives limit the ability of young people to choose the cooperative enterprise option.

The few initiatives that are put in place to promote the cooperative business model in national educational systems are isolated and thereby not fully exploited. It is not surprising therefore that young people wishing to set up a new business do not even take into consideration the cooperative option, even if the cooperative business model would be the best fit for their project.

Furthermore, the management of a co-operative requires additional skills and capacities specific to this model, in order to deal with the particular control and ownership structure of a co-operative. For example the participatory and democratic structure of co-operatives requires specific competences to assume board responsibility, in order to ensure effective governance; yet the elected officials to the board of directors often lack the required training and skills.

In order to tackle youth unemployment, it is important to put in place policies that encourage educational institutions to include the cooperative model in their curricula.

Supporting the development of entrepreneurship education focussing on cooperatives could encourage youth cooperative employment and start-ups take up. This will not only help provide youth employment but also ensure the generational renewal in cooperatives in existing and emerging sectors.

Priority will be given to projects that will be best replicable especially between Member States where the tradition of the cooperative movement and those where the tradition is weak and where benefits offered by the cooperative model are not sufficiently well known.

2.2. DESCRIPTION OF THE ACTIVITIES ENVISAGED
Projects to be supported under this call shall include the following categories of actions:

(1) Identification of existing training methods/ courses in secondary schools and universities related to cooperative entrepreneurship in curricula. The proposal should include a method to collect on adequate manner information relating to cooperative entrepreneurship training methods and courses for young people and students by schools and universities.

(2) Conception of the training model/preparatory actions for setting up the programme in three different countries. The task will aim at designing training courses for young people in upper secondary school and universities on how to start their own activity in the social or business field through the model of a cooperative. A theoretical and practical approach should be included in the training to be designed.

The methods to be used will a have clear focus on practice based, experience based learning methods. Training and dedicated actions could for instance focus on how to:

•   improve knowledge of the cooperative business concept;

•   guide students in implementing their own ideas, help students to start up business in form of a

  cooperative;

•   stimulate professional and practical training /internships or apprenticeship in co-operatives (ideas on how

  to better use specific EU programs such as Erasmus for Young entrepreneurs should be included in the proposal).

  Although the courses will be tested in an educational environment, the methodology should be replicable also to young people out of education (for instance on the initiative of NGOs, Employment Services, etc.).

  Such training/actions could either materialise in the creation and design of new methods/modules or the adaptation/ improvement of the existing ones. Training methods/courses could be in the form of classroom sessions, seminars, workshops, special working group sessions; conferences and other suitable solutions like web-based seminars in order to develop a cooperative curriculum.

  Within this task, it is expected that the Applicant uses atypical and innovative methods (e.g. special study tours, training visits, development of "junior enterprises/mini enterprises" in the form of a cooperative) in order to increase the practical dimension of the training/courses.

  (3) Organisation and delivery of pilot training courses to test the modules, practices and tools prepared for students in the field of cooperative entrepreneurship in three different countries.
  The applicant will perform the operational management of all training/courses in close cooperation with schools/ universities selected in the three different countries.

  The applicant will propose actions on how it intends to collaborate with the different actors at stake (schools, universities, training centres, academic institutions...) to implement the courses in a supportive and safe learning environment, where participants are encouraged to fully participate. Special attention should be paid during the delivery to make the learning points of the training/ course relevant, sustainable and transferable to youth depending on their age. Giving ample room for reflection and assessment will be key as well as producing exhaustive and comprehensive documentation.

  The applicant should explain how the organisation/delivery of the courses will combine career-related work experience and advanced employability skills in order to break the "experience trap".

  Activities foreseen under the project need to demonstrate a clear European added value by supporting European integration and transnational cooperation.

  Proposals should contain a description of the management structure and processes of the project and the role of the lead applicant in the project management and implementation, what measures will be taken to ensure that high quality standards are applied by all consortium partners, how the achievement of objectives will be monitored, and appropriate corrective measures (such as redistribution of tasks and budget) will be taken, if needed. The main risks that might be encountered and the corresponding mitigating measures should also be described.

