(Photo: [I'm not there]/Flickr) By Jean Lambert, Green MEP for London, is one of two UK Green representatives in the European Parliament. Over the last 18 months the EU has seen many growing pressures on its social services provision. The unemployment rate in the EU has been rising steadily since April 2008, with Estonia, Spain, Ireland, Lithuania and Latvia being particularly adversely affected. The number of recipients of unemployment benefits has started to rise and the percentage of older workers claiming early retirement or disability has also started to increase. Many pension schemes have faced sharp declines in the value of their investments and credit availability has been scaled back. With no sign of a return to previous employment levels in the near future and combined with other pressures on income, more households are likely to default on rent and mortgage repayments and housing solutions will need to be sought. As such, budgets for social assistance are coming under increasing pressure, although capacity to meet this growing demand varies greatly between Member States. Risk of cuts to services In the UK, the Government is taking a close look at all public services to decide where cuts will be made to make up the huge deficit in the national finances, caused by the massive bailout package to save the banking sector. One allowance likely to suffer is the basic state pension. Since 1980, when the link between its valueand earnings was broken, its real value has been falling year on year. Now the government’s commitment to increasing the value of pensions is likely to be postponed until 2015, and if the Conservatives win at the next General Election they look set to do the same. Older people already face a higher risk of poverty compared to the general population, with women and the very elderly particularly unfavourably affected. It’s estimated that 2.5m pensioners in the UK are living below the poverty line and this failure to stabilise and increase the state pension to a liveable level will see many more struggling to make ends meet over the coming years. Financial assistance packages Many Governments across the EU are requiring recovery assistance to help stabilise their economies. Hungary, Latvia and Romania have requested help from the European Community (EC), and the International Monetary Fund (IMF) has approved Stand-By Arrangements for those Member States. In the near future other non-eurozone Member States might be forced to request similar assistance. However, the rules attached to the financial assistance between the EC and Hungary, Latvia and Romania demand that they reduce pensions and benefits, abolish subsidy schemes and increase the retirement age. Given that the financial crisis is having a greater adverse impact on the most vulnerable, such demands appear to be entirely at odds with a number of the EU’s objectives, not least its aim to achieve a decisive and measurable reduction in poverty and social exclusion by 2010. Need for social protection Across the EU, old age pensions and sickness and healthcare benefits represent the bulk of social protection expenditure in all Member States, so when assessing the preventive role of social protection it is necessary to look at the resilience of pension systems and access of citizens to healthcare. On average in the EU, social transfers other than pensions, such as unemployment, family and housing benefits, reduce the risk of poverty by 36 per cent. In the absence of all social transfers, 25% of EU citizens would be at risk of poverty while this percentage is reduced to 16% after receipt of government support, with some Member States providing more effective support than others in this respect. Increased demand for social services Children are at greater risk of poverty too, with the main factors affecting child poverty being the labour market situation of their parents and the effectiveness of Government support, both through income support and the provision of enabling services such as childcare. Indeed, access to high quality social services was identified as a key issue in the “Recommendation on the active inclusion of those furthest from the labour market”, which was recently agreed by Council. Stable, decent housing is also crucial in the fight against social exclusion and demand for social housing is likely to increase during the downturn. It is known that domestic violence also tends to rise under economic pressure, putting additional strain on social services. We also need to be aware that growing unemployment is likely to affect individuals already facing discrimination in the labour market, such as people with disabilities, and in the UK cases of unfair dismissal concerning pregnant women are rising. What can the EU do? With all these additional pressures, if we fail to invest now in social services, at a time when the most vulnerable are at risk, then we risk rolling back the progress made so far to reduce poverty and improve equality and social cohesion. So what can the EU do? Insist on social conditionality Firstly, it must insist on social conditionality for support packages rather than forcing Member States to reduce their social assistance in exchange for financial help. With 2010 being the European Year of Anti-Poverty the focus should be on measures to reduce inequality and support the most vulnerable, as well as kick-start the economies of th worst affected Member States. Use Social Cohesion Funds The EU should also use the Social Cohesion Fund to improve the social dimension of Member States’ economies. The fund can finance up to 85 per cent of expenditure on major projects involving the environment and transport infrastructure and was set up to help reduce economic and social disparities and to stabilise economies. Those eligible for assistance are the least prosperous Member States, whose gross national product (GNP) per capita is below 90% of the EU-average. Since 2004 those eligible have included Greece, Portugal, Spain, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Protect services from market encroachment The EU must also revisit the idea of protecting some services from market encroachment, as in the Directive on Services of General Interest. As Governments are having to budget for services with severely depleted public funds it will be tempting for the Government to look to the private sector to fill shortfalls in service provision, but this could set in motion unintended consequences. In the UK, Public Private Partnerships (PPP) are a range of initiatives which involve the private sector in the operation of public services and the Private Finance Initiative (PFI) is the one most frequently used. The key difference between PFI and conventional ways of providing public services is that the public does not own the asset involved, instead the authority makes an annual payment to the private company who provides the necessary building and associated services. According to UNISON, evidence and experience within the health care service shows that once services are run for private profit, the quality of care is reduced and the public service ethos is replace by a motivation to make profit. Some PFI and PPP contracts have also been so badly formulated that public bodies and taxpayers have ended up paying private sector contractors far more than the going rate for outsourcing the work. Avoid restricting benefits Finally the EU and Member States should avoid restricting benefits under the banner of increased ‘targetting’. Experience has shown that means-tested benefits are often left unclaimed leaving those most in need without the support to which they are entitled. Extreme caution should also be exercised when it comes to the ‘penalty’ approach of restricting benefits, for example reducing benefits to those who fail to find work. This approach is questionable at the best of times, but in a recession makes no sense at all. The key message for the EU and the Commission is that reducing social protection must be absolutely a last resort during this economic crisis since any roll back on social progress could take many years, if not decades, to correct. Investment in social services is good for individuals and for society and to fail to develop and improve them, especially in a recession, is to fail citizens. Any reduction in social provision would also constitute a retreat from the EU’s ambitions towards achieving equality, opportunity and a decent quality of life for all. (Photo: Jean Lambert/London Green Party)