  The above description of tasks should be considered as an indication of the type of activities that the Commission wishes to support and of desired results. It will be a responsibility of the applicant to propose the best ways to implement the project and to achieve those results. Activities proposed in these technical specifications can be adapted and innovative solutions can be proposed, provided that the working method is well explained and justified, and that it will allow achieving the goals set out in this call for proposals.

2.3. DELIVERABLES
This call for proposals is expected to result in producing all the reports listed in I.4 of the grant agreement,

which should be submitted in English, namely:

•   A Kick off meeting presentation that will outline the work that will be carried out during the project.

•   1 interim technical implementation report and financial statements, including a consolidated statement and a breakdown between each beneficiary, after 8 months of the project duration covering the first six months of the project.

•   1 final technical implementation report. This report will include all deliverables, a final assessment of the project and recommendations for the future, and a financial statement including a consolidated statement and a breakdown between each beneficiary: within 2 months following the closing date of the action.

  Reports must be submitted by the coordinator in English. 

3. TIMETABLE

No applications will be accepted for projects scheduled to run for a longer period than that specified in this call for proposals

The period of eligibility of costs will start at the earliest the first day of the month following the signature of the agreement by both parties. If a beneficiary can demonstrate the need to start the action before the agreement is signed, the expenditure may be eligible as from a date before the agreement is signed. Under no circumstances can the eligibility period start before the date of submission of the grant application.

Scheduled start-up date for the action: 1 January 2017 Maximum duration of actions is: 12 months 

4. EU FINANCING

Proposals with an EU co-financing beyond any of the above two maxima will not be eligible.

The Commission reserves the right to award a grant of less than the amount requested by the applicant. In such a case, applicants will be asked either to increase their co-financing, propose other co-financing means or to decrease the total costs without altering the substance of the proposal. Grants will not be awarded for more than the amount requested.

Publication of the call (on the Commission Internet site and/or in the Official Journal) does not guarantee the availability of funds for the above action.

4.1. GENERAL PRINCIPLES OF EU FUNDING Non-cumulative award

Each action may give rise to the award of only one grant from the budget to any one beneficiary. In no circumstances shall the same costs be financed twice by the Union budget.

Applicants have to inform the Commission immediately of any multiple applications and multiple grants relating to the same action. The applicant shall inform about sources and amounts of EU funding received or applied for the same action or for part of the action. Applicants shall indicate if they receive EU funding for their functioning during the financial year in which the action takes place.

Non-retroactivity

No grant may be awarded retrospectively for actions already completed.

A grant may be awarded for an action which has already begun, provided the applicant can demonstrate the need to start the action before the grant agreement is signed. In such cases, costs eligible for financing may not have been incurred prior to the date of submission of the grant application.

Co-financing

Grants shall involve co-financing, which implies that the resources necessary to carry out the action or the work programme shall not be provided entirely by EU contribution. EU financing may not cover 100% of the total costs of the action.

Co-financing of the action or of the work programme may take the form of:

•   the beneficiary's own resources,

•   income generated by the action or work programme,

•   financial contributions from third parties.

  Non-profit rule

  EU grant may not have the purpose or effect of producing a profit within the framework of the action of the work programme of the beneficiary.

Maximum budget allocated for EU financing under this call: € 450,000 Indicative number of grants: 2.
Maximum EU financing rate of eligible costs: 70 %
Maximum EU financing amount per project: 225 000 € 

Where a profit is made, the Commission is entitled to recover the percentage of the profit corresponding to the EU contribution to the eligible costs actually incurred. For this purpose, profit shall be defined as a surplus of the receipts over the eligible costs incurred, when the request for payment of the balance is made.

Balanced budget

The estimated budget of the action or work programme is to be attached to the application form. It must have revenue and expenditure in balance.

The budget must be drawn up in euros. Applicants, who foresee that costs will not be incurred in euros, are invited to use the exchange rate published on the Info-euro website available at http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm.

4.2. ELIGIBLE COSTS
In order be eligible for funding, costs should be actually incurred by the beneficiary and meet the following

criteria:

•   they are incurred during the duration of the action or work programme, as indicated in the grant agreement, with the exception of costs relating to the request for payment of the balance and the corresponding supporting documents (audit certificates);

•   they are indicated in the estimated budget of the action or work programme;

•   they are necessary for the implementation of the action or of the work programme, in accordance

  with the description of the action, attached to the grant agreement;

•   they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost accounting practices of the beneficiary;

•   they comply with the requirements of applicable tax and social legislation;

•   they are reasonable, justified, and comply with the principle of sound financial management, in

  particular regarding economy and efficiency.

  The beneficiary's internal accounting and auditing procedures must permit direct reconciliation of the costs and revenue declared in respect of the action/project with the corresponding accounting statements and supporting documents.

  The costs made by affiliated entities can be eligible, provided that:

 

4.2.1.

the entities concerned are identified in the grant agreement;

the entities concerned abide by the rules applicable to the beneficiary under the grant agreement with regard to eligibility of costs and rights of checks and audits by the Commission, OLAF and the Court of Auditors.

Eligible direct costs

Please note that the exact scope of the eligibility of costs is defined by the grant agreement, which will be signed with the successful applicants.

Direct costs of the action are those specific costs which are directly linked to the implementation of the action and can therefore be attributed directly to it. They shall not include any eligible indirect costs.

The following categories of costs can be considered as eligible direct costs:

•   the costs of personnel working under an employment contract with the beneficiary or an equivalent appointing act and assigned to the action, comprising actual salaries plus social security contributions and other statutory costs included in the remuneration, provided that these costs are in line with the beneficiary's usual policy on remuneration. Those costs may also include additional remunerations, including payments on the basis of supplementary contracts regardless of the nature of those contracts, provided that they are paid in a consistent manner whenever the same kind of work or expertise is required, independently from the source of funding used.

•   salary costs of the personnel of national administrations to the extent that they relate to the cost of activities which the relevant public authority would not carry out if the project concerned were not undertaken.

•   costs of travel and related subsistence allowances, provided that these costs are in line with the beneficiary's usual practices on travel;

•   the depreciation costs of equipment or other assets (new or second-hand) as recorded in the accounting statements of the beneficiary, provided that the asset has been purchased in accordance with the conditions applicable to implementation contracts and that it is written off in accordance with the international accounting standards and the usual accounting practices of the beneficiary

•   costs of consumables and supplies, provided that they are purchased in accordance with the conditions applicable to implementation contracts;

•   costs arising directly from requirements imposed by the grant agreement (dissemination of information, specific evaluation of the action, audits, translations, reproduction), including the costs of requested financial guarantees, provided that the corresponding services are purchased in accordance with the conditions applicable to implementation contracts;

•   costs entailed by subcontracts, concluded for the externalisation of specific tasks or activities which form part of the action or workproramme as described in the proposal, provided that the conditions with the conditions applicable to implementation contracts are met;

•   duties, taxes and charges paid by the beneficiary, provided that they are included in eligible direct costs, and unless specified otherwise in the Agreement.

•   costs relating to a pre-financing guarantee lodged by the beneficiary of the grant, where that guarantee is a condition for the payment of a pre-financing;

4.2.2. Eligible indirect costs

A flat-rate amount of 7 % of the total eligible direct costs of the action is eligible under indirect costs, representing the beneficiary's general administrative costs which can be regarded as chargeable to the action/project.

Indirect costs may not include costs entered under another budget heading.

Indirect costs are not eligible for beneficiaries that receive an operating grant from the European Commission.

4.2.3. Non-eligiblecosts

In addition to any other costs which do not fulfill the conditions set out in Article II.19.1, the following costs shall not be considered eligible:

•   return on capital;

•   debt and debt service charges;

•   provisions for losses or debts;

•   interest owed;

•   doubtful debts;

•   exchange losses;

•   costs of transfers from the Commission charged by the bank of a beneficiary;

•   costs declared by the beneficiary in the framework of another action receiving a grant financed from the Union budget (including grants awarded by a Member State and financed from the Union budget and grants awarded by other bodies than the Commission for the purpose of implementing the Union budget);

•   in particular, indirect costs shall not be eligible under a grant for an action awarded to a beneficiary which already receives an operating grant financed from the Union budget during the period in question;

•   excessive or reckless expenditure;

•   deductible VAT.

•   participation by any staff of the institutions in actions receiving grants

•   any other costs which have been specified as ineligible in the call for proposal

  In addition to the above, the Commission can refuse to finance certain costs included in the proposal. The beneficiary can decide to maintain and finance these costs out of his own resources, but they will not be taken into account as eligible costs.

4.3. CO-FINANCING AND JOINT AND SEVERAL RESPONSIBILITY
The beneficiary has to supply evidence of the co-financing provided. It can be provided either by way of own

resources, or in the form of financial transfers from third parties,

In case of a joint application, all partners shall agree upon appropriate arrangements between themselves for the proper performance of the action.

In particular, they shall accept joint and several responsibility for repaying any debt up to the maximum amount of the grant, as stipulated in the Special Conditions of the draft grant agreement.

The final grant agreement shall be signed by each applicant. Alternatively it shall be signed by the appointed co-ordinator, provided that a power of attorney has been conferred to this entity (Annex IV of the draft grant agreement).

4.4. IMPLEMENTATION CONTRACTS/SUBCONTRACTING

Where the implementation of the action or the work programme requires the use of contracts (implementation contracts), the beneficiary must ensure that the contract is awarded to the bid offering best value for money or the lowest price (as appropriate), avoiding conflicts of interests and retain the documentation for the event of an audit.

Entities acting in their capacity of contracting authorities shall abide by the applicable national public procurement rules, in the meaning of Directive 2014/24/EU on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts or contracting entities in the meaning of Directive 2014/25/EU coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors.

Sub-contracting for the purpose of the action

Sub-contracting refers to contracts concluded for the externalisation of specific tasks or activities which form part of the action or work programme as described in the proposal. Such contracts must satisfy the conditions applicable to any implementation contract and, in addition, the following conditions:

 Subcontracting may only cover the implementation of a limited part of the action up to 50 % of the eligible costs.

 It must be justified having regard to the nature of the action and what is necessary for its implementation;

 The proposal should clearly identify the subcontracted activities

Subcontracting does not in any way limit the responsibility of beneficiaries for the implementation of the action. Please note that the beneficiary(ies) should have the necessary capacity to perform the project. Only tasks that are not core business can be sub-contracted to consultants.

It is not necessary to have already selected subcontractors at the time the proposal is submitted. However, cost of contractors not selected in accordance with the applicable rules for procurement will not be eligible.

4.5. FINANCIAL SUPPORT TO THIRD PARTIES
The applications may not envisage provision of financial support to third parties.

4.6. FINAL GRANT AND PAYMENT ARRANGEMENTS
The draft grant agreement annexed to this call for proposals specifies the calculation of the final grant and

the payment arrangements.

Your attention is in particular drawn to the General Conditions of the grant agreement, where the eligibility of costs is described. Detailed explanations and a description how costs should be budgeted and reported can be found in the Guide for Applicants.

EU grant may not have the purpose or effect of producing a profit within the framework of the action of the work programme of the beneficiary. Where a profit is made, the Commission is entitled to recover the percentage of the profit corresponding to the EU contribution to the eligible costs actually incurred. For this purpose, profit is defined as a surplus of the receipts over the eligible costs incurred by the beneficiary, when the request is made for payment of the balance. Where such a surplus occurs, the Commission is entitled to recover the percentage of the profit corresponding to the EU contribution to the eligible costs actually incurred by the beneficiary.

The Commission may require the beneficiary to lodge a guarantee for grants exceeding € 60 000, based on a risk analysis.

In the event that the applicant's financial capacity is not satisfactory, a pre-financing guarantee for up to the same amount as the pre-financing may be requested in order to limit the financial risks linked to the pre- financing payment.

The financial guarantee, in euro, shall be provided by an approved bank or financial institution established in one of the Member State of the European Union. When the beneficiary is established in a third country, the authorising officer responsible may agree that a bank or financial institution established in that third country may provide the guarantee if he considers that the bank or financial institution offers equivalent security and characteristics as those offered by a bank or financial institution established in a Member State. Amounts blocked in bank accounts shall not be accepted as financial guarantees.

The guarantee may be replaced by a joint and several guarantees by a third party or by a joint guarantee of the beneficiaries of an action who are parties to the same grant agreement.

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